NASHVILLE SKYLINE: Can the CD Be Saved? Should It Be?

Music Labels, Artists Try Price Cuts, EPs as Lifesavers

(NASHVILLE SKYLINE is a column by CMT/ Editorial Director Chet Flippo.)

Price cuts on CDs and increased use of lower-priced EP releases are the latest ploys the country recording industry and artists are using as an attempt at stemming the bleeding of CD sales, which have crumbled in recent years.

Country sales are looking a tad better this year, up by 17 percent over a year ago, thanks to larger than anticipated sales by Lady Antebellum, whose current album, Need You Now, has sold almost 1.5 million copies in eight weeks. Their first, self-titled album stands at just over that number. Additional boosts came from the Zac Brown Band and the continued sales strength of Taylor Swift and of Carrie Underwood. Still, overall CD sales continue to drop throughout the marketplace. Country digital album sales, however, are on the rise, up more than 50 percent from a year ago. Still, it will be a long, hard climb to begin to match the decline in CD sales.

Blake Shelton has commercially revived the EP, with his release of Hillbilly Bone, which sold more than 70,000 copies in its first week of release. The EP (extended play recording) has been around for decades in different formats. The term EP refers to a recording that contains more music than a single and less than a standard album. Shelton’s EP has six songs. Interestingly, some marketers and publicists have been testing the term “extended preview” to apply to EPs.

In January 2008, Capitol Nashville president and CEO Mike Dungan told CMT Insider the EP would likely be the wave of the future. He said, “Personally, I think that in the near future, we’re going to make bundles of music. Maybe three, four songs at a time. We’ll put them out three, four times a year, and there will be no more albums.” He added that releasing a music bundle online first, followed by a physical EP, might be a strong prospect.

Shelton told CMT Insider, “I’ve been told for the last 10 years that this was going to happen one day, and here I’m looking at it in black and white.” He said that when he looked at the Billboard all-genre album sales chart and saw his name next to Lady Gaga and Sade, he thought, “How the hell did I end up there? It worked. All you can say is that it worked.”

Shelton’s EP retails for $7.99 but is widely discounted for around $4.99. Other pending EP projects are planned by the Band Perry, Steel Magnolia, Luke Bryan, Jo Dee Messina and Matt Kennon.

CD pricing has been a sore point with music fans for years. CDs have been around since 1982 as a music delivery format, and they appear to have just about worn out their welcome. They turned out to — contrary to early industry claims — not be indestructible, after all. They are also a nuisance to store. They have also long been overpriced, at least in the minds of many consumers. Most are ultimately discounted, but a CD at a retail price of $18.98 is not an impulse buy for many consumers. Especially when many DVDs began to be priced lower than CDs.

The retail cost of CDs has finally been addressed in a major way by the music industry (prices of catalog CDs are usually lower). The behemoth Universal Music Group recently said it plans to test a new price structure — beginning soon but on an unspecified date — to run throughout the rest of the year. The planned cuts will take most new CDs down to prices of $10 and below. Ten dollars, which is also the price of an iTunes album download (actually $9.99), has long been viewed as a sort of psychological barrier, beyond which most impulse buyers will not go.

Other options are possible. Giving music away to get attention and lure listeners to concerts has been happening in other genres for years. Radiohead have offered free single downloads and invited users to pay as much or as little as they pleased for a download of the album, In Rainbows. Nine Inch Nails released The Slip free online in 2008. Wilco’s 2001 Yankee Hotel Foxtrot went on to sell more than 500,000 copies after the group streamed it free online. The conventional wisdom in Nashville has been that, since the average country fan was still holding on to and buying and playing CDs, why try to fix what ain’t broke?

What of the future? Personally, I think the price cuts are far too little, too late. But with the success of Lady A, we have graphic proof once again of an old axiom: If you offer the public what they want, they will buy it.