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25 million iTunes downloads: portent to CD death?

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Apple has reached 25 million iTunes downloads with 12 million in the last two months alone since releasing the Windows version of iTunes. If things settle in around selling 10-15 million downloads a month average for all legal download music services (including iTunes), one would surmise that the legal online music service is legitimately here to stay, but this begs the question: what will ultimately happen to CDs? There is holygraphic technology on the horizon that can store a terabyte of data on a credit card sized card.

Will retail stores reduce their inventory like they’ve done with cassette and VHS movies to only carry new and popular artists? It will be interesting to review this situation 12-18 months from now and see what retail stores have done with their CD inventory. My guess is it will be shrinking, but to what degree I don’t know. Will stores like Best Buy have the eight to ten rows of CD inventory they have now?

I was at Best Buy recently and saw a customer using Rhapsody to assist with his music shopping.

Best Buy is also selling for $24.99 a three month (gift) subscription to a branded version of Rhapsody with a couple free downloads/burns. Interesting that they essentially are competing against their own store inventory.

Hopefully CDs won’t someday become coffee coasters like the seemingly endless supply of AOL discs, but I think this could be wishful thinking. It’s going to happen.

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About TDavid

  • The only problem with that math is that 25 Million downloads (of songs, not albums) still doesn’t equal anything more than .37 of one percent of last year’s dismal record sales. There’s a long way to go before Best Buy looks at those numbers and tells CDs to get lost.

  • Paul – this is true, but it is enough of a blip on the radar to start a movement, don’t you think?

    You can still buy VHS tapes at the store … but how much longer do you think they’ll last?

  • I don’t think so. There is something about tangibility. Having something one can touch and see as well as hear. I think some tangible form of audio will remain as common as books in the age of the Internet. Will it be CDs? Maybe not. But, the repository for our music will be something tangible. The ease with which we can lose digital music is one reason why.

  • I agree that having something tangible is preferential, but digital storage is going to replace CDs simply because of the space requirements on a CD.

    I think it would be so cool having a terabyte of data on a credit card sized card that fits in wallet or purse. Imagine having your entire music and movie collection in your wallet? No moving parts in this model either, which unfortunately will put some folks of business that sell those moving parts, but that’s how progress goes.

    Lots of uncompressed, high quality music can fit on a terabyte of storage 😉

  • Of course, if you lose your wallet, you’ve just lost your entire music collection. CDs haven’t even managed to wipe out vinyl or tapes yet, so I think it’s going to be a while before a digital music service is going to really put a dent of CDs. Plus, blank CD sales are soaring, so I don’t think you should throw out that Discman just yet.

  • Eric Olsen

    I’m sure you are right that another “forced conversion” is in the offing, but this time if it isn’t a better value – not just better technology – I don’t think people will go for it. I agree that digitaldownloads will become dominant, but it will take at least five more years and maybe more.

  • I’m a huge online-music fan, but I just bought 8 CDs before the holidays, and none of them are even gifts. I can’t quite explain why (well, I can sort of, they were really cheap thanks to Columbia House’s club) but I still like physical CDs for some things.

    With SACD and other more advanced media coming, there will still be plenty of media sales, though probably less and less over time.

  • I think it may change for some things. Maybe we’ll see singles being offered solely as downloads while albums are still sold as CDs. I think the forecasts of doom for CDs are warranted, but not because of downloading. The industry will have to come up with something that makes copying annoying enough that most people won’t do it and will opt instead to buy. Does anyone know if SACD can be ripped on a standard computer’s CD drive? I don’t think it can (unless it’s a hybrid disc, of course,) and I haven’t heard of SACDRom drives.

    I am certain that surround-sound media is the future, and will begin to phase out CDs within the next 5 years or so.

    As several of you have said, people want something they can hold, and while downloading is all the rage right now, people are going to want artwork and things like that to go along with it. Listeners may claim they don’t care about it right now, but when they don’t have it at all they’ll probably feel differently. And even artist-provided artwork printed from an inkjet printer onto cheap paper likely won’t satisfy anyone for long. Artwork, logos, liner notes, these are things that are so ingrained in the music experience now that I can’t see it disappearing. Webpages just don’t fulfill that need (Peter Gabriel’s Up featured a link to a site with all the lyrics and other stuff. It sucked, very disappointing. I, and many others, would much rather have the lyrics in the booklet to read along anywhere instead of loading the disc and launching IE.)

    I think, if anything, mp3 is doomed. People aren’t going to feel like that $.99 per song is such a bargain after a while, not when they play that crap on a good stereo and realize that yes, you really can hear the effects of mp3 compression. If everyone would get on the broadband-wagon, lossless file formats could pose a serious threat, but broadband’s not taking off like they expected it to.

