The Decline Use of the Music Compact Disk
Student Name
University
Marketing (Assignment-2)
Name, Professor
February 23, 2013

The Decline Use of the Music Compact Disk

The media known as a compact disk (CD) in particular music CDs are on the way out as did the VHS tapes and the VCR. The causes of music albums diminishing usage is a result of advancing technologies, World Wide Web, production and distribution efficiency. Music downloads on the Internet created easier access, potential to reach larger audiences and the explosion in the new age devices that supported Internet based products (i.e., IPods, MP3s, and Phones with music output capabilities). Where the Compact Disk (CD) first got its start. James Russell invented the compact disk in 1965. He was granted a total of 22 patents for various elements of his CD system. However, the CD did not become popular until it was mass manufactured by Philips in 1980. The CD has been available on the market since October 1982, and remained the standard physical medium for sale of commercial audio recordings until it was passed in 2011. The CD and its subsequent variants have been extremely successful and by 2007 worldwide sales had exceeded 200 billion units. LeCount, G. (March 9, 2009). Citing Websites. In History of the Compact Disk. Retrieved February 20, 2013, from http://www.discmakers.co.uk/history-of-the-compact-disc However, the numbers are dwindling of who buys CD albums anymore. It's all about downloads. Downloading the MP3 file seems to be much more practical nowadays, given that you can have all your favorite music with you everywhere you go. Carrying an iPod is far easier than carrying a portable CD player with a case for all your CDs. I do not believe that it is just CD's going through a popularity crisis. It's the whole concept of full-length albums. People would rather preview an album and download the few tracks that they like the most rather than buy the whole album only to skip half the tracks a week after they purchase it. That's why iTunes, despite its domination in the singles market, is not a huge force in the album's market. Back in 2011 digital music sales exceeded physical sales, according to a newly released Nielsen/Billboard report cited by CNN Money. In 2011, digital music sales climbed past physical sales to take a 50.3% market share of all music purchases. In a continuation of a multi-year trend, digital sales increased by 8.4% from 2010, while physical sales declined 5%. In the decade since Apple launched its iTunes music store, a host of digital music ventures have appeared, with varying degrees of success. iTunes remains the market leader but faces increasing competition from upstarts like Rdio, Spotify and Pandora, which went public. Gustin, S. (January 6, 2012) Citing Websites. In Digital Music Sales Finally Surpassed Physical Sales in 2011, Retrieved February 20, 2013, from http://business.time.com/2012/01/06/digital-music-sales-finally-surpassed-physical-sales-in-2011/#ixzz2LuzZCmyw
Evidence of physical album sales decline by the Nielsen/Billboard 2011 Music Industry Report: * There were 228 million physical album sales in 2011, a decline of 5% over 2010, significantly less than the 19.5% decline in 2010. * Digital track sales set a new record with 1.27 billion sales in 2011, an increase of 100 million sales (8.4%) over 2010. * For the first time, a digital song had more than 5 million downloads in a calendar year; Adele’s “Rolling In The Deep” sold 5.8 million downloads and LMFAO’s “Party Rock Anthem” sold 5.5 million. * Adele’s 21 finished the year as the biggest selling album with just more than 5.8 million sales. This is the first time since 2004 that an album sold more than 5 million copies in a year. Usher’s album Confessions sold 8 million copies in 2004. * Adele held top honors in many sales categories this year and became the first artist to claim the top spot for Best Selling Artist, Album and Digital Song in the same year. * Lady Gaga claimed the top spot as the most streamed artist in 2011 with more than 135 million streams. * Nicki Minaj’s “Super Bass” was the most streamed song and music video in 2011 with 84.9 million audio streams and 71 million video streams. * Digital album sales ended the year on a high note, with a record 3.5 million sales in the last week of 2011. (report cited by CNNMoney). The convenience of portability of the CD is declining appeal to consumers and methods of delivery are waning. In order to keep the CD album alive in today’s current market it is highly recommended to change Venues. The United States may not be the best market any longer with the majority of the population having some form of access to the Internet. The Internet and distribution mechanism for music is scarce in developing third world countries. Third world countries are still considerably behind in many areas, including IT infrastructure, but with the help from both governments and first world countries, access to the Internet is fast becoming a reality. Experts expect to see access increase drastically over the next several years as technology makes it possible to use the minimal infrastructure to provide access to more people, even in more remote areas. Shaw, A. (January 3, 2012). Citing Websites. In IT Infrastructure in the Third World, The Blog Herald, Retrieved February 20, 2013, from http://www.blogherald.com/2012/01/03/it-infrastructure-in-the-third-world/ When you think of a third world country, chances are you aren’t thinking of Internet access or lack thereof. You might be surprised to learn that many developing countries are working hard to provide Internet to their populations, often in surprising ways. The majority of these countries, particularly India and African countries are also receiving a helping hand from the West, with Americans and Canadians helping to develop the technology required to access the internet, even with a minimal infrastructure. While only about 20% of people living in third world countries use the internet (compared to 69% in the Western world), that figure varies greatly depending on the country. For instance, India’s population features just 8% Internet users, while China has a whopping 36% of the population online. Brazil is pushing 40%, all according to an economist named Charles Babbage, a Victorian mathematician and engineer. Babbage, C. (October 2, 2011) Citing Websites. In Internet in developing Counties Hailing the Google Bus, Retrieved February 20, 2013, from http://www.economist.com/node/21530612 The industry has revolutionized how music can be played, i.e. vehicles, portable listening devices, and media upgrades i.e., 8 tracks to cassette then to CD and CD is now going digital web based storage assisting in killing the CD. The IPods, MP3s, and most media devices or computers with proprietary software, and now even TVs can play digital music. My recommendation to save the CD is to change venues as a number one market for music CD albums. India sitting at a minute 8% in Internet usage appears prime to preserve a need for music CDs. The shortage of Internet coverage and slower technological advancements in India allows the music CD sustainability until the boom drops and India catches up. India is heavily influenced by ancient folk music and the new age sounds of Bollywood that saturate the modern websites on the Internet. Fortunately, cultural and traditional music is still valued and heard through local radio stations. The rural regions continue to use 70-80’s music technology to receive and send their music. India’s slower technological factors and ethnic musical market continues to have a purpose for the music CD.

