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« The Indie Artist Launch Plan - Part TWO | Main | How to Create a Successful Kickstarter Campaign »
Wednesday
Jun272012

Research Says Young Listeners May Embrace CD Quality Audio. Habit Says It Won't Be on CD.

The music industry wishes young listeners would abandon low-bit-rate compressed digital music for harder-to-pirate and more profitable CDs. There is new evidence their dream of abandonment may come true, but not necessarily with the desired outcome.

Physical media is in widespread decline. Billboard reported that CD sales sank 6% in 2011 while digital album downloads rose 20%. (Relatively miniscule, if growing, numbers for vinyl aren’t really a factor.) And who is still buying CDs in the USA? Eliminating a statistical outlier, the pan-category juggernaut that is Adele’s 21, the top-selling CD in each of the past two years has been a Christmas album (Susan Boyle’s The Gift in 2010 and Michael Buble’s Christmas in 2011). That buying demographic skews older, and when aging listeners stop buying new music (as they inevitably will), CD sales will stop merely declining and fall off the cliff. Unless, of course, a new generation of buyers replaces them.

Why are CD sales more attractive to labels than digital downloads? Legal precedent is establishing that a digital download transfers a license to the music rather than constituting a sale. Licensing is more lucrative than sales to the artist, often a 50/50 revenue split with the label for a license instead of a 10-20% royalty paid to the artist for a sale. With digital downloads hitting 1.27 billion units in 2011 and rising, that’s real money. Ask recent licensing-income lawsuit winner Eminem.

Contrary to the long-held belief that young listeners think lossy compressed music is “just fine,” Harman researcher Dr. Sean Olive has published results from the first peer-reviewed scientific test showing that young listeners will in fact choose CD-quality audio over lossy alternatives when given the choice. Has the dream of a new generation embracing CDs come true? Not so fast.

NPR intern Emily White, self-appointed spokesperson for her generation, wrote that she will never embrace physical media and prefers music access to ownership, triggering an immediate rebuttal from writer/musician David Lowery and a firestorm of debate. Ever the skeptic, I asked around. My unscientific survey of high school and college-age music consumers among my extended family and their friends confirms a strong preference for streaming services where available and a reluctant fallback to acquire digital downloads for situations where streaming services may not be available, e.g. when exercising or navigating the New York City subway system.

So while young listeners may eventually embrace CD quality digital audio, they don’t want the platter. As Dr. Olive concludes, “the challenge is to sell sound quality to kids at affordable prices and form factors they desire to own.” The new dream.

 

[About the author. Consumer Electronics and Software industry veteran Tom Dennehy publishes the online journal Surface to Air, triangulating among ideas and events at the intersection of the analog music past and the digital future. Follow him on Twitter @InAurem_a2d.]

Reader Comments (6)

whenever i read articles like this it reminds me of before the .com bubble bursting, when the constant over-hyping of tech alternatives gave an unrealistic picture of what was going on and helped drive the digital "revolution" off a cliff. there is no empirical evidence here. CD to digital sales are about 50/50 at this point and the truth is that no one knows how much more that may change. the fact is that americans like to own "stuff." that's an uphill battle in itself. and then there's also the reality of how kids listen to music. they are not just walking around with ipod earplugs in their heads. they listen online, they listen to downloads, they listen to cds, and they listen to vinyl. not just one of those items, but ALL of them. even though they can often listen to music for free, they still choose to buy it. and even though they could buy it digitally, sometimes they still buy cds because they want to own "something." i see it all the time.

June 27 | Unregistered Commenterdavid

Thanks David. It's seriously infuriating how much of the stuff that gets written basically has no real backing in truth. It's always random numbers from a very small sampling at best. I go to conferences and participate in discussions where for the most part the director of this conversation is primarily the the party most interested in your money. Spotify or any similar service isn't going to say anything but the 'people' want streaming. Unfortunately most people, most importantly 'artists' don't think and don't contribute to this dialog. They believe all they hear and make dumb decisions about how they distribute their material based on very biased, one sided 'monologue.

Often it's those who have simply not experienced travel and an extensive life of live performing in this age of over-night internet phenoms who say the most ridiculous things. I advise people to think or themselves and actually experience something before they make decisions on any level with not only their music careers, but for their lives in general...

June 28 | Unregistered CommenteriAreConscious

Yes. When CD's came out, Vinyl did not fall off a cliff straight away. The two co-existed for some time, though ppl probably didn't buy both.
I see the same today - if I come across an artist/ album that I must have, i'll buy the CD - it's the bets quality, and ultimately transferrable - car, PC, laptop, xbox, or one of the 2 CD players in the house. I don't own an mp3 player (any more/ yet,) but if I did that CD would get converted and loaded via the PC. If it's one-off must-have tracks, downloads will suffice.
My problem with downloads as an artist is, I don't trust the aggregators. Ditto music has already ripped me off, how many more?

June 28 | Unregistered Commenterdaznez

I, too, recently conducted my own music experiment at home. I bought a $150 turntable for my teenagers (16 and 18) and let them listen to vinyl. They absolutely loved the sound and thought it was so far superior to mp3's that if they felt if there was a way to buy that format to put on their iPhone, they would do it in a nanosecond. Someone needs to invent this next new thing. Pronto!

June 28 | Unregistered CommenterSusan

The Audio CD was not introduced to compete with vinyl, and vinyl will live on long after the CD is gone. Please see my companion piece, How VInyl and iPods Ganged Up to Kill the Audio CD. (Also appearing last month at Music Think Tank.)

June 28 | Unregistered CommenterTom Dennehy

@Tom, are you sure? While Vinyl will live on long after CD's, just like analogue equipment of all kinds will outlive all the cheaper digital crap, CD's were introduced so record companies could sell us all our favourite albums all over again, and are of course cheaper to manufacture than vinyl for new releases.

@Susan, good on yer! there are mp3 players around that you can load anything digital on to - 44.1khz, 16-bit Wavs are about as close as they're going to get right now, imho.

June 28 | Unregistered Commenterdaznez

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