  • the industry (or Sony, at least) has also been hoping that SACD will take off and everyone will happily begin to repurchase their entire collection…again.

    so far, it’s not happening.

    as chris p. has pointed out, vinyl hasn’t even been wiped out. in fact, i read an Industry Update item in Stereophile indicating that last year sales of new vinyl outstripped SACD sales 5-to-1.

    this may change if they decide to dump everything into hybrid format.

  • What would be nice is if the manufacturers would get low-price SACD systems out there, especially if they integrate them into DVD players. I’d buy SACD discs if I knew I could listen to it everywhere. The only discs I’d consider are the hybrids. They really haven’t thought this through very well – this is another (at this time) “one listening location only” thing and people just aren’t going to respond until everything – cars, computers, clock radios – have the technology to play it all. I’m certainly not going to invest in something I can’t listen to in the two environments I do 95% of my listening in – my car and my computer.

  • No moving parts is the future. Just think about how much stuff wears out in a CD player.

    It’s largely a matter of storage and convenience with consumers. If it wasn’t then explain why Laser Discs never really caught on? The technology at the time was far superior, but it never garnered more than a cult/technophile following.

    And RE #5, Chris, if you lose your wallet with your music selection and can go home and have another card generated in five minutes, big deal. It’s no different than having your 100 disc CD changer swiped (unless all those CDs aren’t burned CDs, then ouch!)

    Perhaps these digital cards will be fingerprint security enabled. This technology is also already here.

    This would help prevent piracy and ensure that even if the cards containing the music/movies were lost, they would be useless to steal.

  • Laserdiscs did catch on…in Japan. They’re still fairly popular over there. I assume they didn’t catch on in America because they were really expensive and couldn’t record television shows on them. If there had been a push to make cheap Laserdiscs the way they make cheap DVDs now, it probably would have caught on. But back then, the movie industry was afraid of making cheap movies because they were worried it would destroy movie theaters.

    And the “stolen wallet” scenario is just one possibility. Something that small would be incredibly easy to lose or damage. Yeah, I suppose we could h”have another card genrated in five minutes”. But what happens if your music collection falls out on the subway, and the music service you bought your mp3s from went out of business. Or what happens if they no longer offer the music on their site because only you downloaded it? Your entire music collection on one card? That’s an awful lot of eggs on one basket.

    The fingerprint security idea sounds pretty neat, but does that mean I can’t let my friends borrow my music? Can I make as many copies as I like? Can I resell it? Apple won’t say one way or another if Itunes customers have resale rights to their music, and they’re possibly the least restrictive of the online music sites. The entertainment industry has spent a great deal of time and money trying to restrict our fair use rights (hello DMCA!), and if we start giving up our physical copies of music, then it’s going to make their job that much easier.

  • Chris – can we both agree that something catching on from a storage medium technology perspective requires worldwide adoption?

    Japan has lots of niche things (Anime/Hentai) that haven’t universally been adopted. A lot of video games get made especially for that market. They are sort of a niche on their own, just as the United States is with some technology. PDA/pocket PC/WAP usage in Europe is more widespread and pronounced than the US. The list goes on.

    As for being able to share content with your friends? Good point. Here’s a thought: if you loan your friend a CD or book can you still listen to that CD or read the book? No. Yes you could burn it first (or photocopy the book’s pages) but was that really what was meant by the concept of loaning the content to a friend?

    I would support a format which would allow me to give my friends access to the material under the same loan circumstances.

    When something is allowed to be copied at will, it invites piracy. I understand the need for archival backups, but copied without some sort of control is problematic on a number of levels, IMO.

    I think the problem is that once you or I buy music we are frustrated if we can’t use it on our portable devices, our computer, in our car, etc. This is the problem with the existing medium and if everything was universal as far as a standard storage and identified by owner and/or owner’s authorization (insert the card, play the content), then the ability to make archival copies would really be a moot point.

    Nobody would really run down to Kinko’s to photocopy the latest Stephen King novel (if they’d even let one do that), but if that sucker was burned on CD, I can guarantee that some IRC channel is fserving it.

    Also, nobody has yet addressed the point of no moving parts, which is to me is the thing that I see propelling this forward. Computer hard drives, CD players, DVD players, etc, they all wear out sooner or later from the moving parts. Get rid of that aspect, and it’s a whole new ballgame.

    I think the move towards a holographic storage medium where a million bits of data can be transferred in a single flash of light is going to revolutionize how we all think about data storage. And the exciting thing is this isn’t science fiction.

    They’ve been working on this since the 40’s but they believe within the next two years they’ll have some sort of working commercial model. It’s not a done deal, and two years could become four or five years, but several different companies claim to be able to bring this to the table soon.

    Let’s bump this post in 12-18 months and see where things are truly at. I think 2006 is going to be an exciting year. A new version of Windows (Longhorn), and possibly the introduction of a new, viable storage format, HDTV the standard, etc.

    It’s a great time to be a geek! 🙂