Published on September 27th, 2018 | by Alan Cross2
Here’s an analysis of the future of the CD
CD sales are down over 20% from this time year. Yes, it looks like a death spiral, but at some point, CDs will find a sales equilibrium. While its days as the dominant music format are numbered (if not already over), the compact disc won’t go away entirely. There are too many billions of discs and players out there. Instead, it will become a niche format in a world dominated by streaming–just like vinyl.
Billboard has this analysis.
The mid-year installment of the RIAA’s outlook on how the U.S. music industry is performing created quite a stir when it counted sales of compact discs in the first half of 2018 at 18.6 million, worth $245.9 million. That number, compared to the first six months of 2017, translates to a 46.9 percent drop on a unit basis and a 41.5 percent drop on a dollar basis, from 35 million units and $420 million.
Some publications, including Rolling Stone and a story in Billboard, noted that the CD decline was much larger than the decline in digital download albums, which, according to the RIAA, dropped 26.4 percent both on a unit basis (35.8 million last year to 26.3 million this year) and dollar amount ($360.4 million last year to $265.2 million this year).
The key word missing from the first sentence of this story, though, is shipments. The RIAA counts shipments, not sales — and that’s where the observation that the CD is declining faster than downloads falls short of being entirely accurate.
A look at actual sales from Nielsen Music tells a different story. Nielsen’s mid-year numbers show that for the week ending June 29, 2018, CD sales totaled 34.8 million, or nearly twice as many as what the RIAA says. Further, that number is down 19.7 percent year over year — not the 47.4 percent in shipments, as tracked by the RIAA — as sales in the previous year’s six month period totaled 43.4 million. Meanwhile, download albums are counted at 28.6 million, down from 36.3 million, a slightly larger 21.4 percent drop than the CD, with track sales down even further, according to Nielsen Music.
It’s clear the CD is definitely on its way to being a niche business like vinyl, which was tracked at 8.1 million units by the RIAA. But the CD market, despite its declines, is still four times larger than vinyl in the U.S. at this point.
Keep reading. If you follow the business side of music, this is fascinating stuff.