Music sales: The tale of physical vs. digital/streaming sales

The creative industry has been thrown into another bout of discussion after Socrate Safo, Director for Creative Arts at the National Commission on Culture and Chairman for the Film Classification Committee, made a bold statement that there is more profit in selling CDs than promoting music on digital stores.

Speaking on Happy 98.9FM, he stated that there is a bigger market for CDs than the various digital platforms musicians subscribe to and believes the digital platforms only exist to make money off musicians. He went on to say that it is a misconception for musicians and their handlers to have the conviction there are no customers for the CD market.

His assertion was received with mixed reactions. While some industry stakeholders agreed with his call, others ridiculed the claim and repudiated it with such force.

Slump in sales

There’s no denying the fact that, the physical sale of music has dwindled drastically. There’s that talk of, ‘nobody buys CDs anymore’ – a statement that has resonated in our industry for years.

Across the world, in large part, people have stopped purchasing music, as it’s available to them on a number of other easily-reached platforms at a fraction of the price. Sales have been falling for years.

Interestingly, records show that, the digital platform that was said to be the cause of the dwindling fortunes of CDs, have not racked up good numbers in the last years. The saviour of the music industry in the last couple of years has been streaming, thanks largely to platforms such as Apple Music, Google Play, Spotify, Pandora and Amazon Music.

A 2019 report by The Recording Industry Association of America (RIAA) which examined music sales trends showed that U.S. revenues of recorded music grew by 13% to $11.1 billion last year. The driver of that growth was the streaming music services.

Music streaming services have already delivered a new high of half a trillion (507.7 billion) on-demand streams in the first half of 2019, according to Nielsen, now MCR Data, a provider of music sales data.

But the news is much bleaker for physical and digital download music sales. Sales of physical recorded music, such as CDs, now just account for 10% of revenue. Digital downloads, such as the songs you bought from the iTunes Music Store, fared even worse, accounting for only 8% of recorded music revenue.

Who to blame?

In his bid to make sense of his claim, Socrate blamed the engineers of these digital platforms, who, with the help of the media, lampooned the era of CDs in relegating them to the background. He also blamed artistes and labels for also ‘killing’ the sale of CDs.

The truth is; he’s right!

In Ghana, there are so many towns and regions that have still not caught up with the craze of digital and streaming of music. They still rely heavily on the physical copies of music marketing. Those folks still purchase CDs.

It is understandable to have all the popular music retail shops in Ghana turn into other ventures, considering the discouraging low sales of music but surprisingly, the norm is prevalent worldwide. The lack of space being given over to CDs in retail outlets, such as supermarkets, is partly to blame for the fall. In US and UK, most retail shops that sold CDs do not longer make space and racks for such anymore.

Artistes have relaxed in promoting CDs anymore. They have stopped organizing album signings and even for those who still produce CDs, they do not market such sale points. They’d rather concentrate on hyping digital and streaming platforms.

According to the BBC, two recordings nominated for ‘Album of the Year’ at the Grammys last year, (H.E.R.’s self-titled debut and Cardi B’s Invasion of Privacy) were not even pressed as a CD in the US. It is the first time that’s happened since 1984 when vinyl reigned supreme and not all music releases were on CD.

Quality

A history of music sources is a history of ever-evolving technology and ever-lasting love of high fidelity sound. The 2010’s saw vinyl, CDs and streaming battle it out for attention. Since the mid-twentieth century, there has been an ebb and flow of music sources, with traditionally the CD eclipsing vinyl and streaming significantly denting the CD market.

CDs currently still enjoy superior sound quality to some internet streaming services. They enjoy the advantage of being less high-maintenance than vinyl and more reliable than streaming. While scratches on CDs do affect sound quality, CDs are not as sensitive as vinyl and can withstand more wear and tear.

Compared to streaming, CDs are more reliable as you just pop your disc in your player and off you go, whereas streaming relies on an internet connection and software which can’t always be trusted to work effectively.

CDs not yet dead

While there is a lot of nostalgia surrounding the CDs and CD-buying culture, the manufacturing costs and associated complexities of creating them leave a lot of more contemporary artists wondering if, in the digital age, CDs are really worth it at all.

All has not been completely lost for the sale of CD and reports of its death may be a little premature. The silver discs are still selling and tends to be music that appeals to older purchasers who to still value owning physical media.

Despite the slump in sales of CDs, the business of selling the silver discs is still a market in many parts of the world. In UK for example, CDs sold a worth close to £2bn in 2018, and the troubled retailer HMV sold £250m of those discs, so, clearly, it may be a while before we see the CD completely disappearing from UK shopping baskets.

According to Nielsen, nearly 103 million CDs were sold in 2017. That may not seem like much in compared to the year 2000 when CD sales peaked at 943 million — but there’s clearly still a place for CDs in the current market.

Artistes must be innovative

The music industry is notorious for changing right before our eyes. Over the years we’ve seen formats come and go and come back again. CDs won’t be around forever, but they aren’t going away anytime soon. Depending on your genre, your fans, and your budget, CDs can be an immense source of revenue.

As CD sales steadily decline, artistes must find more creative ways to sell them instead of rejecting that component in their sale of their music. In 2017, Kenny Chesney included a copy of his new album with every pair of concert tickets sold. The album became the first live album to top the Billboard 200 in seven years.