EMI Exec Says 'The Music CD is Dead'

Anonycat writes "Alain Levy, the chairman of EMI Music, made a speech at the London Business School declaring 'the end of the music CD as it is.' He went on to say that most CDs are simply used for ripping onto digital audio players. Levy adds that by the beginning of 2007, all EMI CDs will come with additional material to make them more attractive to the consumer. Revenue from CDs still outranks revenue from downloads by better than 6 to 1. Would it take 'additional material' to get you to keep buying CDs? What material would you like to see?"

Comments

What Is He Smoking?

[eldavojohn]

Would it take 'additional material' to get you to keep buying CDs?

I think that EMI executive found his way into one of his recording artist's 'secret stash' because his perception is not only different from statistics (6 to 1 is still a large advantage) but also different from what I desire as a consumer.

There are three letters that keep me buying CDs: DRM. As long as the only legal route to purchase music online is DRM encrypted music, I won't take part in it.

Granted, there are a ton of people out there that don't realize that they rely on iTunes to decrypt their music for them, I don't know how people can spend so much money without physically receiving anything. They aren't even getting a guarantee that they can play that file for the rest of their lives! They would have to burn it to a CD to ensure that.

I'll appreciate the added content to a CD but you don't need to do that to convince me that I should keep buying physical media. Hell, if you want to win back people, maybe you should get the word out that the iTunes TOS is downright shady?

I will admit that the first thing I do with a CD when I buy a new one is CDex it to high quality MP3 format. Then I put it on the shelf never to be played again. Why? Because that's my master copy that won't ever be scratched or stolen or lost. I may use MP3s to play my music, but I don't distribute or download them illegally. I'm well aware that I am copying them without consent but the only person that ever uses those copies is myself so I'm not afraid of a court case. Not one bit.

If the CD format is dead, you're going to have to figure out some way to get a physical master copy to me or I'm going to be upset mighty fast. I think if you remove this from people, some will start to miss it. And the second people realize that Apple's 99 cent deals were set by Steve Jobs & guarantee you nothing, I think there will be quite the demand for the 'ancient' physical media.

Is this just a case of 'I have it so hard! We need to change our business model, please feel sorry for us!' or am I the only one that thinks this dude is crying that the sky is falling?

Re:What Is He Smoking?

[sugapablo]

The CD will not be dead, so long as people still wish to hear a higher quality than they can get from compressed audio.

Or until record companies stop producing them.

Re:What Is He Smoking?

[Anonymous Coward]

I feel so incredibly sorry for you. Disposable music is a plague on our society. Here's an idea, don't buy the shit that you hear over and over on the radio--instead buy the stuff that actual has meaning for you. Chill out to Iron & Wine or enjoy Bloc Party, there are bands out there that write good lyrics and catchy tunes that don't sound like New Kids On the Block after their 15 minutes.

Re:What Is He Smoking?

[iocat]

You know what burns me up... The whole reason we switched to CDs from records and cassettes was supposedly the higher fidelity of CD audio. Now we all listen to crappy mp3s that sound like cassette tapes. wtf?

Re:What Is He Smoking?

[lanemcf]

I really hope people return to this comment in five to ten years, if for no other reason than to ask "who was Bloc Party?"

Re:What Is He Smoking?

[troll -1]

But you can still have the same quality in an audio file without compression. The problem with CDs is that with the advent of the Internet they're a very inefficient and expensive way of moving data.

Re:What Is He Smoking?

[handsome b]

Yeah. Or until somebody creates a Free Lossless Audio Codec... That would be sweet. I wonder why nobody has done that yet?

Re:What Is He Smoking?

[stang]

Some simplified math: [...] the transfer will cost $278.08, or $100 per MB of data.

Some better simplified math:

There are places that sell CDs all over the country. They manage to make a profit by selling a CD with roughly 500MB of data for $17, including:

• Manufacturing
• Record company and artist profit
• Transportation

So although a car may not be the most efficient form of surface transportation, ground shipping can be pretty cost effective. And increase the bandwith by a factor of 30 if we're talking about a semi full of 2-disk Special Edition DVDs.

Re:What Is He Smoking?

[JasonTik]

I have to take issue at the comment about 600 or even 1000 CDs. While in their cases, perhaps, this is true, I would put said CDs in spindles if I wanted to transfer large amounts of data. Doing that, I could fit your 1000 on the passenger seat alone, without any stacking.

