updated 08:55 am EST, Tue December 23, 2008
Gartner Sees Music CDs End
Music labels should all but phase out CDs as a key source of income in as little as a year, analyst group Gartner says today in a new report. Research VP Mark McGuire argues that the shift towards direct online music downloads is now so well underway that the industry has little choice but to push the format heavily and that the market share for CDs is declining too quickly to ever properly recover. By trying to sustain the physical medium for so long, the industry has failed to give buyers a viable alternative to piracy and clung to dying technology at the same time, McGuire explains.
He notes that many retailers have been steadily scaling back their shelf space, which compounds the issue as less selection is made available on CD and turns more shoppers towards downloads.
Instead, the analyst suggests a "digital first" approach that stresses releasing digital music first and pushing physical format sales only when necessary. Retailers and the labels themselves could press discs only on demand and thus avoid many of the risks of overstocking or otherwise running the typically high costs for CDs.
The analysis comes at the end of a year in which digital stores began to overtake the largest physical retailers, with iTunes surpassing Walmart in the US and maintaining its lead through the rest of the year.