Over the past few years, the music industry has seen a common trend in that CD sales are falling over time, while digital music sales are on the rise, not to mention what's happening with music illegally downloaded. Well, as consumers spend more time obtaining their music online and from other places such as supermarkets than in the music shops, last year albums sold in music shops made up less than half of all album sales for the first time.
Now, retailer stores have decided to start offering CD burning kiosks in stores in an aim to lure consumers back into the stores. Like most legitimate music download services, they charge by the song at just over $1 a song. The customer chooses their music on-screen and the kiosk burns the CD. Due to strong quality-control restrictions on how the music is stored and written to CD, the kiosks typically use super-premium blank CDs as required by most labels.
Unfortunately, the kiosks come at a price due to the requirement of copyright protections. According to a senior vice president from Musicland Stores, these kiosks cost around $25,000 each, not to mention the price of the blank media, which costs around five times that of typical budget CDs.
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Overall, CD sales are down about 7 percent from last year '” part of a five-year downturn '” while digital track sales are up more than 30 percent, according to Nielsen SoundScan. And traditional music stores made up less than half of the nation's album sales for the first time last year. To draw listeners back, retailers are putting CD burners and downloading technology in stores. The idea started with a jolt from Starbucks, which last year opened its first Hear Music coffee house in a pedestrian mall. |
As the Kiosks would allow consumer to build and purchase their own custom compilations in store, this is likely to have a bad impact on album sales in my opinion, since consumers would likely only buy songs they like on the album. From what I hear most say, most typically like between three and five songs on an album. From what I can see, this would significantly boost the single's charts as consumers would essentially be buying a group of individual songs as apposed to CD singles, however if the CD writing kiosk becomes a major success, I could easily see album sales falling way back.
As digital sales go up, it actually gets quite clear why overall revenues have gone down. First, when someone purchases a 99c track instead of a multi-dollar priced Single CD, that's quite a significant cut in the song price. However, as download singles have exceeded CD singles a good while back, this means quite
a drop in overall revenue. Now, as consumers can buy individual tracks
from an album (such as from iTunes) instead of buying the full album, the same
thing applies here. Album sales fall, however the number of individual
tracks consumers purchases instead of full albums will not account for the same
quantity of songs from the albums they would have bought otherwise, since
consumers would 'mix & match'.
As a result, consumers end up saving more money by not paying for full albums, which means less revenue for the music industry. Combine the revenues of the sales of both singles and albums and to the music industry it appears like sales are falling. No wonder the music industry just keeps blaming piracy and wants to hike music download prices!
Source: Modbee