Re:What Is He Smoking?

[7Prime]

If you're comparing the average mp3/acc (which tends to be 192kbps these days) to cassette tapes, then you need to go back and relisten to your cassette tapes, because you are FAR off base. Even as an audio engineer, many times I have to really listen to hear the inconsistancies of mp3s. I'm not saying they're perfect, but there are many other much more important things to worry about: namely the quality of the player, DAC, amplifier, and speakers. Cassette tapes leave loud tape hiss and have a highly degradated frequency/response curve, FAR worse than the slight flanging you hear with standard quality mp3s.

That said, even as bad as tapes were, people didn't switch from tapes to CDs because of their quality. Well, that was maybe part of it, but it was more the supposed durability, random access, and general convenience of CDs that really sold them. People will almost ALWAYS choose convenience over quality. MP3s are far more convenient, now days, than CDs. I carry a 60GB harddrive on my belt, called an iPod (you may have heard of it), that includes my entire CD collection of 400+ albums, plus my entire resume of both my musical compositions and my video works. I have all that in about 30lbs of boxes. More convenient? I think so.

It's only a matter of time before everyone's main stereo system takes some sort of non-physical media, and everyone has a wireless hub in their home. Then the CD will truly die. When iPod drives become 400GB, standard, for video and everyone can stream non-lossy audio files off the internet, I think we'll start to see the disappearence of lossy audio, so the mp3 is most probably a stop-gap at worst.

Eventually, we won't even have our music files on our own computers. They will be streamed to us, wirelessly, on demand, and we won't have to ever worry about physical media breaking down, hard drives going out, or anything else... accept fucked up DRM

Re:What Is He Smoking?

[SillyNickName4me]

Digital has many benefits, but quality isn't one of them. As a general rule, anything that's digital is of vastly inferior quality to its analogue counterpart by definition.

This is true, but of limited practical value.

The problem is that making a perfect analog reproduction is inmensely expensive, and with current analog electronics actually impossible due to the inherent noise of current technology analog electronics.

For practical applications, you can exactly quantify the losses of digital reproduction, while you can't in the analog case. You can make estimates, but unless you measure it, there will be uncertainty due to tolerance of components.

For this reason alone it is already easier to create somewhat good digital playback equipment.

With enough money and know-how, you can in many cases buy or build equipment that provides a better analog reproduction then any consumer grade digital media can provide, but for the same money, you can often also obtain much better digital equipment, and in both cases your next problem will be obtaining high enough quality media.

Whatever sounds more pleasant to your ears is an entirely seperate discussion.

Novel idea

[nizo]

Record companies will need to make CDs more attractive to the consumer

Instead of including a pile of other useless stuff that I don't care about with the CD, how about charging less than $20 for something that I (as someone who buys music online) consider to be worth at most $6, and can probably download for roughly that amount? This is of course assuming I actually want all of the songs on a given CD, which is rarely the case.

They keep calling themselves record companies, which pretty much explains the problem: just like records, they are trapped way back in a time before the age of the internet.

Re:Novel idea

[treeves]

This is true, but not like I thought would be when I started buying CDs back in . . . 1984?

I remember commenting to a sales clerk how they were expensive compared to cassettes or something like that and he remarked that "yeah, but as soon as lots of people are buying lots of them, the price will drop down to the price of cassettes, or even lower since they're cheaper to make. A CD costs like 50 cents to make."

The price *only* decreased because of inflation. The sticker price never changed, on average. OTOH, the very first CD I ever bought - a Telarc sampler CD, bought at the same as my Sony Discman, just so I'd have something to listen to - stills plays and sounds very good 23 years later. Cassettes that old sound bad, and I haven't listened to them much to cause wear.

I don't I buy many nowadays, but I'll keep buying CDs as long as it's possible.

disconnected from reality.

[Lumpy]

Yup all cars now have ipod capable stereos and NOBODY uses CD's in a car stereo anymore.

I guess the guy is either mential or chooses to ignore the millions of people that make below $40,000 a year and cant afford a new stereo with ipod and ipod adapter or mp3 player plus rf transmitter...

Most everyone at my kids highschool still uses CD's in their CD player.

