CDs vs. Spotify for Musicians & How You Can Use Both to Improve Sales
June 26, 2017
How do CDs compare with streaming services like Spotify? Here we break down their differences and share ways for you to sell even more CDs while still using streaming services.
CDs vs. Streaming: Total Revenue for Musicians
To this day, CD sales still surpass streaming services for musicians, coming in at around $7 billion in 2015, while streaming hovers just around $3 billion.
Musicians also profit the most from CD sales:
|Artist Earns: $7.50 per disc
||Artist Earns: $0.0011 per play
With these numbers, in order for a musician to make $11, they would need over 10,000 plays on Spotify.
CDs vs. Streaming: Sound quality
Listeners faithful to high-quality audio will be easily swayed by the unparalleled sound heard on a CD: Sound quality is nearly 5x better on a CD than streamed on Spotify Premium at 320 kbps. Free streaming options such as Spotify and Pandora cut quality even further:
The difference in sound quality matters. According to the LA Times, “Neuroscientists are beginning to look at how the brain responds to compressed mp3s… results suggest that with high resolution, the brain's emotional activity is the same as with live music” and that less dopamine is released with compressed, low-quality audio files.
CDs vs. Streaming: Lifespan
CDs have a long lifespan - at least 30 years. We have no idea the lifespan of a web-based streaming service - or whether their services will change in the future. What if their cost structure changes or they add in ads even for premium members? Even one of Hulu’s premium streaming options, which costs $7.99/month, has ads, and according to USA Today, the “limited” ads are not so limited after all:
“$44 annually, and put up with a few commercials. How bad could it be? Really, really bad. As I noted, worse than watching network TV.” In just one streamed episode, there were 6 commercial breaks with a total of 15 ads.
Using both to maximize revenue
Most Listeners Prefer Having a Physical Copy of your Media
In a survey done by AudienceNet for Music body BPI and the Entertainment Retailers Association (ERA), two-thirds of people polled said that they considered themselves “multi-channel listeners,” enjoying both physical media and streamed media. 89% of people said the quality of the sound was a key reason for them purchasing CDs. Many others wanted to own something tangible.
“This research suggests music fans are a great deal more nuanced in their approach to new forms of technology than they are sometimes given credit for," said Kim Bayley, Chief Executive of the ERA.
Other music industry professionals agree that CDs are going nowhere, and tangible media can coexist with streaming. “I don’t see why one has to eradicate the other,” says Sulinna Ong, VP of Artist Marketing at Deezer. A tangible product, like a CD or vinyl, is “a reminder of something that you’ve experienced, that lives on.”
Fans appreciate streaming for discovery and immediate listening, but they still want to own and collect music. By allowing people to discover your band through streaming, you’re engaging more listeners to try your music in a way that is already comfortable with them. You’re also ensuring that your music is available to fans even if they’re away from their CD collection. Streaming can still benefit you overall and can be considered part of your connection to fans.
Give Listeners More Reasons to Buy Your CDs
Maybe some listeners are less concerned with quality, or they don’t want to carry CDs with them. You can still convert these listeners to buy CDs. You just have to offer solutions to their concerns:
1. Concern: “I don’t want to carry a CD - what if I break it?”
Solution: offer warranties on your albums
If a CD gets broken, then the listener no longer has the media that they paid for. It’s an understandable concern and one you can easily fix: offer a replacement option for those who break their disc.
If you want to save on costs, add limits to the warranty or send the replacement disc in cheaper packaging. You could also offer the warranty with other exclusive products as part of an upgraded package.
2. Concern: “I’d rather have something else than just a CD."
Solution: offer more products in a package with your CDs
For listeners who are on the fence about buying a CD, you can sway them by providing exclusive perks that are unavailable online:
- Include exclusive songs on your CD that you don’t share on Spotify
- Offer a DVD to include more media such as high-quality music videos, interviews with the artists, or behind the scenes footage
- Offer limited edition posters, shirts, buttons, jewelry, art, or branded products like headphones to encourage album sales. Current fans will love to have band swag, and new listeners will appreciate having new art or discounted headphones.
3. Concern: "I just don't have that much money"
Solution: offer a low-cost CD
If you can include a low-cost tier of products to increase your sales without breaking the bank, you’ll be providing an option for uncommitted listeners to purchase your most popular songs at a lower rate. Find the most affordable option for CDs and packaging, or include only a few songs on the disc.
In the end, you can use both CDs and streaming services to your advantage. Streaming is a great way for listeners to discover your music and easily share it on the go with others. However, you can easily convert all types of listeners to purchase CDs by providing options to suit their needs.
Most listeners do want a tangible product, and a CD is a perfect way for listeners to support an artist, have the best quality sound, and have a copy of your music for decades.
By maximizing the potential of both channels, you’ll be able to engage all of your listeners. They’ll be better able to support you if they have more options and opportunities to spend.