‘The end of the CD isn’t nigh...

Linn may have moved over to an all-streaming world, but the CD lives on

Despite the occasional outbursts of press panic, there's life in the silver disc yet, says Andrew Everard

We’ve just had another one of those panic-flurries that seem to run through the audio and music industries from time to time: ‘The end of the CD is nigh’ headlines popped up all over the place, as the wonderful world of the internet seized on a highly speculative piece published by an online music magazine, and quoting as its only source one of its own journalists.

‘The major labels,’ the article claimed, ‘plan to abandon the CD-format by the end of 2012 (or even earlier) and replace it with download/stream only releases via iTunes and related music services.

‘The only CD-formats that will be left over will be the limited edition ones, which will of course not be available for every artist. The distribution model for these remaining CD releases would be primarily Amazon which is already the biggest CD retailer worldwide anyhow.’

It went on to say that it had tried getting feedback from EMI, Universal and Sony, but all declined to comment.

And we know what a refusal to comment means, don’t we? In internet logic, it must be true.

Thing is, we’ve been here before, when Linn announced it was no longer going to make CD players, instead concentrating on its rapidly-growing range of music-streaming products.

Again the ‘end of the CD’ headlines spread like wildfire around the interweb, at least until Linn’s Gilad Tiefenbrun pointed out that he didn’t say he was going to stop buying CDs (well he wouldn’t, would he, given that the company includes the 2010 Gramophone Classical Label of the Year?), but that he would buy them, rip them, and then enjoy them on his shiny new Linn DS system.

Even in these pages Naim’s Technical Director Roy George suggested only a couple of months ago that most of the company’s R&D effort was going into streaming technology at the moment, but with a clear implication this was due to limited – though growing – resources, and the fact that, while CD is quite a mature technology, with streaming it’s a matter of ‘the more we know, the more we have to learn.’

Yes, yes, but surely there’s no smoke without fire when it comes to the fate of the CD? After all, the sales figures suggest digital downloads are rising apace, while sales of ‘physical media’ are taking a big hit, aren’t they?

Well, yes, but it’s not quite as black and white as it looks: while industry analyst Gartner says that ‘In the past 10 years, CD sales, the largest revenue stream for the industry, have eroded, while the online music revenue share is rapidly increasing,’ it’s going to take quite a while before the two graphs cross.

To quote Gartner’s own figures, ‘Worldwide online music revenue from end-user spending is on pace to total $6.3 billion in 2011, up from $5.9 billion in 2010. Online music revenue is forecast to reach $6.8 billion in 2012, and grow to $7.7 billion in 2015.’

However, the same figures show physical media are far from down and out: ‘By comparison, consumer spending on physical music (CDs and LPs) is expected to slide from approximately $15 billion in 2010 to about $10 billion in 2015.’

So that’s a rise of some 30% in online music sales, and a fall of around 33% in CDs and LPs, but then if the Gramophone steam abacus doesn’t fail me, those figures also suggest online accounted for some 28% of the total market last year, and will be 43% of the total in 2015.

In other words, far from the CD being a dodo within the year, it’ll still account for the majority of the market four years from now.

And it’s not hard to see why: the majority of music available online, legally or otherwise, is at relatively low resolution: 320kbps MP3 is the exception rather than the rule, with most content at 192kbps or less.

Yes, there are some labels offering content at CD quality in FLAC, or even higher resolution in some cases, but heavens does it take a long time to download unless you are one of the very few lucky enough to have superfast broadband running into your home.

I’m getting to the point where I’m seriously considering an upgrade from my current 8Mbps service to the 100Mb Virgin is now offering in our area, just to get rid of the interminable wait I have every time I have to download some music.

But that means an extra £40-something per month, on top of the music I buy – and at that point waiting a day or so for the mail-order envelope to pop through the door doesn’t seem that much of a hardship.

UPDATE: Since writing this piece, I have switched our home broadband and TV services over to the 100Mb Virgin package. The internet's now much faster. I'm still buying and playing CDs.