Bullshit

[Pope]

All I buy are CDs, so that I can listen to them in my nice home stereo. I can't at this point see myself buying a music download from, say, iTunes. CDs are convenient, sound good, and last a long time since I take care of my stuff. This exec is either living in the future or is out of touch with the average music buyer!

Re:Bullshit

[stevey]

I too buy CDs, but only ever second hand.

That way I can get an album for a cheap/fair price, and don't feel like I'm supporting a company which has the idea of value-add meaning "Won't play unless you install our windows-only rootkit".

I'd pay more for albums from companies who would stop being so litigous, such as not suing people who post lyrics online, for the rare time when I hear a track I like on the radio and miss the name.

I like music. I listen to music almost 24x7 when awake, but I won't support companies who sue at the drop of a hat, and try to restrict things we can do with out purchases.

God knows there are enough used record stores I could probably buy a new CD a day for the rest of my life and still find new interesting tunes.

EMI Moderation System

[agent dero]

Can we mod his comments -5, No Shit; or how about -5, Too little too late?

These ivory tower execs should have realized almost 7 years ago with the advent of Napster that the CD was dying. Frankly, I don't think the iTunes Music Store should have ever happened, they should have realized the market then and adapted, now they'll have to play catch up to those innovating the non-physical media market.

Simple:

[Hawthorne01]

"Unrevocable permission is granted by (insert name of record label here) to the purchaser of this CD to store the contents thereof in the digital medium of his or her choice in perpeturity and to use said contents without altering their length, content or intent for any non-commercial purposes the user so desires.", or something like that.

And while I'm dreaming, I'd like a pony.

If they know 60% of their users..

[onion2k]

"The CD as it is right now is dead," Levy said, adding that 60% of consumers put CDs into home computers in order to transfer material to digital music players.

If they realise that 60% of CD purchasers are ripping content then why on Earth are they trying to make it more difficult? If this guy is correct then increased anti-piracy measures will alienate more than half of their target audience.

Either he's wrong (I doubt it) or the music industry is trying to commit business suicide.

But I suppose we already knew that when they signed Ashlee Simpson. ;P

Good music?

[fluch]

How about to put some good music on the CD? For a change...

Bye bye Ms. American Pie.

[SatanicPuppy]

CD's are in a weird limbo, because their adoption of a fricking solid digital format is still hanging fire. The only formats record companies agree on are awful...No good to consumers at all. Consumer unfriendly formatting pretty much keeps me buying CDs.

Besides, I'm not sure what CD profits being 6 times online profits actually means...I buy one CD, that's going to cost the same as what? 10 songs on iTunes? At least? So, maybe it's just that online sales, being mainly single songs, are exposing the obvious fact that most albums only have one or two good songs.

Rather have leprosy

[jenkin sear]

Wasn't the last additional material we found on a CD a rootkit?

DVD: $9.99 Soundtrack CD: $17.99

[Dr. Zowie]

To keep me buying CDs (or, rather, get me started again) the industry would have to lower prices drastically. When the CD of the "Bride and Prejudice" soundtrack costs twice as much as the movie itself, there is a serious problem with pricing.

He's smoking $100 bills

[rob_squared]

Or he would if CDs were actually dead. DRM'd music files are the wave of the future, after all. They get all the "buying multiple copies" syndrome that they did with Vinyl/cassette/CD that they did before without actually having to produce anything physical. Did you buy music from napster/rhapsody or whatever and now want an ipod? Great! Now buy it all in FairPlay format!

It looks like the record execs finally found a way to profit on this new business opportunity that everyone was saying to evolve to. They did, but only because they found a way to squeeze us a little harder.

A fair price would be nice.

[L4m3rthanyou]

I still buy CDs. Now, let me say, what would attract me to purchase more of them would be a more justified price on them. I'd buy a hell of a lot more CDs if they were $5. I like album art. I like having a physical copy of my music... and I like albums, not just songs. My biggest worry about the explosion of downloadable music is that it will forsake the album in favor of mass-produced, repetitive singles.

The record labels keep trying to add shit to CD packages (dualDisc? yuck) and cut costs by using crappy cardboard cases, when they could just stea-- I mean, charge less money. I mean, how much do you think it costs to stamp a CD? It's not like a lot of that money gets passed on to the artist anyway...

CD alive, CD PLAYER is dead

[HalAtWork]

He went on to say that most CDs are simply used for ripping onto digital audio players.

