The end of the CD

For those of you who like music, Mark Cuban over at BlogMaverick has an amazing post on the evolution of the music industry. If you enjoy music, the next stop for you is to get an ipod like device.

Then it occured to me, that I haven’t used my CD Player, portable or at home, in a long, long time. That I rarely, if ever see anyone walking around with a portable CD player anymore. They have all been replaced by MP3 players. If everyone is switching to MP3 players, whether they are Ipods, in phones, in PDAs, in cars, whatever, then that means that everyone is going to have to go through a multistep process in order to get the music from where or how they buy it, to the place they want it.

That’s not good for the people selling music. Particularly retail stores. Think about it. Apple has done such a great job of selling us on why we should store our musically digitally, that every one is either doing it, or on their way to doing it. Which means that 90 pct or more of music being sold is currently being sold on a physical format that the segment of the music buying public that spends the most amount of money on music doesn’t want. They are being sold CDs. They want to listen to their music from hard drives or flash drives. That’s a problem.

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For less than 10k dollars, it would be EASY to put together a multi-terrabyte hard drive based multi-user kiosk that pretty much holds every song ever published. A screen to enter credit card information, swipe a debit card, enter a member number or call for assistance to handle a cash transaction, a couple USB ports, and wireless connection support to transfer the music, and you are in business. Check the music I want. From kiosk hard drive to my MP3 player at speeds that could easily do 400mbs. That beats the hell out of 250k if I’m lucky real throughput at home. It will be like going to the store to get digital prints from the camera is. Self Service, fast and easy

Loss leaders like Walmart and Best Buy can cut their music square footage by 90 pct and sell more music at lower prices. Their inventory carrying costs will go to zero. If someone wants the CD, they can go home and burn it after docking their MP3 player to their PC. Believe or not, the labels will make more money this way because they will make these big boys committ to minimum guarantees at levels they are at now, and all that money after the artist cut, will go to the bottomline.

We have been listening to music all week while we have been on vacation. It has all been via mp3. Read the rest of thepost. He makes great sense and knows the industry very well.