CD Faces Death by Download
By Jeff Miers
December 2, 2011
Perhaps you've noticed, while perusing Facebook, that the scroll on the upper right-hand portion of your home page -- the rolling info-bar that tells who among your friend-base is available for a little chat, or reminds you of upcoming events you may or may not be attending -- is adding messages like "So and So is currently listening to Sigur Ros (or Bjork or Beyonce or whatever) on Spotify."
This might seem like an info-nugget that should be filed in the "Too Much Information" bin, but it's telling, nonetheless. Spotify -- the predominant of the many "streaming" online services where the curious can listen to music for very little money -- is immensely popular. One can find almost anything on it, and can listen to it as often as desired for a monthly fee of $9.99. That's for the "premium membership" -- you can sign up and download the basic version of Spotify for free.
There's that evil little word, the one that has helped devalue the music industry, the book industry, and certainly the newspaper industry since the Internet took over the world and declared, with chest thrust forward and fist raised, that "information wants to be gratis."
Once that Pandora's box has been opened, shutting it is not an option. You can't "uninvade" Iraq, and by the same token, and you can't expect most music consumers to start paying for music again once they've become accustomed to snatching it for nothing.
So long, CD?
It has been reported that major record labels are planning to kill off the music CD (born in the early 1980s) at some point in 2012. The labels, these reports suggest, will then concentrate on selling digital downloads almost exclusively -- the exception being vinyl, deluxe reissues and box sets, all of which still sell very well to "music enthusiasts."
Casual consumers will purchase individual singles via places such as iTunes and amazon.com. If they do want a whole album, it's probable that big hits of the Beyonce/Gaga/Jay Z variety still will be produced on CD and sold at chain retail stores and Starbucks.
Is this really due to lack of consumer demand for CDs? Or is it that what is left of the music industry likes the economics of moving everything into the wholly digital realm?
"No industry source has actually stepped forward to corroborate the claim," Anil Prasad told The Buffalo News. The renowned music journalist is also author of the book "Innerviews: Music Without Borders."
"The CD remains the industry's No. 1 source of revenue, far above digital revenue. As a result, the industry is unlikely to eliminate the CD for many, many years. I think the medium will see a long, stately decline over the next 10 years. The older demographic -- those between 35 and 50 -- still prefer the CD. ... The other element to consider here is that labels still own and operate physical media distribution. In general, they don't [own] digital [distribution], meaning they have to typically, unhappily partner with digital distributors and give them a massive cut. Their preference is to continue controlling the whole channel. As long as they can do that, they will continue holding onto the CD. There will be no forcing the end of the CD while consumers speak with their wallets."
Author and journalist Robert Levine, whose new book "Free Ride" (Doubleday Press) offers an incisive exegesis on the true cost of "freedom" in the digital realm, agrees with Prasad.
"That's a bunch of [expletive]," says Levine when queried concerning the impending death of the CD. "This is the first year that digital sales brought in funds that matched CD sales. Record labels are run as big corporate businesses; they aren't going to be sentimental, and they aren't going to be mean just for the sake of it, either. They will do whatever is going to be most profitable for themselves. And, even though sales of CDs have declined, the CD is still the format that makes the most sense."
Levine's response flies in the face of a report predicting the death of the CD in 2012 published on the music site Side-Line.com, and discussed in such places as Billboard.com and DigitalMusicNews.com. Much of the discussion has taken place on music-related blogs, though major daily newspapers have reported on the rumors -- which seem to be just that, unconfirmed rumors.
Based on the past 20 years of major record label behavior, however -- merger after merger, short-sighted attempts to squeeze money from consumers, a failure to meet the reality of the post-Napster world in a responsible manner -- it's not difficult to imagine the remaining majors (until recently, "the Big Four": Universal, Sony, EMI and Warner Music Group, but following the mid-November purchase of EMI by Universal, now "the Big Three") scrambling to rescue what's left of their business, like rats scurrying for the lifeboat as the mother ship sinks.
"I've personally never been much of a fan of major labels," says Brandon Delmont, head buyer for Buffalo's Record Theatre stores. "They are businesses, and they will do whatever they have to do to stay in business. If that means killing off the CD, then that's what they will do. I don't think that major labels are necessarily the driving force of the industry, and they're not always the trend setters.
