Is Printing, Selling Physical CDs Still Worth It?

While there is a lot of nostalgia surrounding the CDs and CD buying culture, the manufacturing costs and associated complexities of creating them leave a lot of more contemporary artists wondering if, in the digital age, CDs are really worth it at all.

_______________________________

Guest post by Brad Pack of Soundfly's Flypaper

When was the last time you bought a CD?

Many of us have fond memories of growing up with CDs. I can remember rushing to the local record shop after school (or cutting class altogether) to pick up the latest CD from my favorite artists. But the last time I bought a CD at a retail store, Beyoncé and Justin Timberlake were just starting their highly anticipated careers as solo artists.

On-demand streaming services have changed the way we consume music. With such easy access to music, there’s no longer a need to buy physical media in order to listen to your favorite artists. If you’re a musician trying to make a living (or even a dime) from your music, you may be wondering: Is it still worth it to sell physical CDs?

The short answer is: it depends.

What type of music do you make?

The type of music you make has a big impact on how likely your fans are to buy CDs. According to Nielsen’s 2017 year-end music report, CDs still make up 51% of total album sales. For some genres — like holiday music, jazz, classical music, Christian/gospel music, and children’s songs, CDs are actually the best-selling format. When it comes to rock and country, CD sales fall just shy of streaming in terms of consumption, while genres like pop, hip-hop, and EDM have far fewer CD sales.

Here’s a breakdown of popular music consumption rates in 2017:

• Rock: 33% physical albums, 40% streaming
• Country: 31% physical albums, 39% streaming
• Pop: 15% physical albums, 55% streaming
• R&B/hip-hop: 11% physical albums, 69% streaming
• Electronic/dance: 7% physical albums, 69% streaming

It’s important to note that even with more streaming-focused genres, people are still buying CDs. Instead of mass producing CDs for as cheap as possible, create limited collector’s edition discs and charge more for them.

When were your fans born?

Depending on how old your fans are, they may be nostalgic for CDs — or, they may have no clue how CDs even work. According to a study from 2017, almost half of Generation Z listens to music on Spotify and YouTube. However, Baby Boomers are still regularly buying CDs.

Ari Herstand (instructor for Soundfly’s free How to Get All the Royalties You Never Knew Existed course) suggests that until Boomers are as comfortable with streaming as they are with CDs, it’s still worth it to print physical discs:

“My parents can barely find the App store on their iPhone, let alone figure out how to get music on there and then hook it up to their car’s stereo which doesn’t have an aux (or USB) input… Yes, until the 45+ crowd is as proficient at playing music from Spotify or iTunes as they are at popping CDs into the player, [CDs] are still important.”

Where are you going to sell your CDs?

According to Nielsen, nearly 103 million CDs were sold in 2017. That may not seem like much in compared to 2000 when CD sales peaked at 943 million — but there’s clearly still a place for CDs in the current market.

But where?

Many major retailers are no longer stocking CDs. Earlier this year, Target announcedthat they will be switching to a scan-based payment system, meaning they only pay distributors for records that are actually sold. With the traditional model, companies pay for CDs up front and return unsold units for credit. In July, Best Buy began phasing CDs out of their stores entirely.

Major labels may be struggling to sell units to retailers, but CDs are still performing well online. In 2017, Bandcamp reported an 18% increase in CD sales.

How long have you been performing?

CDs perform better for newer artists than established acts — especially when sold at the merch booth. During AIM’s 2017 Indie-Con conference in London, Achal Dhillon from Killing Moon had the following to say about selling CDs at your merch booth:

“CDs, vinyl, all that goes into merch, and most of the revenues that we see come from merch… When they’re first going out [on tour], we’ll probably find that the highest-quality ‘item’ that emerging artists will have is their music.

“For us, it’s proven to be quite a big revenue stream in terms of live [performances] and in terms of selling the music itself directly over the counter. At a live show, you’re finding yourself in a room full of people who want to get to know you, or who do know you, so they are more likely straight afterward to spend money on you.”

What’s your budget?

Of course, at the end of the day, the biggest determining factor in whether or not to print CDs is your budget. Until recently, pressing physical CDs was expensive, complicated, and time-costly. Many disc manufacturers have started catering to independent musicians, making it easy and affordable — and much, much quicker — to order small batches of CDs.

According to a recent interview, Dan Baker, marketing director for Disc Makers, says that his average order size has dropped from 1,000 CDs to 300 over the last decade.

Vinyl is selling very well right now — much better than CDs. However, pressing vinyl is still expensive and time-consuming. On average, a bulk order of 1,000 CDs costs ~$1,000, while an order of 200 vinyl LPs costs ~$1,800. Some artists believe that download cards are an adequate substitute for CDs, but according to the RIAA, CDs began outselling digital downloads in 2017.

The only constant thing is change.

As CD sales steadily decline, artists are finding more creative ways to sell them. In 2017, Kenny Chesney included a copy of his new album with every pair of concert tickets sold. The album, Live in No Shoes Nation, became the first live album to top the Billboard 200 in seven years — not to mention the best-selling live album since Paul McCartney’s Back in the U.S.: Live 2002.

According to Kevin Leflar with Official Community:

“Artists [should] bundle one album with every pair of tickets because trying to deliver an album for every single ticket sold can be cost-prohibitive and a logistical nightmare. About 20 percent to 30 percent of fans tend to redeem their album offers, with most favoring CDs or vinyl over downloads, though nudges on email and social media can drive better results.”

In 2018, Taylor Swift allowed fans who pre-ordered her new album, Reputation, advance access to pre-sale tickets to the supporting tour. Of course, tickets to see Tay Tay were not guaranteed, but fans were able to increase their standing in line with every physical pre-order.

The music industry is notorious for changing right before our eyes. Over the years we’ve seen formats come and go and come back again. CDs won’t be around forever, but they aren’t going away anytime soon. Depending on your genre, your fans, and your budget, CDs can be a great source of revenue or a total waste of time. What do you think?