Universal sees future for CDs

2008-01-27 by DaveSavesTheDay | 16 Comments
Canadian Press

CANNES, France - A music company executive says it's too early to write the epitaph for the CD.

The CEO of Universal Music's parent company, Vivendi SA says the death of the CD is not upon us, despite the rapidly growing popularity of online digital music.

Jean-Bernard Levy told a music conference in the southern French city of Cannes that he expects the market for CDs to last for "many years."

Record companies are reeling from the decline of the CD market, fuelled by music piracy, according to industry group the International Federation of the Phonographic Industry, or IFPI.

But in a question and answer session with delegates at the Cannes conference, Levy said he still believes there is "a big market to sell records physically for many years still."

"It's not the migration of one physical format to another, I think it's a transition into very diversified business models of which CDs will remain a part. I don't believe at this stage for the next few years we will see a complete showdown (elimination) of CDs," he said, speaking in English.

Record companies' revenue from online digital music sales rose 40 per cent to US$2.9 billion in the past year, but the growth has thus far failed to cover losses from collapse of the CD market, the IFPI said last week.

CD sales fell 11 per cent between 2005 and 2006, and are likely to drop further in 2007, according to the industry federation. Digital downloads now account for 15 per cent of the world's music sales, with more than 500 legally licensed music sites selling around six million tracks of music, according to the federation.

Asked about moves away from copy-protection safeguards on downloaded digital music, previously championed by the recording industry as a bid to prevent piracy, Levy sounded a cautious note.

"We are still testing it - but I want to recall our policy that is still we are strongly attached to DRM, especially for advertising-based models and subscription-based models," he said, referring to Digital Rights Management, which includes software coding that prevents copying downloaded music.

DRMs can frustrate consumers by limiting the type of device or number of computers on which they can listen.

Last year, Universal Music began testing an unlimited music download service in France offered through broadband provider Neuf Cegetel. It is also giving Nokia customers a year's unlimited access to millions of songs.

"We don't want to make too many comments at this stage," Levy said of the trials.

Tagged: Universal Records

Comments:Add a Comment 
January 27th 2008

I think there will always be a niche in the market of people that still value owning a physical album. However I find it sad that less people are buying CDs. Im guessing that most downloads are singles meaning that the majority of a bands record which they worked hard on will not be listened to. O well, lets just hope they don't stop producing CDs in our lifetimes.

January 27th 2008

Great news article.

However can't see digital downloads as being a great substitute to the cd, when the time comes and the whole market is taken over by it. Going from something physical to something completely virtual... guess thats just me.

January 27th 2008

I buy cd's constantly and I'd really miss them.

January 27th 2008

you can't put your arms around an mp3.

January 27th 2008

or look at cool nifty album art.

January 27th 2008

The death of CD would be the death of cool ass art designs (Circle Takes The Square...)

January 27th 2008

Look on the bright side, if it does happen, Manowar can't make album art anymore.

January 27th 2008

I'd pretty much cry if I had to listen to the terrible quality of an mp3 all the time.

January 27th 2008

If they ever did this, I would no longer buy music. I would only pirate stuff. If they expect us to pay full price for music, they need to give us full product. Not low quality MP3s.

January 27th 2008

I think that in the future the concept of an album will die and artists will just release singles as they please

January 27th 2008

The death of CD would be the death of cool *** art designs (Circle Takes The Square...)

Somewhat similarly, what comes to mind for me was how the dudes in The Pax Cecilia preferred to send people free CDs instead of just downloading the music for free so that the artwork can actually get out there, along with the name.

However can't see digital downloads as being a great substitute to the cd, when the time comes and the whole market is taken over by it. Going from something physical to something completely virtual... guess thats just me.

The problem is that it's already completely digital with a rather large amount of people. Go to a college dorm nowadays, and basically everyone just has a computer with a bunch of downloaded music and not a CD rack in sight.This Message Edited On 01.27.08

January 27th 2008

kill the ppl who invented mp3 !!!! aaarrghhh

they have brought upon a wretched curse on mankind...

January 27th 2008

I have a huge cd rack in my college dorm... probably around 400-500 cd's

the only place I ever buy digital music from is the grateful dead website, which offers flac files.

Danger Bird
January 27th 2008

Only way CDs won't die is if the major labels get off their asses and actually adapt to a changing culture, instead of treating customers like criminals. You have to make people want the physical product. These people could take a lesson from someone like Phil Elverum.

RIP OINKThis Message Edited On 01.27.08

January 28th 2008

I've always bought CD's... I like them so much that I buy CD's that I already have the digital information for, just so I can own a hard copy. Plus, as has been mentioned, the pretty album art is cool. I like taking down my copy of Blackwater Park or Wintersun and staring at the art. I would be sad if they became obsolete.

January 28th 2008

Buying CDs is just plain fun. There is something special about owning your own copy of an album, and it can't be replicated.

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