Traditional CD players may be dead, but the CD continues to be useful as a distribution medium. Clearly online distribution does not eclipse the traditional CD, in quality, in fundamentals (no DRM so you can rip to any player in any format, copy on all of your players at once [car, portable, PC], you get a permanent high-quality copy, particularly in DualDisc options, printed jacket + lyrics), and in extras (promotional material such as special editions with included DVDs etc).

The fact that listeners continue to buy CDs only to rip songs from show that the CD medium is very much alive and that online distribution can not match the value of CD-ripped music.

The traditional CD PLAYER on the other hand, may be dead.

Include the data versions of the song

[An anonymous Frank]

Indeed for years now I've been buying CDs only to import them on the computer and then put them away on a shelf somewhere never to be touched again. (A while back I used to give them away to friends, but then I got the sense that some of them would just show up to see what new acquisition I had, and it occured to me that this might not be entirely legal anyhow. Initially I was just pissed off at having been robbed so I didn't want to accumulate new posessions to lure opportunistic individuals once more.

Videos and other content can be fun, but I'll look at it (if I've got the time) only right after the initial purchase, and forget all about it later. (If most CDs had such content then I might be more likely to look it up but I'm not enough of a groupie to care for posters, etc.)

It's smiple, I listen to my music either on my 'puter at home, or my iPod otherwise, and that's it, so the CDAudio format has stopped being useful to me a long time ago (as in "years").

Now, if the CD included a session with the files already in mp3/mp4 format, with all the tags filled-in (incl. lyrics,) it would make the process of adding them to my library much quicker (and simpler). I wouldn't mind so much if they were DRM-ed somehow so long as the format was supported by my iPod.

Material

[StormReaver]

"What material would you like to see?"

How about starting by discontinuing litigation against your customer base? I stopped buying CDs when the lawsuits started. Granted, I was helped out by the music business itself. The stuff being sold today sucks so badly that I may not have bought it even if there weren't any lawsuits.

Re:statements...

[planetmn]

Customers are like me.

I don't think they are. The average person on Slashdot may be, but not the average consumer. I think a more accurate set of statements for most customers is:

1. I will pay for music that I like.
2. I do not know what DRM is.
3. I do not know how to remove DRM, and don't know why I would.

Probably the biggest boon for the record companies right now (at least in regards to DRM) is iTunes. For most people, iTunes just works. It's easy, it's cheap, they can listen to their music on their iPod which connects to their car and home stereo, etc. Most people don't have the issues with iTunes that are pointed out on Slashdot all of the time. And as long as iTunes works, the record companies can point to it as a successful, consumer-friendly implementation of DRM.

My wife doesn't know what DRM is. My mom doesn't know. Neither do most people I know. As long as the average consumer can access his/her music the way they normally do (via iPod/iTunes or on a CD), they won't know and won't care about DRM.

-dave

The CD is dead! Long live the CD!

[Anonymous Coward]

If you look at it sideways like, it is in their best interest to make the cd dead whether it is or not. With people ripping from a cd then safely storing it, they've probably figured out the once fragile cd now has a lot more longevity. Without cd's rattling around on someone's dash, they won't be getting replaced as fast. If the original cd does get destroyed, the owner may be just as happy to continue on using the compressed audio files.

Get rid of cd's, and you also get rid of that pesky used cd market, which generally has a price point closer to what the downloads charge than a new cd, and they don't see a penny from the secondary sales. Make everything digital downloads, and there will be laws to prevent sharing them or reselling them. They gave us what we asked for, so why show any mercy to those pinko anarcho-terror-[insert flavor of the month bad guy]-communist pirates?

Stop the "Only 1 good song" BS

[businessnerd]

OK I've been reading through this thread and I'm getting a little annoyed. Every other post I see is that "Maybe if there was more than one good song on the album, I'd buy it" crap. Ok for a lot of music out there this is true, but if you also pay attention, you will also realize that the one or two songs that are supposedly good are in fact utter dog shit. I guess I'm a little more critical of music. When I hear a catchy song, I recognize the fact that it is a catchy song and not really a good song. A catchy song means that there probably aren't any good songs on the album and the likelyhood of a second catchy song is slim. Buy an album by someone who puts out a song that is truly good, and by good, I mean is unique and requires talent to produce (both lyrically and instrumentally) and you will find that there are a lot of songs on that album that is just as good if not better (I'm one of those people that kinda likes the ten minute epic towards the end of the album that radio will never touch). I'm a very passive listener when it comes to CD's. I pop the cd in the car stereo and it will play until the album is over. Some I like, some I don't like, but overall I have a good idea of how talented the artist is. How can you say an artist is good when all you have heard is one song? One hit wonders get remembered for their songs, but no one remembers who performed it, and then some other band comes along and does a cover and the one hit wonder is forgotten, obscured by the shitty (usually) knock-off.

