Universal and Sony BMG bosses still want to sell CD buggy whips

Stan Beer
Monday, 28 January 2008 15:22

Opinion and Analysis

From all accounts, the Midem music industry event in the ultra-chic seaside French resort of Cannes last weekend must have been a love-fest of balding heads wearing earphones bopping along to music from the 60s and 70s and reliving past glories when teenagers used to line up outside record stores waiting to get their copy of the latest Beatles single. Those days are long gone but you wouldn't have known judging by the denialist rhetoric that sprang forth from the mouths of two of the leading recording industry executives.

Jean-Bernard Levy, chief executive of Vivendi, which of course owns the biggest record company Universal, and Sony BMG digital music boss Thomas Hesse, are obviously fans of the disco era song "Let's Get Physical" because they both claimed that there are years of life yet in the CD sales business.

Now I who still have a vinyl album collection gathering dust at the bottom of my old Hi-Fi system cabinet would be the last to claim that there isn't a strong second hand market for music classics on old vinyl and CD disks. However, anyone who claims that there's years of life in the CD market is at best misinformed. And if it happens to a recording industry boss, then he is having a lend of you.

The fact is the days of the specialist record shop are almost at an end. CD sales are dropping faster than a hot air ballon with a severe puncture, while digital downloads are soaring at an ever increasing pace.

Music industry executives are naturally not happy with this situation because there is less revenue and less profit in digital downloads than physical media like CDs. It's also harder to control piracy and illegal music sharing. And last but not least it's harder to call the shots with powerful legal online channels to the market like Apple's iTunes.

The fact is the recording industry is in a state of flux and it is not quite sure what to do. It is desperately trying to building alternative online channels to curb the dominance of iTunes by empowering competitors like Amazon. It is trying to build its own online channel. It is experimenting with DRM free downloads. It is watching as independent artists sell music from their own websites and online music stores.

In the midst of all this, we have middle-aged music industry bosses trying to sell the message that many people still don't have Internet access. Well I guess that's true - after all as Hesse pointed out Justin Timberlake did sell 3 million CDs and 15 million downloads of his latest album. Wait a minute, 83.3% of the album sales were downloads!? And this is supposed to support the contention that there's years of life left in the CD market?

Pardon me for saying this, but would it be rude to suggest that what these music industry execs are really saying is that the obsolete, wasteful, environmentally unsound, unnecessarily lengthy but highly profitable physical recorded music supply chain is fast coming to an end. So let's wring out the last drops and milk it for all it's worth because we'll never see easy profits like this again.