Hey Mr. Know It All,
I read your bullshit here and there about CDs being on their way out. I think you are full of crap. What I……

Ahem…sorry to interrupt you, but CDs ARE on their way out. Maybe their demise will not be total (after all there is still a market for 8-track tapes), but you will start seeing less and less of them, especially from small indie labels. I’ll explain:

Nobody wanted the damn things to begin with, that is, except the major labels. Go back in time before the CD (around 1985), when the cassette tape was king and vinyl was number two. The major labels were hemorrhaging money. Bad decisions made by out of touch, aging, cocaine-fueled record executives (read the book Hit Men by Frederick Dannen for more [great read]) led to big losses in money. The late 70s/early 80s saw the majors waste millions on such memorable albums as Paul McCartney’s 'Back to the Egg', Fleetwood Mac’s 'Tus'k, the soundtrack to Sgt. Pepper’s Lonely Heart Club Band (one industry hack quipped “It shipped gold, and was returned platinum”), Tin Machine, etc., all shitty sellers and huge money losers. The majors bumbled around looking for supergroups and they got a few (Bon Jovi, U2, Guns n' Roses), but high production costs and higher promotional costs (due to the advent of the music video) put them into a panic. Knowing that digital music would soon be available commercially, they searched for something digital to push on to the market. The reasoning was that a new medium would enable majors to resell their back catalogs in whatever the new format turned out to be, a scheme that could mean billions of dollars.

First thoughts went to the DAT (digital audio tape). The problem with DAT, according to the music industry, is that it was a recordable medium. Like cassettes, one could record onto DAT, and the specter of home-taping and the “millions” lost due to that worried the industry. (Let me take this opportunity to note that the industry’s “home taping is killing the music industry” line back in the 80s was a load of crap. The majority of people buying blank cassettes were doing so for personal use or to copy their own records for portable play. In fact, prerecorded cassettes were the top selling format for recorded music at that time. That said, there is a big difference between home taping and file sharing.) So, not only was DAT discouraged by the majors, the American music industry kept DAT machines off the commercial market by having the US government keep the tariffs on them high, something easy to do in the 1980s trade wars with Japan. Thus only recording studios were able to afford the machines.

The search for a medium that was not recordable brought us the CD. Philips got there first. Their hundreds of patents regarding audio CDs mean for every single audio CD purchased, whether it is a blank made by TDK or a prerecorded CD on Trick Knee Productions, a penny or two makes it to the bank o’ Philips. (Incidentally, Philips also owned the patent on the cassette tape!) There was no threat back then of CDs being duplicated on anything but a cassette, so as far as Philips was concerned, it was win-win. They pushed the CD on to the market fast and the other majors quickly follow.

Problem was no one wanted a new medium. The cassette and vinyl were fine and dandy. People liked their records and cassettes were good for the car or the walkman. So the majors had to create a need for the CD, and thus began a campaign of lies.

The first lie was that CDs provided better sound quality than vinyl or cassettes. The majors played on the public’s ignorance of digital technology to soften them up for the big sell. As many people now know, analog is a recording of sound, while digital is a representation of sound. Analog recordings transfers sound onto a material medium, usually magnetic tape or vinyl record, via sound waves. Digital recreates or approximates a sound or series of sounds using zeros and ones as coding. The more data you can include in the code, the better a picture of things you get. With a digital image, a jpg or a mpg, it is very easy to see the difference between something that has a lot of data (high resolution/more pixels) and something that does not. More data means clear picture, less data means grainy picture. Digital audio works the same way, however the public did not know this and the majors weren’t about to tell them. For why would someone want to buy an approximation of a sound rather than the sound itself? And kept secret was the fact that the sampling rates of early digital recordings, especially in the transfer to CD, was so low that any claim of superior sound quality was absurd (listen to digital recording from the early 80s or the first generation of CD [if you can find one that works], the sound is horrible. It is tinny and so crisp things like cymbals sound almost like static. Horns also sound awful).

The one thing that the majors could claim that the CDs had over records or tapes is that they lacked surface noise and tape hiss. Also the machine did not contribute to the sound you heard over your speakers. The sound you heard from CDs sounded clearer than a record or a tape, that is a record or a tape in bad condition and played on cheap stereos. Many believed that the lack of ambient noise was much better than the warmth, bottom end and ambience that analog proved but digital could not. Unfortunately many people mouthing the music industry line were more akin to barroom bullshitters than audiophiles or informed music fans.

The second lie was based on the first. Knowing that most people do not take proper care of their records, that they mistreat them, don’t change the needles on their record players or clean their tape machines, etc., the majors ramrod the idea that CDs were indestructible. I am not sure how many of you remember the TV ad where a CD is used as a coaster, put into a dishwasher, and then plopped into a CD player, but there was one. The claim was that you could treat your CDs like shit and they would play. Ya can’t do that with a record. Or can you? I have salvaged records that look like sandpaper was applied to them. Sure, the records had surface noise but the things played through. I’ve never been able to play a CD with a simple scratch in it. Nope, all I hear is geh-geh-geh-geh-geh-geh-geh. If CDs were indestructible or even durable, the Library of Congress would not continue to preserve all important audio records, including President Bush’s last speech (though some would argue about how important such an “event” is) on vinyl.

