The Fire That Killed The Music Business

One of the sad byproducts of the London riots of the past few days is the catastrophic fire that burned a huge three-story, 215,000 square-foot building in Enfield to the ground. The building was owned by Sony DADC and held CDs and DVDs distributed by the Pias Group. Pias, one of the largest international music distributors, stored the CDs of more than 150 indie labels at the facility. All told, it's estimated that more than 30 million CDs were destroyed. It's not known exactly how much of the loss is insured.

While Sony will survive since they have product stored at other locations, this could mean the death knell for many of the labels who depend upon the income from CDs. Of course, the last thing the music business needs is to lose any indie labels at the moment. Bands like Franz Ferdinand, Arctic Monkeys and Oasis are also directly affected, as product will mostly likely not be available to support their summer tours as a result of the fire.

So much is made of digital music these days as it's always forefront in the news, but the fact of the matter is that huge numbers of CDs still sell every year. Remember that over 326 million of the shiny plastic discs were sold just in the US in 2010 alone. While digital sales seem to be as large, that income to a label is a tenth (at best) of what a CD brings in. Take away that income from a label that's probably already teetering, and you've just put a knife in its heart. It's hard to find a silver lining in any of this at the moment.

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