Tuesday, February 15, 2005

The CD's end ?

on Washington Post

"The new format is no format," predicted Petersen, a 24-year industry veteran who also owns a record label, a recording studio and a music-publishing company. "What the consumer would buy is a data file, and you could create whatever you need. If you want to make an MP3, you make an MP3. If you want a DVD-Audio surround disc, you make that."

"We're moving beyond the media stage to the delivery stage," agreed Mitch Gallagher, 41-year-old editor of EQ, a San Mateo, Calif.-based magazine for music producers. At some point, he said, "you won't have something to hold in your hand" until you transfer a data file to a blank disc or tape.

"I think CDs are going to be around for a long time," said Petersen. "The cassette was a silly format. It was never designed to be a high-fidelity format. Plus like LPs, you had to flip the media over halfway through. Music buyers are still replacing all their favorite albums on CD."

"Remember," Miller said, "college kids and urban adults are buying their music online, but everybody else is buying their records at Best Buy and Wal-Mart."

However, there are other, contradictory statistics lurking out there:

During the second half of 2004, more than 91 million digital tracks -- songs downloaded from the Internet -- were sold, compared with 19.2 million in the same period in 2003. That's an increase of 376 percent.

More than 140 million digital tracks were purchased during 2004. Plus in the last week of 2004, digital track sales hit a record 6.7 million.

"What we've been seeing is just going to continue to develop," Simson said, adding that the popularity of downloadable music will force musicians, labels and watchdog groups such as SoundExchange to make sure all the right people are getting paid. "You're going to see record companies become much more focused on licensing. There are already subscription services now where you can listen to whatever you want when you want it."

Indeed, Napster's To Go subscription service allows buyers to essentially rent an unlimited amount of music for $15 per month.

"Everyone said the Internet is going to kill physical CD sales, but it's actually helping CD sales," Petersen said. "The Amazon experience is easier than going to a store. . . . Why aren't record stores using the Internet? If you keep things old-school, you are going to die."

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