I bought a CD today, and I liked it (with apologies to Katy Perry)
Wednesday, January 28th, 2009
By Russ Crupnick, Vice President, Senior Industry Analyst
I bought a CD today. In fact I bought two. Admittedly, fewer Americans buy CDs — and sales are almost half what they were in 2000. My teenagers don’t buy them anymore, because they’re voracious consumers of digital gift cards.
It was an impulse purchase. I stopped at Borders for a book and wandered into the CD selection. Then I recalled hearing something on XM, and decided to look for a particular artist. And there it was: A greatest hits compilation with every song I’d possibly want, so I picked it up. While I was on the way out, I peeked into a bargain bin and saw another classic album, so I got that one, too.
The entire register ring was $24 plus tax. That’s more than the average iTunes customer spends in six months. It’s difficult to buy a CD these days. Many brick-and-mortar music stores have closed, and entertainment chains are shrinking. Other retailers have sharply downsized the category, making it hard to find anything but the few top sellers. Racks aren’t well organized and signage suffers. Some customers buy online, but many more simply have stopped trying.
You can blame digital downloads, but three times as many people buy CDs as buy digital songs. Or blame piracy, yet most of us have never illegally downloaded a song. Do CDs cost too much? I’ll listen to this music for years, in my car, on my PC, and iPod. To me these CDs were a terrific value.
Perhaps everyone overreacted when CD sales dipped a bit a few years ago. Maybe the format wasn’t dead but just needed a shot in the arm.
Instead, it got shot in the head.
Besides the sliding economy, the number one reason consumers don’t buy CDs is satisfaction with the collection they already have. It isn’t pricing, or piracy, or MySpace, or time spent with Wii. It’s apathy. Borders had a good music selection, sensible signage, fair prices, and the store was well lit. They obviously wanted me to shop.
As new technologies for entertainment content emerge, and as new distribution options take hold, it is critically important that the transitions are sensible. There’s no excuse for letting apathy set in, especially for entertainment categories. The marketer’s job is to crack through that complacency, and get consumers to keep listening, watching, discovering, or playing.
It starts with the distributors and ends at retail. It involves drawing shoppers to the section through merchandising that carries an impact. You must be committed to knowing your shoppers, offering them a compelling selection, making products easy to find, and creating news value and excitement. This isn’t a story about CDs. It is about managing change, rather than letting change manage you.
Tags: CDs, digital downloads, music
Entertainment | Russ Crupnick, Vice President, Senior Industry Analyst | 
January 28, 2009 11:00 am
3 Comments
Other Links to this Post
RSS feed for comments on this post. TrackBack URI
Subscribe
By Robert, January 28, 2009 @ 2:20 pm
It’s very dissapointing seeing the medium suffer when many still truly feel its well worth the value. Like you said about ’satisfaction with their collection’ apathy has set in for many, but I hope it spurs marketers to try new things with book art, exclusive collections, or in-store promotions.
Only a few years back the local Virgin Megastore had in-store signings and performances on what seemed a weekly basis. I haven’t heard about too many of those in a long while.
By Henry, January 28, 2009 @ 2:40 pm
I buy lots of music every year. I prefer CDs over downloads if I want most of the songs. iTunes is great if you just want one or two of the songs. I can even abide by the new iTunes pricing structure and will pay a little more for the best songs. I do buy most of my CDs on the internet rather than in bricks & mortar.
I think the biggest issue is that most of the new releases are mediocre at best. There are still CDs that sell well just not enough to keep overall sales from declining.
By Craig, January 28, 2009 @ 4:05 pm
Russ - oddly enough I was at Best Buy looking for a small cd-player for our nursey. At the same time I was on the phone with a friend debating about CD sales and how even CD’s were going the way of the dodo bird. I could find plenty of Ipod docks, but no cd-players. Then we hung up and my blackberry chimed that I had received a new email. That email was about this story. Very strange. Also very true.