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Top 5 Reasons Why The CD Market Collapsed

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Over the last few years the sale of CDs has declined quite markedly.

Top 5 Reasons Why The CD Market CollapsedIt is difficult to determine the precise reasons behind this decline because you cannot prove empirically why someone didn’t do something. That being said, there are a number of reasons that may or may not be related to this decline.

1. Illegal Downloads

It is impossible to prove the link between illegal downloads and a decline in the CD market; however, many in the industry have cited this as a reason for the decline.

There is a certain logic to the argument: Why buy CDs when you can get music for free? However, it is a slightly far-fetched argument to suggest that if all the people who download illegally were prevented from accessing illegal music, then there would be an increase in CD sales equivalent to the number of illegal downloads. Many people will take what they can get for free, but will never pay for it.

The argument often put forward in favor of free downloads (which may be illegal) is that by having free access to a wide range of music, many people have come across artists who they may not have found in the normal course. This has led to an increase in interest in those artists and indeed an increase in revenue when people have then gone on to purchase these newfound artists’ CDs or gone to see their gigs.

2. Pirate CDs

Unquestionably, pirate CDs (that is, CDs manufactured illegally and sold without royalties being paid to any of the copyright owners) have affected the CD market.

It is not an unreasonable assumption that if people are prepared to pay money for a pirate CD, they would be prepared to pay money for a legal CD. What cannot be proven is whether the income that flows to the pirates would flow to the music industry if the pirates could be put out of business. For instance, there may be reasons why people buy pirate CDs. One reason could be price—people may be happy to buy cheaper pirate CDs, but would not pay full price for legal CDs.

3. Bad Music

I’ve never seen anyone in the music industry put forward this argument, but I will. Bad music—that includes uninteresting artists performing turgid, formulaic songs—leads to a decline in music sales. Second-rate acts and songs lead to second-rate CD sales.

4. Better Things to Buy

There was a time when the range of goods on which people could spend their disposable income was much narrower than it is today. For instance, 30 years ago there were no video games in the form we understand the product today.

When music had little competition for disposable income, it was easier to generate income from recordings. In today’s climate, particularly with many other consumer products being very heavily marketed, the CD is having a hard time. To keep up with the competition, marketing budgets have ballooned.

5. Reduced Number of CD Outlets

CDs are available in a much wider range of stores—for instance, you can now buy CDs in supermarkets and bookstores. Although this may seem good, it does lead to unintended consequences.

First, these non-music retailers tend to carry a much narrower range of music. Usually they will carry highly commercial chart music and golden oldies. Sometimes these stores will sell CDs below cost price, knowing that cheap CDs are the sort of product that will draw consumers into their stores. The retailers hope that once inside, the consumers will then also purchase some of their products with a higher profit margin.

As a corollary to this, the established record stores are on the decline. Their prices are under attack from the supermarkets and online retailers such as Ebay. The profits they used to make from chart music and golden oldies—which could be used to finance the carrying of less profitable music ranges—are no longer there. As a result, the size of stores is shrinking, and some retailers (such as Tower Records) are going out of business.

Nowadays,  if you want to overcome all these problems, you might think about promoting your music online, in order to increase your digital album sales quickly!

Hi, my name is Erick Ycaza. I have a BA in Advertising & Graphic Design. This blog is to provide you with daily music news and share my personal style.

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