CD sales v. Downloads

CDs are an inefficient way to sell music in 2012, but their benefits over music downloads remain numerous. A CD offers significantly better quality (1,411Kbps vs 256Kbps), an enhanced sense ownership that encourages people to part with their cash and a (mostly) trustworthy backup to a non-physical version. But downloads are instantly gratifying and feed the hunger caused by our modern sense of cultural entitlement — if it exists, why can’t I have it right now?

The perfect solution to this dichotomy should be to bundle digital downloads with the sale of a CD, and Amazon is perfectly placed to offer this.

It’s a practice that artists who release their work on vinyl often adopt. Since it’s a considerable hassle to rip an analogue source into an MP3, bands will give out a code on the back of a vinyl record for a complimentary digital version. The system works. Why a similar method for CDs, which can take a day or two at the best of times to be delivered, isn’t offered seems like a missed opportunity.

Only certain outlets would be able to execute this model: they would have to sell CDs from their own stock, operate their own music download store and have sufficient infrastructure to automatically know which CD corresponded to which MP3 edition of an album. Amazon checks all these boxes, and bundled audio sales strike me as a solid added benefit to its £49-per-year Prime service, which offers unlimited free delivery of items bought directly from Amazon, among other things, internationally.

It would be attractive to music buyers to know that if they buy from Amazon, they wouldn’t need to choose between an immediate download or waiting for a more collectable edition. The benefit to Amazon would be that shoppers could see a competitor offering the same album for a similar price, but opt for the former because they know they’ll get instant access in addition to a product they feel ownership over.

This thinking largely stems from my own frustrations with buying music: I still buy CDs but I hate waiting for them to arrive. I have in the past mentioned the idea to Amazon managers, and I understand it’s something the company has at least discussed internally.

I am aware of some hurdles that would have to be overcome. Firstly, bands don’t always release their music on CD and as a download via the same distributor. For example, the metal band Blotted Science are signed to Basick Records in the United Kingdom, but sells downloads of its work via its own platform. Were Amazon to bundle the CD with the download, it may effectively need to pay for the album twice at a trade level: once to Basick Records, once to the band.

Another issue would be returns. Amazon will allow CDs to be returned if they’re unused and unwanted, but a DRM-free MP3 download is not so easily revoked. Arguably a Prime member could pay £49 per year to order CDs, claim the download, then return the physical disc. Amazon would have to cover postage and handling in both directions, plus have to pay the band or label for the complimentary download. Would £49 per year cover these expenses and act as a method to upsell other items? Perhaps — many stores promote offers as loss leaders in order to encourage more profitable sales elsewhere.

A happy medium could be based around an app: buy the CD, get unlimited streaming of that album at great quality via mobile, tablet or computer. If the CD is returned, that album is removed from a customer’s library. Although this might prompt the question, “Why not just use Spotify?” this hypothetical app could be ad-free, and of zero cost to the customer (Spotify charges a monthly fee for unlimited ad-free streaming), with Amazon able to take advantage of the typically lower royalty rates streaming music come with versus paid downloads.

To many readers I suspect the lasting thought upon reading this would be, “Who cares? CDs are dying, downloads and streams are the future.” A fair point. But CDs remain an attractive purchase for a lot of people. Fans want to own something, browse liner notes with artwork and hold something they can put on a shelf; audiophiles want uncompressed sound quality to pump through their expensive Hi-Fi systems and costly headphones. It would cater to music fans like myself who cherish the immediacy digital distribution affords us, but love the sound of a high-quality recording.
As labels become less relevant and bands take ownership of their recordings and sales channels, maybe this is all largely academic. Bands will be able to bundle this sort of thing themselves with fewer repercussions to consider. But that’s still a long way off becoming the norm and in the meantime there’s a market of music fans not being catered for, and who would put money behind any business model that addressed that.