Balance Between Physical and Digital Distribution

I was reading an interesting article ("The Paradox of the CD", by Glenn Peoples) on Billboard this morning regarding the decline in physical distribution opportunities because of the decline in sales over the last few years. It is interesting because one of the biggest misconceptions is that if we as a label can "just put the CD out there for sale it will sell a million copies". That simply is not the truth. I believed I wrote a previous blog about supply doesn't create demand in the music business and now I have some numbers to back it up.

CD sales have dropped 17.9% from 2008. Which I guess was predictable considering the previous two years of double digit losses.

Retail chains are scaling back or closing like gangbusters. For instance Virgin Mega stores closed its last six locations, Trans World closed shop on many stores, Circuit City is out of business, Independents have closed, National chains have closed locations or scaled back on space for CD sales and Starbucks has pulled back from the space just to name a few.

It is still important to have physical product, all I'm saying is that there is less and less spaces available for distribution. The declining numbers alone are case and point to the fact that supply doesn't create demand. Peoples goes on to state that Labels will best serve their clients by a balance between physical and digital worlds. He goes on to state that labels should embrace digital opportunities.

Tate Music Group fully understands the importance of physical product but more importantly the availability of digital distribution. TMG presents titles each quarter to our music buyers who have proved themselves in a digital sales environment. Our relationships allow our artists the best of both worlds. Again supply doesn't create demand and for a retail location with limited space, we really have to provide sales numbers before we can expect them to take a CD off of the shelf and replace it with another!