With these two reasons as an excuse, the majors put the CD on the market. High development costs and only a couple pressing plants meant that the retail price of CDs were $20 - $25. The consumer looked at the price tag of a CD and compared it to an $8 cassette or album and kept buying analog. They might have fallen for the sound quality lies, but economics dictated that the consumer go for the cheaper format. Record stores wouldn’t order what they couldn’t sell so the majors were stymied. Millions had been invested in CDs, plants were being constructed, ads touting the “superiority” of the product were all over the place, the claim that the public had mandated a new format did not seem to be true: The majors needed something to bail themselves out. They decided that the consumer didn’t know better, that they did, so the majors forced CDs on to the public. They told the big retailers, chains like Sam Goody and Tower, that they were no longer going to produce vinyl and that they had better clear the way for CDs. The solution to the music industry’s problem was as simple as that. Overnight, record stores removed the records and replaced them with these long boxes with plastic cases at the top.

Vinyl didn’t go away for good. The majors still produced limited pressings for true audiophiles, the foreign market, and the few diehards that clung to vinyl. Indie labels, especially punk, techno/house, and hip hop, kept the format alive. However, by the early 90s, the CD was king and the majors were making billions. The cash was not coming in by sales of new material but by all the people who dumped their record collection and rebought it on CD. For some reason, these folks believed that since records were no longer going to be made (an incorrect thought), their record players no longer worked. How else to explain someone spending thousands of dollars on something they already have?

Cassette tapes took a little longer to kill off: they were portable, CDs were not. It wasn’t until audio manufacturers were able to make CD players that could resist getting jostled about and small enough to fit in a dashboard or tote around, that cassettes were deemed obsolete. Now that the majors had both the market for home and portable listening covered they thought that they were in control. Enter the CDR.

While the CDR had existed for some time, it was mainly used within the computer industry for data storage. Burners tended to be expensive and unless you really had the need to store huge sums of data, a floppy disc was really all that most folks needed. For years the main mode of data storage for home computers was a floppy disc. A few things changed this: As technology advanced more stuff was done on computer. More stuff = more data. There were some files that just couldn’t fit on a floppy disc. A bigger storage medium was needed. Second, as microchips and memory could hold more data and processors could work quicker, home computers could do more and more, even to record your own music. Again, the floppy was not able to handle that much data. And, third, the demands of the workplace meant more and more people were taking their work home with them (something that has progressed to the point that we now lug computers back and forth with us). Again, the floppy was unable to hold enough data to make it viable. The need for a commercial CD burner was apparent. The computer manufacturers, not caring about or even cognoscente of the music industry’s concern over digital duplication, started marketing lower cost CD burners. It wasn’t long before computer users figured out that you could copy your CDs for friends or make mix CDs for personal usage and you could do so on relatively cheap (then about $2 a pop) CDR.

Though music industry knew that you could record on CDs, they just thought that no one would ever find out and that the technology to do so would be too expensive to make it viable. Part of their CD propaganda blitz was the notion that CDs were not a recordable medium. They worked to keep the consumer from knowing this by keeping CD recorders off the market. Again they did this by using the US government to keep the machines out of the US. However by 1996, Philips had figured out that the fight against the home audio CD recorder was a losing battle and, much to the dismay of the other majors, announced that they would have a recorder on the consumer market in 1997 or early 1998. The first commercial audio CD recorder hit the shelves at $789 a pop. Within 3 years, the price was half that. CD burners for home computers were standard and CDRs were getting cheaper and cheaper.

Meanwhile, a bunch of Krauts called the Fraunhofer Institute invented a little thing called the MP3. Back in 1992, it was mainly used to compact audio files so that they could be shifted to and fro, but the Fraunhofers were looking for a commercial application for it and soon enough it was picked up by college students and computer geeks and before you can say digital downloads, music files were being shared. The advantages of the MP3 over a CD are many. First, MP3 files are much small than the wav files that are on CDs. While this means that music is represented by less data and thus doesn’t sound as well as it would on a CD, people who play music on standard consumer sound systems and portable players don’t care about sound quality (otherwise they would have stuck with vinyl). Smaller means that you can store more of them on a CDR or even a chip. It means that you can transfer the data much faster and thus copying becomes easier. And, most important, it means that you can take this music and share/buy it without throwing something into a postal envelop or going to a store. MP3s are the most convenient music medium yet.

When Apple successfully marketed the iPod (not the first MP3 player but the “sexiest” and hippest), the music industry changed. Peer to peer sharing was not just something college kids and music freaks did. Moms and dads and grandmas and grandpas and little 6 year old Samantha now were in on trading music and downloading it into their little, cute white boxes. Combine the iPod with high speed internet hookups and being able to log on to the internet almost anywhere in any major city, why buy CDs?

