CD's strong in "album" market

Even though we have seen large scale reports of CD's virtually apocalyptic drop in sales, the latest numbers bring out some interesting paradoxes. It turns out that CD sales are still holding strong on sector in particular, "the album." Whereas digital sales are successfully cannibalizing the CD singles market, in digital albums, digital has a very small footprint.

That's because most people using something like iTunes to purchase music are looking for "the hit" on the album and purchasing a track or two. CD's are still the best format to experience an album. There really is no duplicate or better experience out there that is as compelling as the package a CD gives the buyer (soundcrank is working on a new format to solve this digital problem).

PriceWaterhouseCooper's predicted that CD's would decline from about 80% of revenues for the average record label, to around 40% within 4 years. That trend is not holding. In CD singles, the decline is actually matching quite well with the prediction but in album sales of CD's, revenues are actually still on track and in some cases actually GROWING! JB Hi-Fi's revenues from CD album sales increased by 30% last year and are on track to do the same this year (http://www.smh.com.au/news/business/music-on-discs-are-still-in-the-pink/2007/07/31/1185647900952.html).

Maybe the CD isn't dead, at least when it comes to the album format? According to JB Hi-Fi's president:

"Lots of people are trying to forecast the future, but the drop of CDs predicted [years ago] doesn't seem to be happening yet. Digital has made real inroads into CD singles but it hasn't made much of a dent in the albums market."

Until digital albums can provide as much or more of what a physical CD does in terms of content and experience, album lovers (and there are fewer and fewer of us) will be buying CD's.