"I like to think of pop music as an art form. Bands are still trying to make their own [version of the Brian Wilson magnum opus] 'Pet Sounds,' and making records that are a complete artistic vision, from the fonts used to the snare drum sound, and that means something physical. I can't remember the last time I picked up a major label CD and thought 'Wow this looks great.' I usually pick one up and think 'This looks like a major label CD.'
"So it makes sense that major labels would want to phase out something that doesn't seem to be working for them. They haven't put the 'art' or the 'work' into it. ... Perhaps if they put more quality into a physical CD, you wouldn't be asking me this question."
Spotify a bit spotty?
Free streaming services like Spotify and rDio -- sites that allow generous access to music that can be listened to indefinitely, though it can't be downloaded and burned to CDs -- would seem to be a natural outgrowth of the post-"free exchange of digital media" entertainment culture. The appeal to the general music consumer -- people who like to listen to music regularly, but are far from obsessed with it, and probably stopped paying for much in the way of new music years ago -- is obvious. This type of music consumer can listen to what he wants, when he wants, for free, most likely on a computer or smart phone. These people are less likely to care that the sound quality presented by this set-up is inferior -- something that the other type of music consumer, the devout "music-head" who regularly spends money on new and old music, will find intolerable.
(As frame of reference, a typical new release of a downloadable album on iTunes goes for between $9.99 and $12.99; most "physical" CD releases in stores are priced between $14 and $18, depending on the artist, the list price, and the store itself. Walmart, for example, employs CDs as a "loss leader," and is therefore able to sell them for much less than a standalone independent record store.)
So what effect have these streaming sites had on CD sales?
"These sites make an incredible library of music available to their users, and they make the music available anywhere, anytime, on virtually any mobile device," says Prasad.
"Further, they do this for less than the price of a single CD -- and in some cases, for free. It doesn't take a rocket scientist to understand that this dramatically discourages the traditional purchase of music. The bottom line is, streaming is a great thing for the streaming companies, their label partners and consumers, but it is horrifically unfair to the artists. Until this is corrected, listeners need to understand that they are fundamentally harming the artists they love by using these services."
Despite logical arguments like Prasad's, Spotify recently released a statement that read, in part, "Right now we have already convinced millions of consumers to pay for music again, to move away from downloading illegally and therefore generate real revenue for the music business." Is this plausible? Pure fantasy? Wishful thinking? A blatant lie?
"This is beyond laughable," according to Prasad. "Artists are barely getting paid through Spotify. Artists as major as Lady Gaga have mentioned how pathetic the situation is. She made $167 for one million plays. It's a complete rip-off. An artist's song would have to be streamed more than 4,053,110 times per month in order to earn the equivalent of minimum wage. With Spotify, a musician cannot earn a sustainable living. I would also like to underline that their statement says it's about generating revenue for the music business, not the artists themselves. Remember, Spotify is partly owned by the record labels. They're having a grand old time paying themselves. The artists? Forget about it."
Levine believes the wheel is still in spin: "The jury is still out. It's still too early to tell how this has affected CD sales in the U.S."
Free, at a cost
Is all of this the result of the notion that on the Internet, "information wants to be free," and how the music business (and the newspaper business) have embraced this notion, even while they attempt to fight it? In other words, has the industry -- which makes its money from content generated by others who expect to be paid for their efforts -- destroyed its own business model?
"No doubt a lack of long-range thinking and planning has decimated traditional media business models," opines Prasad. "But as far as a fight goes -- artists that are not signed to a major label have the choice to not take part in Spotify, and instead, forge their own paths, and many are doing exactly that. There are wonderful platforms like Bandcamp that are designed to ensure artists have total control and can set their own pricing. Artists not signed to major labels -- and I don't understand why any artists would ever consider working with these charlatans again -- can establish their own models, and are doing so in droves.
"Spotify is basically driven by back catalog and select superstar artists willing to play ball. Once enough artists opt out, I think you'll see the Spotifys of the world start to wither."
Interestingly, while Spotify asserts its position as the industry-wide buzz word of the day, more and more serious consumers are turning back the clock toward the predigital age, by favoring vinyl releases. They're not just scrounging the used bins for original vinyl from older artists, either -- in addition to the avalanche of remastered vinyl reissues, new artists like M83, Zombi, Fleet Foxes and Battles are dropping new product in the gatefold vinyl format, often with a code for a free digital download placed beneath the shrink-wrap.
