Could this Christmas really be the swansong of the CD? Analyst Gartner certainly hopes so, having issued a challenge to the music industry to move to a ‘digital first’ strategy by the end of next year, in order to stop being held back by its reliance on CD revenues. Or, as Gartner’s research VP Mike McGuire puts it:”By propping up the CD business, rather than fully investing in online distribution alternatives, the major labels and the larger music industry have neither succeeded in stamping out piracy nor done much to recreate the business models of the old ‘record business,’. Music labels should instead emphasize ‘digital first,’ making all new releases and catalog issues via digital services and moving CDs to an on-demand publishing mode.”Gartner backs up its claim by saying that physical music revenues went from 91% of overall sales in 2005 to 77% in 2007, while pointing out that by 2012, 77% of US households are expected to have broadband internet. The analyst appears to be suggesting that the remaining 23% will either get their CD’s burned on-demand, or will buy their music through Wi-Fi laptops and 3G mobile phones.Here’s McGuire again: “The industry’s comfort with past marketing and promotional practices centered on CD launches is ingrained and difficult to give up. But the reality is that digital natives and immigrants are more interested in convenience and choice. This is not to say that the physical CD would disappear altogether. Rather, it could shift to being a promotional tool to be sold or given away at concerts for example.”Tsk, shouldn’t that be on USB sticks?Anyway, Gartner has a report out – Christmas 2008: The Last Year of the Retail CD – which has more details on its suggestions.

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