Why People Still Buy CDs

If you read the news at all, you probably think that the CD format is dead and buried, but that's far from the truth.

Last year there were more than 170 million CDs sold in the United States alone that could be counted. No one knows exactly how many were actually sold, since so many sales (like direct sales at gigs and online from an artist's website) are under the Soundscan radar.

But as we've recently seen from Adele, there's a large audience out there that will happily buy a CD, sometimes even along with streaming the same music online.

The following graphic from a recent BPI report shows the reasons why many people continue to buy and use CDs.

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Why Consumers Buy Vinyl

Last week I posted about the extras that entice buyers to purchase a CD, according to a study by the British Phonograph Industry. Another part of that same study has to do with the reasons that consumers purchase vinyl records.

What's interesting is that the study looks at 2 groups of buyers; hardcore vinyl buyers who only listen to their purchase, and buyers who listen to their music both via streaming and vinyl.

If you look at the graphic below, those that listen to both streaming and vinyl seem to appreciate vinyl far more than the vinyl-only purchasers, as most points are in the 90% range.

What's most interesting (to me at least) are the points at the bottom. Most who listen to streaming find that vinyl is a good investment, like to show their collection to their friends, and like having it around for decorative purposes.

Covers have always been important when it comes to vinyl, and given that buyers really like to show off their vinyl purchases, they're now more important than ever, so don't skimp on that artwork!

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Streamers Buy Music Too

While nearly everyone in the music industry complains about the decrease in sales, a new study by the British Phonograph Industry (BPI) and the Entertainment Retailers Association has found that streaming may actually be at least partially responsible for whatever sales there are. Of course, this study was conducted in the UK, but it may be significant nonetheless.

The study found that streaming was a way for users to sample music and artists before actually buying. In fact 44% of the respondents that paid to stream said that their album buying habits have either increased or remained the same.

66% of the music fans surveyed also obtained their music from multiple sources, meaning streaming and CD or vinyl. The general consensus was that users streamed to discover, but actually purchased something they fell in love with.

Surprisingly, the results reflected not only older music fans but younger consumers as well, with the tastes of millennials falling in line with baby boomers in this area.

Also, about 33% of respondents would prefer a "one stop shop" where they could stream content, but also buy the CD on the platform if they wished as well.

Finally the survey found that around 40% of all albums are purchased in the final quarter of the year, with about half of these coming at Christmas. CDs and vinyl records are still prime gifts.

It just goes to show that there's still life in the CD side of the business, which may very well be around for longer than industry analysts predict.

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Platinum After 46 Years

There's always been a big injustice in the UK when it comes to issuing gold and platinum record awards. For instance, the 5 original Beatles engineers never received either award for the huge selling records they worked on because no record released before 1973 was eligible. After that point in time, if a record reached silver (60,000), gold (100,000) or platinum (300,000) levels, the awards were only issued if it was requested by the record label, and in many cases they never were (like in the case of Apple Records and The Beatles).

That all changed last month when the BPI (Britain's version of our RIAA) decided to automatically grant these awards regardless if the label requests it or not.

That means that all those who worked on big selling albums from 1973 onward will finally be getting their just due. It's been a long time coming, and it's too late for many who deserve it, but it's finally great that all those who were essential to the big hits from that era that we still love so much will finally be recognized.

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Music Industry Looking Up A Bit

Go to any music industry conference or trade show and about all you'll hear is doom and gloom about the current state of the business. Of course, the pundits are correct in their assessment that things aren't like they once were - sales have declined about 54% since 2000. But in some areas, things are actually looking up according to the latest report by the IFPI (International Federation of Phonogram Producers), which represents the the music industry world-wide.

So what's on the rise?

1) Performance royalties on recordings were up 7.6 percent to $785 million in 2009.

2) Digital music sales have risen by 9.2 percent to $4.307 billion, which now account for 25.3 percent of all worldwide music sales.

3) The rate of decline on physical product (like the CD) has declined, slipping only 12.7 percent in 2009, which was down from the 15% drop in 2008.

4) 13 countries actually had gains in 2009, including Australia (up by 4.3%), Sweden (11.9%!!), the UK (1.9%), and South Korea (10.4%).

On a side note, the British Phonograph Industry's (BPI - the UK version of the RIAA) released their 2009 numbers as well, and while they're in the ballpark with the IFPI's figures, they are a bit different.

In the UK, digital sales are growing by a rate of 48%, the decline of the CD sales is 14%, and digital music revenues are 21% of the total sales.

The RIAA has not yet released the music sales figures for the United States, although that should be any time now.

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Follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.