Penny,

This is a very favorite topic of mine.  The economic and cultural
ramifications of download versus physical disc fascinate me personally and
professionally.  It represents the first time that an advancement in
technology has made it possible to completely bypass the retail deliverer of
purchased content.

About the time that iPods came out, I noticed an immediate drop in sales of
CDs.  It wasn't dramatic, mostly because most classical music was not
broadly available for download at the time.  But the combined
purchase/download effect of Amazon, Napster, iTunes, eClassical, and all the
many and various web sites that now offer a quality digital format
(debatable point, I know) have caused physical disc sales to plummet.  And
the publishers are well aware.  The owner of a fairly well known label told
me a few years ago that he is in a constant turmoil over whether to trade
his "CD dollars" for "download pennies".

The decision will be made for him.  Download is not merely here to stay, it
is the main medium for transmission of digitally-delivered content.  Cover
art and liner notes can be offered for a download, as well, as a .pdf file.
Almost nothing you get with a CD is lost in the era of transmitted content.
Most of the real thorny rights and reimburesment issues have been worked
out, about as well as can be expected.  Players of downloaded content are
now ubiquitous - they're even standard equipment in automobiles!

Negatives of download:  users expect a low cost download, and usually prefer
unbundling of tracks.  And the net revenues are low.  Some labels want
exclusive distribution rights.

Positives of download:  instantaneous access to content, and as broad a
market as there is.  And the kids love it.

I think the CD, just like vinyl, will never go away.  It will just become a
boutique kind of thing.  And a huge number of your potential customers will
no longer even have players, so you will almost certainly be forced to offer
a digital download somewhere, somehow.

Disc with no download is a poor way to go.  Download with no disc is
viable.  Download with available disc is probably the best of all possible
worlds because there's still a significant (for now) customer base that will
want the disc.  As long as the quality of the content and the master
recording are high, you can distribute through any medium you think is best.

-- 
Regards,

Dave Weiner
Brass Arts Unlimited
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