"Music and technology are changing, and that is what's driving sales of CDs down," Record Theatre's Delmont says. "People now have several options for listening to music. CD, vinyl, satellite radio, traditional radio, iPods, Spotify, YouTube, live music, etc. So naturally, some former CD listeners are going to be drawn to those other formats, and you're going to lose some of them. With the help of organizations like 'Record Store Day,' we've been able to switch some of them to vinyl.
"Frankly, I'm constantly shocked with the growth of vinyl. Vinyl is more of that 'artistic statement' that you're just not going to get from my iPod or Spotify."
Quality vs. quantity
If it does transpire that the CD goes the way of the cassette tape, what price will be paid in terms of sound quality? How will that affect the future creation of "music as art?" If everything sounds thin, overcompressed and lacking in depth, will this encourage the further creation of thin and crappy-sounding music, since that will then become the sound people are accustomed to? We saw a similar development with the Auto-Tune debacle of the past decade -- originally employed as an in-studio effect to push strong relative pitch toward the perfect pitch ideal, the sound was abused by pop stars with dubious senses of pitch, and thereby became the status quo, even for singers who didn't need the help.
Could poor quality modes of digital dissemination, listened to largely on midline computer speakers or their equivalent, have a negative effect on the level of audio excellence in the music being produced?
"Thankfully, we are seeing the emergence of many so-called 'lossless' music downloading services emerge," says Prasad.
"These platforms provide sound quality that significantly surpasses the conventional CD. As long as you have enough hard drive space and decent speakers connected to your computer, you can enjoy unsurpassed sound quality via digital download services. Unquestionably, multiple generations are being raised that don't understand -- or care to understand -- that they're listening to appallingly bad audio reproduction. There will always be those that do care about this stuff though, and I'm confident their preferences will always be provided for." Those who do care represent a demographic group long ignored by the mainstream music industry, but ironically, that group has turned out to be the most loyal consumer base of all. Elaborate reissues, box sets, special advanced audio remixes, formats like Blu-ray, DVD Audio, 5.1 surround sound and 180 gram vinyl -- no one is talking about getting rid of these formats in the rush to go all-digital. The reason: they continue to be profitable.
Erin Ward, a Buffalo area musician, producer and audiophile, sees a direct connection between the preponderance of overly compressed digital recordings and the severe dipping in CD sales.
"[Porcupine Tree leader and renowned producer] Steven Wilson's recent, unbelievable 5.1 remixes of classic records by King Crimson and Jethro Tull have me convinced that music technology could be so much more advanced than it is," Ward said. "But we do not embrace it. We embrace convenience by downloading compressed MP3s, and therefore, there aren't enough Blu-ray discs available, for example, which are not as easy to download, but can hold the highest sample rate audio quality. Plus, you need a 5.1 surround set-up to play them. The difference in sound quality and instrument separation is unsurpassed! Like nothing I have heard in my life.
"Remember when listening to music meant you had to sit in front of a stereo and speakers? If we cared about sonic quality, there would be a reason to buy music again. And most importantly, it would inspire bands, allow them to make money again and to make more creative records. Otherwise, they just won't bother anymore. And then we'll be stuck with Justin Bieber."
Let that one roll around your brain-box for a hot minute.
Shooting itself in the foot?
Levine refers to the whole "rush to kill the CD" notion as a "paranoid fantasy," one likely pushed along by technology companies that would greatly profit from an all-digital music industry.
"Industry-wide solutions generally don't make sense," he says. "These things tend to need to be more case-specific. It's never a good idea to prepare for the future by ditching the present. The only prudent idea is to proceed at a pace that's commensurate with what is actually happening in the present. And in the present, CDs still make the most sense."
Delmont believes that the lack of community involved in all-digital transactions has also helped to bring about such rampant discussion of the possible demise of the CD.
"The physical side to the music industry won't completely disappear as long as people remain social. I think people like to get out of their house and like to go to stores and be with people who are like themselves. People love to spend an hour in a record store -- they seem to love that real exchange with employees who care about music the way that they themselves do.
"You just don't get the same vibe from a Google search."