Ok I kinda went on a long rant there (and i don't feel like proof-reading so deal with it), but my point is that people really should think about listening to entire albums again. This is something that has been lost on the CD generation, and now even more on the internet download generation. Now I respect everybody's choice to listen to whatever they want however they want, but I think some of you out there will get a great experience out of listening to an album in it's entirety and have a better idea of what makes a good artist vs. a bad artist.

To give you a little background on what music I think is good:
1. Listening to a single track of Pink Floyd's Dark side of Moon is a crime against humanity.
2. I you ask me what my favorite Led Zeppelin song is (or album) you will get an answer that goes on for about an hour. I don't think I can narrow it down to fifteen.
3. Artists should (and do) earn their living by touring and performing live, and a good artist will not perform any of their songs in the same manner as they were performed on the album. I bought the album, I might have seen the video, so why did i come here?

I still buy CDs because...

[sdo1]

1) I still believe in supporting artists. If I can, I try to buy non RIAA CDs and/or CDs from bands who have managed to secure contracts that don't screw them over too badly (though that is sometimes hard to find out).

2) No DRM

3) I can rip at any quality I want. FLAC for at-home streaming. Lame encoded MP3 for my ipod.

4) I was raised to believe that I shouldn't take what isn't mine. I don't take that totally literally. I have no qualms about downloading a bunch of CDs off of usenet, but I do that to listen to bands that I might not have heard yet (to listen to the whole albums at decent quality, not a couple of hyper-compressed tracks that the record company or the band wants you to listen to)... and then if I like something I hear, I go buy the CD. See #1. I try to support the bands that I like.

Are CDs dead? Yea, kind of. I don't often pop a silver disc into a player to listen to it very often anymore. But until the music industry gets off this sue everyone and DRM the heck out of everything mode, I don't have much choice.

-S

You're missing the point

[Anonymous Coward]

This isn't *about* DRM. The exec is absolutely right -- most CDs are used only for ripping onto the consumer's iPod. Ripped files are not subject to DRM. What he's wrong about is the idea that they (record companies) have to add something to CDs to keep people buying them. What they have to do is *leave them alone,* and perhaps lower the price. (I say "perhaps" because they're already being purchased at their current prices. Lower the price, as was done with DVDs, and watch the sales increase.) The CD format is very high quality (despite the objections of a tiny minority of the listening public that prefers vinyl), and allows a variety of uses depending on the consumer's desires. Don't mess with it. --Dave

Levy's folly

[thethibs]

Levy's an idiot. He takes the stat that 60% of CDs are ripped and concludes that CDs are becoming useless. Hey Alain! We want the CDs to rip from for the same reason we used to dub our vinyl to tape. The CD's versatility is why 70% of music sales are from CDs. Don't piss off 42% of your market.

There's an architectural principle that says if you find a path across the grass, don't block it—pave it.

If EMI wants to add value to their CDs, the obvious thing to do is to save us the problem of ripping—put the MP3s on the CD. I'll gladly pay a buck or two extra for that.

Talking about bucks, it would seem that EMI are getting sensible. I just bought a new EMI release for nine bucks Canadian. That's a reasonable price.

Why don't I buy CDs?

[Kell Bengal]

I don't buy CDs that have copy protection on them. It treats me like a criminal. I bought a Placebo CD published by EMI and I couldn't play it on my computer like a normal CD. I invest a lot in computer audio equipment and I'm not going to use their crappy little player program instead of my usual tools. I, a legitimate paying customer, could not play something I'd paid for. I found those same tracks freely available online. By paying money, I had disadvantaged myself. Since then, I have never bought a disc with copy protection. I have never bought a disc from EMI. They have lost a loyal customer. Of course, being a geek, I extrated the data from the disc directly and burned a new, unsullied CD for listening to, instead. It was very easy; they have not only lost a customer, but also gained nothing in return.