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4 Reasons Why The CD-Release Complex Is Dead

Cd At the New Music Seminar conference in Los Angeles, founder Tom Silverman opened by revealing that CDs were still 74% of sales in 2010. “CDs aren't doing so bad,” he remarked. “People still like CDs.” In other words, the format is in decline, but it still makes up a substantial amount of sales revenue. It’s important to realize though that it’s the economic engine that’s built around CDs – not the CDs themselves – that’s dying.

The reality of the decline in sales of recorded music isn’t that CDs are going away and being replaced by digital music and apps. What’s happening is much bigger than that. The record industry built a huge economic engine around the idea of CDs, and now it’s going away. The CD-Release Complex is what’s dying.

And once it’s gone, it’s gone.

The digital music consumption system will never work the way that the CD-era one did. By design, it’s different. And because to this, we’re different now too.

Digital music and the cloud won’t accelerate the decline of CDs. Instead, they – along with other technological and societal forces – will destroy the economic engine that’s dependent on CDs. Sadly, the major labels won’t have time to build another one, because there isn’t another one. This is it. This is the CD-Release Complex in all its glory. The reasons why it’s dying are varied, but well known.

These are four that I’ve chosen to highlight, but there are more. These may not even be the main driving forces that are putting this economic engine to rest.

They are, however, the ones that interest me.

Here are the four reasons:

1) The Economic Engine Is Hemorrhaging. Commercial radio, big-box retail, live music, print, and TV are what make the record industry go round.

Each of these delivery mechanisms is essential to the health of the major labels.

Radio rotates the single. Retail places it on an end cap. The venues sell concert tickets. Print and TV build awareness. The efficiency of these mass-marketing tools is waning and many are in decline. People may still listen to commercial radio, but in the next decade, the car will become an all-out war. And the fact of the matter is that radio can’t do what Pandora and MOG do. The linchpin of the record industry is going to have to evolve or die. “It’s free. It works.” That selling point of radio won't last forever. To users, radio will become just another app.

Big-box retail outlets sell TVs, not music. If CDs stop being a good way to sell more TVs, CDs will be thrown out. Print media and music-focused publications especially are hemorrhaging from the mouth. No one knows when the end will come, but we’re all aware that it’s near. The concert business is also in decline.

Ticketmaster is having troubles selling seats. Legacy acts and pop stars, most from another era, dominate venues and once they’re gone, it's going to hurt a lot.

TV is being disrupted and only a few shows move the needle.

None of these outlets can be depended on. They grow less and less effective every year. The CD-Release Complex is what’s in decline. By focusing on CDs themselves, we fail to realize that the backbone of the record industry is being broken. Piece by piece, the idea built around CDs is going away, and for good.

2) My iPod Isn’t For Sale. Major labels can buy their way onto radio.

They can buy their way onto end caps. They can buy their way into venues. They can buy their way into print and TV. Every outlet has a price. My iPod doesn’t have a price. It cannot be bought. There’s no possible way to pay to put Lady Gaga’s single into my collection. And as my iPod becomes the primary way that I consume music everything else matters less. However, it’s not just the iPod.

It’s the rise of the personalized music experience in general. There’s absolutely no way to put music into rotation on any app that I’ve paid for. By chance, one song may find its way to me, but if that suggestion is not personal and relevant to my user profile, it will be banned. I, as a consumer, can no longer be hammered with music that I don't desire to hear. That means that music marketing is no longer just a matter of cutting through the noise, it’s a matter of climbing over the eighty-foot barrier that individuals have erected around themselves. It was hard enough to sell CDs when it took hundreds of thousands of dollars to hammer music into the skull of the masses. Try accomplishing that feat when I own the headphones and the iPod attached. Sorry, my playlist is not for sale at any cost.

3) Mass-Behavior Is Harder To Change. In the field of psychoanalysis, a “complex” is roughly defined as “a combination of emotions and impulses that have been rejected from awareness but still influence a person's behavior.”

The CD-Release Complex is formed by harnessing an audience’s nature as a collective, rather than focusing the behaviors of individuals. Executives learned that if they wanted to influence the behavior of an individual they had to do so by attempting to alter the mass-behavior of the collective. Only then could they influence a person’s behavior through a combination of emotions and impulses that had been rejected from awareness of the individual. This phenomenon of behavior lies at the core of human nature, which is that, as Mark Earls argues in his book Herd, “we are a ‘we-species’ who do individually what we do largely because of each other.” You see, the CD-Release Complex is both an economic engine and an underpinning of human nature. The fact is that mass-behavior has always been difficult to change. But it’s getting even harder for major labels to influence the buying habits of individuals through targeting the collective masses.