What have we learned since the advent of the CD? CDs are not and have never been indestructible. No one knows how long a will CD last. Many of the first generation CDs have CD rot, the result of the glue that holds the layer of aluminum, on which the data is stored, to the plastic disc, breaking down. For other reasons no one really knows (or that they aren’t telling us – given the music industry’s record of deceit, I’ll go with the later) data drops off CDs. One day your CD plays, the next it doesn’t. Hmmm? And there are people who actually believed that you could throw your CDs in the dishwasher and that it was okay to store them on living room floor. More and more, folks are figuring out that CDR is an even less stable medium than CD. Even leaving a CDR exposed to sunlight can erase the data on it. People now think that MP3s are indestructible, in that, even if a file corrupts or data gets dumped, you can always download it again, that there is a bottomless pit of Jessica Simpson songs out there (which is unfortunately true).

The CDR, as fragile as a storage medium as it is, costs less than 10 cents a piece, and that is the consumer’s price. Many a CD buyer wonders why it costs them more to buy a single prerecorded CD than it does to by a package of 100 blanks. And if blanks are so cheap, why aren’t CDs? And right across from the office supply store where I just bought my 100 blanks for $10, there is a used CD store where I can buy used CDs for $5 a pop…or I could go home and download it. (Let us not forget that the majors were caught and convicted of fixing the price of CDs and of keeping that price high even as their costs were dramatically dropping. And the music industry wonders why so many people feel no guilt over free downloading and P2P sharing.)

The main movers of CDs are not record stores. They are places like Target and Walmart. The hundred square feet that they devote to one hundred titles is what determines who is in the Billboard charts. They have seen their sales drop as a result of MP3s. They do not care about music so when it stops selling well, less and less space will be devoted to it. There will be a ripple effect as sales drop. Already the major labels are trying to develop their own MP3 players and technology that will make is so that certain songs can only play on their players (though who knows how successful this will be after all copy protected CDs failed as soon as the codes were cracked). More and more of the major’s resources will be turned toward trying to figure out a way to tame this beast they unleashed. After all, we did not demand digital. We were fine with vinyl and cassettes. They forced the stuff on us, now they can’t control it.

So what does this mean for indie labels? Well, it is hard to say. Major label sales are what keep most record stores in business. Even the few mom and pop stores that have survived, who tend to carry more indie stuff than the chains, need to sell so many Coldplay CDs in order to pay the rent. It is doubtful that lack of sales of major label CDs will mean that Ye Ol Corner Record Store will take out shelf space and devote it to a gyro concession. More likely they get out of music altogether. But what if shelf space shrinks? Indies already have to compete in a very glutted market. Less available space only means marginal sellers will get squeezed out.

And then there is the question of filesharing and how they affect small labels. If some one fileshares the equivalent of 1000 of a CD I put out and 1000 of the latest Marilyn Manson, the impact is far greater on me. Let’s say that 50% of the filesharers would have never bought the stuff anyway, that leaves 500 CDs unsold. I don’t believe the filesharer’s rationalization that they eventually buy what they fileshare. Maybe 10% will live up to their professed ideal. I do know that CDs that I’ve put out fileshare far more than they sell. So when say 500 CDs go unsold due to filesharing, I lose out in selling half of a pressing. This is not a complaint; I accept it as being how music works nowadays. But where is the incentive to continue to put out CDs when I struggle to break even on a 1000 pressing? I am much more inclined to put out vinyl because I know that the people who are into vinyl will buy vinyl regardless of whether or not they can fileshare for free. They have already proven that they support vinyl otherwise it would not have survived. And by buying vinyl they prove that they support the labels that put it out. Will there be the same kind of loyalty shown toward CDs? Looking at the battle between CDs and filesharing, I say, “No.”

The marketplace for digital downloads is very, very young. People are still figuring out how it can be used or exploited. The majors would love to have a stranglehold on it like they have had over radio, periodicals, and chain stores. Already iTunes is difficult for small labels to get into without having to go through at least one or two distributors to get there. There are other pay download sites but they do not generate much income for the participants or are unreliable. Perhaps something will surface that small labels can use to help pay the expenses in releasing new and interesting music. But for me, vinyl has proven friendly, it generates enough income to pay for itself and make it so I can put more stuff out. Gone are the days, when a CD release could subsidize vinyl. Nowadays, my 7” sales subsidize the CDs I put out! What a long way back to zero.

It has been fifteen years since vinyl was declared dead. It is now as strong as it was then. I have no doubt that five years from now CDs will still be around (I am sure CDR will), but they will be a minority format. In ten, years I can see CD sales dwarfing vinyl. Remember, what you want does not matter when it comes to format changes. The vinyl album was eliminated overnight as a major recorded medium. The cassette suffered a similar fate, though it was the main format used to sell music worldwide. The same could (and probably) will happen with the CD. But just because a format is no longer dominant does not mean that it isn’t viable or even preferable. As noted many times, vinyl exists. Technology does not drive itself and what the majors want isn’t always what they get. Again, they were the ones that pushed for digital, and while they made billions in the short term, in the long run they will lose trillions. People took digital tech and used it how they wanted to use it. None of these things are inevitable.

Hey Mr. Know It All...

I’ve answered enough of your questions today. I need a nap.

-Scott Soriano