Report Claims Major Labels To Phase Out CD, Abandon Retail By End Of 2012
Major labels plan to phase out most physical CD's by the end of 2012 according to Side Line Music Magazine citing multiple unnamed industry sources. Only premium CD's would be manufactured according to the report; with most of those sales online rather than at brick and morter stores.
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The demise of the CD would be catastrophic for what remains of music retail and severely hurt sales in some genres slow to adopt digital, like country. Which is why I an not buying this story. Physical CD sales may be shrinking, but until they disappear, the major labels are in no position to eliminate any source of revenue.
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Can I be the first on this thread to call bullshit? There’s no way that all four majors would agree to this arrangement, and if they did, it certainly wouldn’t happen within the next 12 months. The report from Side-Line.com (whoever that is) contains no facts, no direct quotes, and very little sound logic. You want some reliable predictions for 2012? Here goes: music sales will flatten out (remember the 1% increase earlier this year? look for more news like that), WMG + EMI will merge, and CDs will continue to exist.
I think it’s BS, too. What happens to all of the millions of people in the US and around the world who don’t have a computer or broadband? Are they supposed to go without?
To clarify, I agree with you that this is highly unlikely as both the headline and the post imply. But TechCrunh EU and other sites have posted it and I wanted Hypebot readers to no about the story as well as the fact that I don’t believe it.
I dont believe this is true. The major labels are PREPARING for a business without cd’s in the next 12 months but will not stop manufacturing them until retail stops selling them. Physical is still 40-50% of companies profits and with proper inventory management control its a money in business. You are paid on everything you ship, as long as you don’t over ship its an easy way to make money and discontinuing manufacturing doesn’t make any sense, especially when you’re only paying by the product.
According to Nielsen Soundscan via NARM Overall Albums in 2009 was 195,000,000 units sold of that 130,000,000 where CD’s, 63,000,000 Digital Albums and 2,400,000 other Albums.
Now, also consider that we have had 20 straight weeks of increased store sales and are positive as an industry for the first time since 2004. Other then the End of the World we’ll sell more CD in 2010 then we did in 09 and once the Indies get back to releasing physical those numbers could expand even more.
There is no basis in reality for this posts. IMHO…..
FYI Narm just added Blu-ray audio to our the UPC codes which signals to me that physical is still developing/ evolving as a format and is a long way from dead.
And this is why I don’t read TechCrunch or related sites. It’s fluffy, link bait nonsense for the most part. Keep it real, hypebot! 🙂
Just to play devil’s advocate to propose a plausible scenario: Revenues do not equal profits or positive cash flow.
It is likely that as fewer artists are being promoted by labels, shipping incomplete truckloads of CDs has become a drain on cash due to increased shipping costs per unit combined with terrible working capital issues that they have to deal with for physical products, such as: A) paying upfront to print the CDs, B) inaccurately forecasting demand and being forced to swallow inventory, and C) unfavorable terms with the retailers that delay their revenues.
I’m not saying that this is what is happening, but without further details, this is certainly a conceivable scenario. Just wanted to throw the theory out there for discussion.
i find this hard to believe because of the simple fact that CDs still outsell downloads.
Let’s look at it this way… Netflix has been pushing toward a DVD less option for the past year now and will continue to do so. I did read an interview with an exec of a major label in the book Perfect Sound Forever (great read) that stated that the majors would stop selling CDs only when they no longer were profitable for them.
It could be that the labels are thinking of drastically downsizing their production which could be conceivable. I saw someone purchase a DVD today which absolutely astounded me. The sale of CDs/DVDs is definitely becoming a niche/specialty market. This is the reality the labels are anticipating and adjusting to.
Free album download at http://www.facebook.com/chancius
Internet journalism is really getting more strange. Each site will say anything to stir up shit.
Feels desperate way of posting news.
Credibility is everything, Hypebot.
Ok, the sheep will follow they always do, they might complain a little bit but being sheep they will comply !
Please. But did someone really say: “You are paid on everything you ship, as long as you don’t over ship …”?
Let’s not forget that many people still purchase DVDs and Blu rays. They are still a multi billion dollar a year business. I’m not sure which corner of the galaxy you shop but I see someone buy a DVD every time I’m at a best buy,mtarget, Kmart. Or wal mart.
A large reason for this is simply availability more so than piracy. A few big box retailers like Wal Mart are about the only place to buy cds anymore and they offer very little selection, unlike the days of Tower Records and the such. When MTV quit playing music, the 4 music giants would have been wise to start their own cable video station, radio stations and record stores to both push and promote and retail their products. On top of retail sales, they would also generate profits from advertising.
I agree with the fact that Physical CD sales may be shrinking but until they disappear the major labels are in no position to eliminate any source of revenue…
Well the report from Side-Line.com contains no facts, no direct quotes, and very little sound logic..It has good content..