People are becoming increasingly individualized in their tastes and interests. This means that simultaneously our copying mechanism is picking up on more trends and the more prevalent this becomes, the more difficult it is for the “Buy This New Artist” meme to replicate and spread. The CD-Release Complex is why hundreds of Metallica fans will stand out in the rain – outside of a record store – waiting to buy the Black album. Not all of those fans are there because they like Metallica, it’s because they think they should like Metallica. The flipside of the CD-Release Complex is also eroding. Both the engine and the complex drive sales and once they die, there won’t be another. That doesn’t mean that fans won’t still do things that other fans do. It just means marketing dollars will fail to ignite it more often.

4) Fans Don’t Trust Major Labels. The CD-Release Complex is built around the idea that fans discover music through the same media that major labels use to promote new music. Fans used to buy albums based on trust, a sacred bond.

They trusted that said release by said artist would be good and bought it. Now, they do a search on their iPhone and decide if it’s worth the money, i.e. risk.

Many album reviews on Amazon have a song-by-song overview of the ones that are worth buying and those that aren’t. Thus, fans cherry-pick and leave the rest.

So too, fans used to rely on specific media to discover new music and did so, because it was beneficial. They paid attention. The major labels rewarded them with music. Everybody won. This is no longer the case. There aren’t specific delivery mechanisms through which fans discover music. There are thousands.

The symbiotic relationship between consumer demand and major label mass marketing can no longer be relied upon to churn out seemingly endless profits.

This process of interrupting people with music – that they don’t want to hear – to get more distribution, to sell more albums, which makes labels enough profits to interrupt that same person again, is over. It doesn’t work that way on the web.

Major labels have lost the trust of fans and they can’t buy it back. This is the death of the CD-Release Complex, not the decline of CDs as a music format.

So yeah, the CD isn't doing so bad. But everything else around it is dying.

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15 Comments

  1. That’s not completely true. Many serious music fans learn to love and trust certain labels for the consistant quality of their albums. This is especially true of small, niche labels. Other fans avoid big labels these days. Generally, only serious fans care.

  2. Look, "Fans Don't Trust Major Labels" flowed better than "The Symbiotic Relationship Has Ended." It digests better while still highlighting some important points. I'm not trying to part the clouds and divine fans don't trust labels. People know that already. The main idea is that fans don’t trust the system in general.

  3. To call that article useless is not very constructive. It was a well written article hardly derived from assumption alone. I like these three telling insights:
    1) “fans cherry-pick and leave the rest.”
    2) “People are becoming increasingly individualized in their tastes and interests”
    3) “as my iPod becomes the primary way that I consume music everything else matters less”
    All state a similar point, but have huge implications for how to successfully market in today’s music industry.
    Thanks Kyle

  4. Thank you for the kind words and for pointing out the parts that you liked. It's never easy to tell which parts of a piece grab people.  Sentences look different when they're isolated from the main piece. Your welcome. It's kind of funny how someone will always try to discredit something you spent 6 hours writing in a 1 minute sentence. Oh well.

  5. CD’s aren’t dying. I hate the way this portrayed. CD sales have gone down for the legitimate reason that when new ways of delivering music exist, the % of physical CD’s goes down to make room for other options. The decline is simply the result of more options being presented.
    If sales are dropping it’s probably rational to say that it’s due to an abnormal abundance of bands out there on the interweb. It’s too overwhelming and can’t all be recognized.

  6. your story is factually incorrect: Tom Silverman did not say that CDS were 74% of sales. Wrong – he said 74% of ALBUM sales are still physical

  7. Are we talking about CD sales in the US or Globally ?
    If in the US this maybe true, but for the world hell no. There are many people in the Americas (outside of the US and Canada), Africa, Asia and the Pacific region who buy music on CD due to many reasons
    1 Internet availability
    2 No where to download from at all
    3 No place that supports your language (legal or illegal)
    3 No way to pay for online purchases.
    4 Don’t have computer

  8. In classical music, sitting listen to a long piece with the liner notes – or the score! – is still more enjoyable and easier – with a hard copy. Itunes has not worked out how to present classical music in a convincing form – tracks are still called songs, and there is no understanding AT ALL of genres. Zune doesn’t even have a classical musical section in its marketplace, it is trashy – OK you download off of Amazon, but the whole experience of seeing where a piece was recorded, who ALL the performers were, dates,texts, all that stuff, has to be tracked down on a website somewhere. I don’t believe that people wanting whole operas, or box sets of symphonies are going to prefer downloading to the experience of the hard copy. If you take something like the Hyperion set of complete Schubert, the Graham Johnson sleeve notes were an experience in themselves. Classical music cannot be marketed and packaged like pop music, will someone at Apple PLEASE explain that to them????

  9. Cd sales have gone down, but its not entirely the fault of new media. I think alot of the song quality these days is not as good as the old days, hence, the songs arn’t as catchy and lots of the songs lack sole. I think Cds will be around for another 10 years at least. I hope. I like covers and having the real product.

