The emperor’s new CD?

Lisa Napoli Jul 5, 2006

KAI RYSSDAL: We talk a lot on this show about digital music and downloading. But the good ol’ compact disc still accounts for 90 percent of the music industry’s sales.

It’s getting a makeover from the world’s largest music company. In Europe at the end of the summer, the Universal Music Group is going to jazz up its packaging and raise the prices on the hot new releases. And at the same time it’ll simplify packaging and cut the prices on older offerings.

Marketplace’s Lisa Napoli says some feel that’s incredibly beside the point:

LISA NAPOLI: Dressing up the compact disc and charging more money for it is kind of like the Emperor’s New Clothes. So says Dave Kusek, co-author of the book, “Future of Music.”

DAVE KUSEK: Packaging is not the issue. It’s value and convenience is the issue. It’s part of a continued denial that the music industry has a problem.

The problem isn’t that some people hate those flimsy CD jewel cases. And the solution isn’t to make sturdier cases, or add extra tracks and videos. Industry observer Bob Lefsetz says CDs are a dying format and the industry just wants to maximize revenue.

BOB LEFSETZ: This is like, you now, a complete sideshow. It’s irrelevent. It’s to what degree is it Smith-Corona typewriters and one day you won’t be able to sell them.

Lefsetz says it all goes back to those peer-to-peer file-sharing sites where people get music for free.

LEFSETZ: More tracks are traded P-to-P in a month than are sold in a year on physical formats. For every track that is sold at the iTunes music store, there’s in excess of 10 that are traded.

In other words, to make money from music will take more thinking outside the box. Not just revamping the box.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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