We live in a streaming world — yet revenues from physical media (i.e., CDs and vinyl LPs) continue to grow every year.
Estimated reading time: 8 minutes
While the full 2022 music industry report is not complete as I write this, physical music sales for the first half of 2022 were $781 million — up more than 10 percent from the prior year — and on track to be over $1.6 billion for the full year. That’s a lot of revenue from physical media in 2022, and perhaps the most interesting thing is, after two decades of physical media sales in decline, CD and vinyl sales have been growing for the past couple of years.
Streaming vs. CDs
After a long decline in sales, physical media are growing again, and I believe it’s because physical media has several benefits that streams just don’t have. So, let’s make a comparison and let’s have a little competition: Streaming vs. CDs.
Now, you may think that as one of the foremost proponents of physical media for music artists — and CDs in particular — that I’m biased, but I’m going to try to be objective. Let’s break this competition down into the eight categories most important to artists and fans:
- Audience reach
- Sound quality
- Fan engagement
- Music Discovery
- Brand building
This is an important factor for independent artists: how do you reach as many potential listeners as possible? Not surprisingly, there’s a clear winner here: streaming. It’s an amazing way to reach potential listeners around the world.
Once your digital distributor delivers your song to every streaming platform, it will be instantly searchable and findable by a billion potential listeners. If you include YouTube, we’re talking multiple billions of people.
Before streaming, this was never possible. This ability to reach a huge audience is certainly the greatest advantage of today’s streaming economy.
The picture is a bit more muddled here. Clearly, the ability to email or text a link to your song on Spotify or SoundCloud or Bandcamp is very compelling. Copy and paste the link, mail it to your contact list, and it’s in their inbox. Simple.
But will they see it and will they click on the link? There’s never any certainty.
The CD makes a very compelling promo vehicle. A CD is very affordable: at under a dollar a piece to produce, you can easily mail one or hand one to a person you run into at a concert, at a bar, on the street… wherever. Even if they don’t listen to it, they have the CD in their hand. They’ll see the CD cover, they can read your lyrics in the liner notes, it’s always there to remind them of you.
All that said, while streams and CDs are great promo tools, I’d give the edge to streaming because of the ease and the reach.
CD sound is full 44.1kHz uncompressed digital audio. That’s as good as it gets for any mainstream music format. While some streaming services allow streaming of uncompressed digital audio, that requires pretty hefty bandwidth. So, by default, streaming platforms compress the digital audio, which requires less bandwidth but subtly changes the sound of your recording. Advantage: CD.
Nothing to talk about here, right? CDs are lightweight and highly portable, but streaming beats the pants off any physical format. Even the most hardcore music fan can keep their entire song collection on their phone. Not to mention, you can search for and instantly listen to just about any song ever recorded. Clear advantage goes to streaming.
One category extremely important to independent artists is fan engagement. What does that mean? Simply put, how impactful is your music on your fans and how do they interact with it?
Here, the CD is the clear winner. I’m sure you’ve experienced it: someone sends you a stream, or it shows up in your release radar or a playlist. You click it, you don’t like the first 20–30 seconds and skip to the next stream. Before you know it, you’ve forgotten about the track and the artist. Fan engagement is zero.
Even for fans who are into the music, there are limited opportunities to engage further. Yes, Spotify might have a short artist bio, but then they add a “fans also like…” section that will immediately try to take listeners to other artists. And yes, there are now some features for some artists, like lyrics and merch, but on the whole, the fan/artist experience on the streaming sites is really lacking.
A CD, on the other hand, with its graphics and packaging, immediately drives greater fan engagement. First, it’s physical. A fan can hold it, turn it over, take out the disc, look at the insert. You may not think that’s worth much, but in my opinion, a big part of the vinyl boom this past decade is about exactly that, the ritual of playing music: taking the inner sleeve out of the jacket, carefully taking the record out, making sure not to get your fingertips on the playing surface, placing the record on the turntable, and gently dropping the stylus on the leading groove. It’s almost a meditation-like experience.
Then, of course, there’s the cover, the photos, the graphics, the lyrics, and the liner notes. But one of the greatest things about CDs and vinyl, the thing that drives the greatest fan engagement, is how most fans get their vinyl and CDs: at a merch table at your concert. Talk about fan engagement. There you are, sitting at your merch table, and an excited fan steps up. You chat with them, they buy the CD, you autograph it.
On the engagement scale, this experience is a 10 out of 10. That fan will never forget about the interaction with an artist they love and they’ll always cherish that autographed CD. You just can’t get that from Spotify or Amazon Music.
Here also, streaming is a clear winner. I discover new tracks by artists I know and by new artists just about every week thanks to tools built into the streaming services, like Spotify’s release radar. They’ve built tons of other playlists, both algorithmic and curated, to aid in further discovery and to keep me streaming.
Regardless of how many new songs or artists I discover or stream, it costs me the same. All this discovery feels pretty much free to the music fan. It’s not like that with a CD, where you need to pay for every disc you buy. For budgetary reasons alone, this will inhibit discovery.
Yes, you can go to your local mom-and-pop record store and browse the bins and maybe discover something, but it’s not as simple as discovering new music on Spotify or Apple Music or Deezer.
Not much to talk about here. Everyone is on streaming. For under $10, you can have your song or your album on over 100 platforms. It’s no big deal to get your music onto streaming sites — digital music is completely commoditized, and that risks devaluing your music.
Having a CD, however, says that you’ve arrived, you’re a serious artist. It creates a whole different perception of your brand when a fan sees that you have a CD compared to when they hear that you’re on Spotify. Plus, the packaging of your collected work (the graphics, photos, lyrics) helps build your brand — who you are and how you want to be perceived — and you can control that much more effectively than a small thumbnail of an album cover that the listener may or may not even see.
Here, there is no comparison. One stream on Spotify pays about three-tenths of a penny — that means 1,000 streams pays $3. To put it a bit differently, you would need 3,000 streams to make $9, about the same profit you will make when you sell one CD at a concert for $10.
Which do you think is easier, generating 3,000 streams or selling one CD at your show? Physical media is the clear winner in the monetization game. Just about every independent artist I speak to tells me they can’t make money from streaming — there just aren’t enough streams to generate any income.
And the winner is…
Let’s look at which format has more advantages, CDs or streaming.
Turns out, it’s a 4-4 tie. Streaming is better for important categories like audience reach and portability, while CDs win on sound quality, brand building, and monetization — perhaps the most important of all.
So what do you do? Do you choose CDs or streaming? What a dilemma!
Of course, there’s no dilemma here at all. Independent artists need both. Digital distribution is close to free nowadays, so get your music on all the platforms and give potential fans the opportunities to discover your music. Use streaming as a promotional platform, then make CDs to sell at concerts and hand out to industry folks. You need to use every tool at your disposal to find success. I hope you do!
Watch more great videos on the Disc Makers YouTube channel.
Tony van Veen is the CEO of DIY Media Group, the parent company of Disc Makers and BookBaby. As a college student, he played in indie bands, created his own LPs, cassettes, and t-shirts, and sold them at shows. Today, he collects CDs, vinyl LPs, and concert t-shirts to support the artists he loves.