  10. I can’t say I really agree with your “My iPod isn’t for Sale.”
    I could have said the same thing about my walk-man or my CD player. The truth is, around the same time as radio conglomerates began to form, so did the internet era and Napster. It’s more of one form of discovery is being replaced with another.
    So, while your other points are interesting, maybe a little debatable, this one is definitely the one I cannot agree with at all. Take NPR, for example. The majority of new artists being found are on NPR. The data of sold copies of music after being featured on NPR is outstanding. Not to mention outlets like Bandcamp, Pandora, Last FM, and such which let you stream songs (or entire albums, like Bandcamp), are major contributors to finding new music.
    I would say that the CD just doesn’t support the niche market that the music industry is becoming (or already has become).
    In fact, I’d even say that the CD isn’t necessarily dying. I wouldn’t be surprised if CD says twenty years from now skyrocket like that of Vinyl.
    Instead, I’d say that major-once-discovery-tools are dying and companies too large for their own good will fall. It’s like the music industry’s own banking crisis.

  11. Mr. Bylin,
    I enjoyed reading your blog, and believe it brings up a strong assertion that many are missing in their claims that the CD is or is not dead – rather that the entire model has crumbled. In your introduction to the post, you bring up the point that “The digital music consumption system will never work the way that the CD-era one did. By design, it’s different. And because to this, we’re different now too.” I believe that this is the point you are trying to drive home in this post, however I wish that the four points explored went a bit deeper and related back to this main idea more directly.
    I do understand your purpose in discussing your first point about economic hemorrhaging, saying in general people are missing an understanding of how the system once worked and how it is now defunct. However I am more interested in how this hemorrhaging is affecting the idea of an album as a release. Do you believe that this decline of the economic system will also result in, if it has not already, a decline of desire to release an album by the artist? In your second point, you claim, “My iPod…cannot be bought”, but in exploring it further, discussing “the rise of the personalized music experience” I feel certain points are missing about the model that is in place and emerging today such as iTunes, Rhapsody, Grooveshark, Spotify as well as Google’s move towards a cloud music network. There are still ways, via advertising and daily or weekly ‘features’, such as in iTunes, that will generate a system through which people will find new music dictated by a larger and monetarily focused hand.
    In discussing the societal complex of consumers you factor in the move towards a more individual taste. However, this move has resulted in a standard of free, or illegally downloaded music over the past decade. How do we embrace a positive change, such as this creation of an individual experience ‘complex’, while creating a system in which artists can get paid? Today music is scene as a right, and in my opinion, as a musician myself, it is a privilege and those of us providing are being taken advantage of via this new complex. Ultimately this post is pertinent and important for everyone to understand. I believe that while the CD complex is dead, there will be a new model that will right itself and balance out the music industry–where both the fans and the artist are content and fair models to create profit will emerge.
    Sincerely,
    Danny Schnair

  12. Okay, so sue me I still like the “CD-Release Complex” as a music fan and consumer. I also think it is alive and well. Let’s take R.E.M which is releasing a new album next week. Here are the steps they have taken that combine old and new:
    1. They release a free song for which you need to give them an e-mail address to receive. Pitchfork, Stereogum and others have posts up about getting the song.
    2. They release a couple more songs which are featured in You Tube, and posted again by the likes of Stereogum among other sites.
    3. R.E.M. released another free song, this time on a different channel – Amazon.com. I’m rocking out to now TWO free songs in my iPod, plus hearing them played on SIRIUS on multiple stations.
    4. I received an e-mail a few days ago (which R.E.M. obtained from step #1), and it is chock full of information and links. One is to a YouTube interview of the band talking about the album, and playing snippets of the songs. I immediately subscribe to their channel, so I’ll be able to see whatever comes out next. They also provide links to rave reviews of the album from Rolling Stone and Spin, and urge fans to check out Michael Stipe who will appear on David Letterman.
    5. Also in the e-mail is an announcement that the album will stream at NPR in the States and Spotify in Europe. Additionally, there will be a “listening party” at NPR, where everyone listens to it for the first time, and can comment on what they hear. Meanwhile, NPR will feature the album as a “First Listen” for the whole week in the run up to the release. Rollingstone.com is also hosting the album.
    6. Yet to come is the album will be released to all the usual outlets I am sure (Target, Walmart, Barnes & Noble, iTunes, et al), for which we the fans are well prepared, having heard three songs in full in the months leading up to D-Day, and having heard the entire album for a week on NPR/Spotify. It actually is more fun to buy an album for which you already know a handful of songs, and even got to preview it in full before purchasing.
    I think it’s a win for R.E.M. (and from the three songs I have heard, it will be a good album) showing that the Old Way combined with the New Digital Tools still has the power to get people excited and willing to buy an album (CD or download). The question is if it is an Amazon Daily Deal. If it is, then it will have been a brilliant marketing campaign, even if the band is long established.
    P.S. — I already pre-ordered the album in CD format. So they already bagged one sale even before the preview album.

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