The CD Still Has A Future as Vinyl Revenue Overtakes The CD For The First Time

The Future of the CD is safe even though Vinyl has overtaken the CD in revenue for the first time in 35 Years.
Although this is not surprising considering vinyl albums can cost three times the cost of a CD. However I thought it would be good to dig deep into the data.

In this video I look at the latest data and give my thoughts on what I feel the future is for the CD format and how it fits in with the Vinyl resurgence.
Music fans collect music not formats so the main take for me is that physical music is doing well.
I am also aware personally that I am buying a lot more vinyl myself than I used to.

The UK CD Market is still worth £124 Million per year (Vinyl was £150 million) and the numbers in this video to do reflect CD sales from every source, genre or demographic.

Overall, music sales – including physical, streaming and downloads – increased by 3% in 2022 to almost £2 billion (£1.987bn), their highest level since 2003 and nearly double the level of their low point in 2013.

According to ERA, vinyl album sales grew 11% to £150.5m, while CD album sales fell 17.4% to £124m, the first time vinyl outsold CD by value since 1987. The change had been predicted last year by ERA, but the scale of the gap in the first year they have swapped places is significant.

The rise in vinyl sales, now in its 15th year, may be partly explained by the loyalty of fans when presented with multiple editions by artists and their labels. But prices have been increasing, with new releases often above £30, which means a considerable outlay for an artist’s most committed followers.

“Clearly exclusivity is a successful sales driver, but if you push it too far you run the risk of resistance from fans. Achieving multiple sales of the same record to a relatively small number of fans clearly works from a revenue perspective, but we should be wary of going to the same well too many times. Kim Bayley
Entertainment Retailers Association (ERA

SILVIA MONTELLO CEO OF THE UK’S ASSOCIATION OF INDEPENDENT MUSIC

The long term viability of the CD is under scrutiny. The format declined at an accelerating rate last year with sales down 19.3% to 11.6 million units.

Yet CD sales still outperformed the LP release for the highest-ranked indie vinyl releases by Arctic Monkeys and Wet Leg. With 67,877 CDs sold of The Car in two months last year, Arctic Monkeys had the biggest-selling CD by an independent act in 2022.

Montello said the format can still be valuable for the independent sector.
“It’s a really interesting one, because it depends who you talk to in terms of how many CDs actually sell and where they sell,” she said.

“Obviously, the importance of CDs has declined for several years now in the UK, and for certain genres it’s next to zero. For other genres and for other demographics, it still has its place. What’s hit it has been the reduction of supermarkets and generalist stores stocking as many CDs over the last decade, for example.

“But there’s still a place for CD. For some independent labels, if they want to put out physical product and enjoy the margin that they can get from that, sometimes they are now putting out CDs or cassettes because they’re cheaper and quicker to manufacture than vinyl, and it still provides something physical and tangible that the fanbase can buy into. So it will still have its place.

“As with anything else, the consumers will be the ones that decide when a particular format has run its course. Just look at what happened to vinyl – I don’t think anybody 20 years ago would have imagined that it would come back like this. So, let’s see what the consumers and fans dictate going forward in terms of format.”

Music Week Jan 8th 2023

Phil Aston | Now Spinning Magazine

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