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Decline in CD sales in the U.S. has long-range effects

April 15, 2007|By TIFFANY ARNOLD

The 19-year-old summed up the plight of record companies in a matter of seconds.

"I'm going to be honest," said Ashlee Robinson, 19, of Martinsburg, W.Va. "I haven't bought a CD in like two and a half years. I hardly ever buy CDs. I have an iPod."

Robinson isn't the only music fan not buying CDs. The Wall Street Journal recently reported that U.S. sales of music CDs plummeted 20 percent in the first three months of 2007, compared with the same period last year.

CDs still account for more than 85 percent of music sold, but the trend of decline in CD sales is significant, and record companies themselves share in the blame, according to the young, MP3-player toting consumers who are getting their music online - both legally and illegally. They say they don't buy CDs because they cost too much and are skimpy on quality songs.

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"Why buy CDs?" said Mandee York, 20, of Hagerstown. "For the price of one CD, you can buy, like, 100 blank discs and make, like, 100 CDs."

"The only reason I bought three CDs last week was because my sister's computer was broken," York said.

The decline in CD sales is really hurting small, independent record shop owners and others who sell CDs on a small scale. Not only do they have to compete against major chains and discount stores, they're seeing a new platform, which cannot be easily transitioned into their inventory - unlike the eight-track tapes, cassette tapes and CDs that came before.

"Now, I have to go out of business because there is no next platform, there is nowhere else for me to go," said Richard Kell, owner of Record City in Chambersburg.

Kell said he doesn't plan on renewing his lease once it expires in 2009. He said even his own 19-year-old son and 20-year-old daughter get most of their music online.

His daughter Mary, a history and political science major at the University of Pittsburgh, had difficulty remembering the last time she bought a CD.

"That's hard," she said. "I guess I got a CD for Christmas. Oh, wait. Over the summer, I think, I bought a CD. I think it was Red Hot Chili Peppers."

Kell has owned Record City since 1984 and was its manager when the store was under different ownership in the '70s.

"I'm going out of business," Kell said, "because I don't like what I've become - a convenience store."

Kell said he sells Lotto tickets, soda pop, cigarettes and used furniture to make a profit - a stark difference from 10 years ago, when music accounted for 90 percent of the store's profits.

Now, "I'd say music sales only make up 30 percent," Kell said. "The rest is cigarettes, soda and Lotto tickets.

Siaka Hines, manager of Stix-n-Phrases in downtown Hagerstown, said music only makes up about 2 to 3 percent of the store's overall profits. Stix-n-Phrases, which has another shop in Gaithersburg, Md., focuses mostly on urban apparel and sells its own clothing line.

But there still is a market for certain kinds of CDs, Hines said.

Stix-n-Phrases sells CDs by local artists and other CDs called mixtapes, a major fixture of the underground hip-hop scene.

The mixtape - a collection of songs by different artists usually compiled by a well-known DJ and distributed to indie record stores - have started to generate a buzz in bigger, more well-known outlets. MTV.com even has Mixtape Mondays, with a portion of the Web site dedicated to covering mixtape CD releases.

Hines said he doubts the market for mixtapes will ever lose its footing to the Internet.

"Because with mixtapes, you get things that you don't hear on the radio. It's almost like having a remix to a song," Hines said. "It's different from what you'd hear commercially. That's why people go for mixtapes. It's underground."

Not everyone is getting into the online music trend.

"I actually buy CDs," said Andrew Maldonado, 16, of Falling Waters, W.Va. "I, like, download music, but it's a lot better quality if you just buy the CD."

Andrew, a junior at He-dgesville (W.Va.) High School, said he owns more than 200 CDs in his collection, and when asked whether he'd ever stop buying CDs, he said, "No, dude."

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