The CD Gets A New Use

Jeff Rabhan, manager of artists like Jermaine Dupri and Elliot Yamin, has a new view of the CD. He sees what the record labels have not- the CD as an advertisement. Rabhan uses the CD as a way to hype up more lucrative projects like concerts and merchandise sales. CDs introduce the music that fans will hopefully flock to see live. Competition from digital downloads is so fierce that CD sales cannot compete, and digital downloads cannot make up for declining CD sales, so it is time to focus on a new way to earn a profit. Aside from the seven- year decline of CD sales, just in the past three months, CD sales have fallen 20%. This is also due to the closing of specialty CD stores like Tower Records, FYE, Coconut Records, and Sam Goody chains. Even the larger stores who were stealing away business, like Best Buy and Wal-mart, are not faring much better with their CD sales. They have been slowly reducing their CD selections. This however does not mean that people have lost interest in music. People have just turned to digital downloads, or they have been forced to turn to digital downloads, since they can no longer find the music they want at CD stores, or rather they may not even be able to find a close CD store.

Turning to the Internet for music also brings up the issue of illegal downloads. The record labels have not been making many friends, but rather they have been driving away fans. The funny thing is that the labels still do not see this. They praise Audible Magic for creating a new system to monitor illegal downloading, which will probably only be cracked in the near future. The system checks online files against a database of audio and video content, determining whether the material has been approved for use. This is the system that is supposed to catch all of those college students who illegally downloaded 1.3 billion songs last year. It will be interesting to see how long the lawsuits continue for. More than a quarter of the student pirates have accepted an offer to pay a fee over going to court, and thus avoiding a mark on their public record. The fee ranges between $3000 and $5000.

The record industry needs to realize that they should focus on making their money from merchandising and concerts, rather than by suing college students and losing fans. Seeing the CD as a promotional tool rather than a focus to make profit seems to be a good first step. Perhaps this idea of a promotional tool could also be applied to digital downloads.