August 4, 2008

Just a few days ago I posted a Coolfer report on the state of the compact disc. It provides valuable insights and forecasts for anybody -- label, distributor, investor, retailer -- with a vested interest in the fortunes of the physical format. If you read the headlines, you'll think the CD is already dead. If you read the text of articles, dig into transcripts of conference calls and talk to people in the industry -- or save yourself the time and buy the Coolfer report -- you will find evidence that CD sales, while dropping, are not going to zero any time soon.

An argument I have repeated frequently, and did so again in the report, is the CD is still a viable format that has many years left in it. Today I ran across an article at Variety on country musician Kix Brooks and his thoughts about the changing industry. Here is what he said about the CD:

"Almost exactly a year ago, I was in some meetings where distributors were planning within five years, and not speculating, but planning to be out of the CD business," says Kix Brooks. "It felt like within five years we would be in a purely Internet download world and a lot of major companies were shifting their networks to prepare for that download world and getting into the download business. And now, in the last couple of months, I've started to hear some backpedaling on that.

"It may be CDs are a format that may last longer than first speculated. I'm not sure where that slowdown came from because it seemed like a year ago everybody was all prepared. It was full steam ahead, CDs were obsolete, and obviously the Sam Goodys and the ma-and-pa distributors of the world were going out of business right and left. But now for some reason you're hearing that Best Buy and Wal-Mart have said maybe there is some longevity to the CD format."

Brooks does not believe this ambivalence was restricted to country. "I think that was kind of across the board."

That "slowdown" Brooks referred to was a large drop in CD sales in 2007. During that period, retailers were going out of business, closing stores and reducing shelf space. Since then, the rate of change has slowed and, it appears, people are willing to reassess their doomsday predictions.

Link: Coolfer's "The State of the Compact Disc" Report

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Posted by Glenn at 11:43 AM |

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