CD is Dead? You're Kidding, Right?

Joe Wilcox | July 26, 2004, 08:04 AM

Yesterday's Contra Costa Times made a startling pronouncement: "Those hundreds of CDs you've been hoarding since the '80s, for which you've spent huge sums for stereos, entertainment centers and decorative CD racks, are going the way of reel-to-reel, 78s and eight-tracks. Eight-what? Exactly. The CD, as a mass-produced physical entity, is dying."

The story, which is here, goes on about how MP3 players (and digital downloads) will replace the CD. Four experts, three from music magazines, pipe in to support this contention.

I couldn't disagree more. Apparently, my colleague David Card has a similiar position. In his report, "Market Forecast Report: Music, 2004 to 2009," published last week, he states: "Digital music is not a replacement for the CD in the foreseeable future; neither are any of the new physical formats."

Part of the Contra Costa Times story's problem is bad reporting mixed with some wishful thinking. Reel-to-reel and 8-tracks were never mainstream products. The formats existed alongside more dominant vinyl records, but never really vied to replace them. Also, I'm just old enough to remember reel-to-reel and don't recall it as a format for music distribution rather than one for song copying. As for the 78, the higher rpm vinyl dominated an early market that gave way to related formats long before the market maturated.

The story's other assumption is that the MP3 player and digital downloads are so much more convenient than CDs, consumers will make dramatic buying habit changes in a short order of time. Yesterday's Toronto Star ran a story (here) on the Walkman's 25th anniversary. I remember when cassette tapes were supposed to replace vinyl records, a prediction that pooped out, I might add. Sony sold millions upon millions of Walkmans, but the device's overwhelming success didn't kill off the vinyl record.

As I blogged back in June, I am a big fan of digital downloads and they have transformed my music buying habits. But, I also recognize that my position is minority. Nothing I've seen in JupiterResearch surveys suggests the MP3 player (and, presumably, the digital download) is going to replace CDs anytime soon. Like the original Walkman, the MP3 player will be used for music portability.

Shameless, but important plug: JupiterResearch's Plug.In conference commences today in New York. I will be there tomorrow, officiating the session, "Going Mobile: Music Devices & MP3 Players." I'm sure the four panelists will have much to say about the MP3 player, its future and position of digital downloads versus CDs. Please attend, if you're in New York.