Back-up recommendation to save the music CD in the United States would be a retro collectable approach. The customer needs to see a future bonus of their CD gaining collectable value, just like the older Record albums. TV and Internet have expanded the collectors market such as Pawn Stars or Pickers. The days of selling your antiques or junk in the front yard is over. Advertising a collectable market now and or implementing collectable items within the CD case might generate a spark to go out and purchase the album. Posters, concert coupons, and or autographed CD cases with the artist’s personal touch might be another method of making the physical CD items more desirable.

Therefore, it is only a matter of time and technology advancements before CDs are put in the history books like 8 track tapes. I don't think CDs will ever become retro like records in my lifetime. With that being said, it does not mean that 20 years from now items that were placed inside the cases could not become valuable. Secondly, it is not as common to download albums in comparison to singles. Maybe it's the artists' fault that they don't bother with cohesion and quality anymore and just put together a collection of catchy tracks hoping 3 of them are surefire hits. But the mentalities of the consumers have changed too. It's not cool to buy albums anymore. Nonetheless, changing the demographics to a country that has a greater use for such media product is a must. Sustaining a product need, marketing base, and demand will prolong the longevity of the Compact Disk.

References

LeCount, G. (March 9, 2009). Citing Websites. In History of the Compact Disk. Retrieved February 20, 2013, from http://www.discmakers.co.uk/history-of-the-compact-disc

Shaw, A. (January 3, 2012). Citing Websites. In IT Infrastructure in the Third World, The Blog Herald, Retrieved February 20, 2013, from http://www.blogherald.com/2012/01/03/it-infrastructure-in-the-third-world/

Babbage, C. (October 2, 2011) Citing Websites. In Internet in developing Counties Hailing the Google Bus, Retrieved February 20, 2013, from http://www.economist.com/node/21530612

Gustin, S. (January 6, 2012) Citing Websites. In Digital Music Sales Finally Surpassed Physical Sales in 2011, Retrieved February 20, 2013, from http://business.time.com/2012/01/06/digital-music-sales-finally-surpassed-physical-sales-in-2011/#ixzz2LuzZCmyw

http://www.dailymail.co.uk/news/article-2197248/Bruce-Willis-fights-leave-iPod-tunes-family-Actor-considering-legal-action-Apple-battle-owns-songs-downloaded-iTunes.html

http://www.tradingeconomics.com/India/2012/1013