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CD versus MP3

CD Versus MP3

If you have created an audio production (or if you're planning on creating one) you might be wondering if you should sell it as a digital download, a physical CD or both. You’re probably already aware of how popular iTunes and other digital music providers have become, but where do MP3 sales really stand in comparison to CD sales?

The Stats
At the time of writing (Early 2012):

Global $sales of CDs are just about equal. Most forecasts indicate that – at least in the USA - MP3 downloads will outsell CDs in 2012, and that CD sales will continue to decline as the years go by.

In the USA in 2009, 59% of music sales were on physical media like CDs, 41% were digital.
In the USA in 2010, 53% of music sales were on physical media like CDs, 47% were digital.
Source: Recording Industry Association of America (RIAA)

It's easy to see where these statistics are heading. 

Does this mean the end of CDs?
These statistics certainly indicate a rapid swing away from CDs in favour of digital downloads, but does this mean you should abandon the idea of selling your audio production in CD format? Definitely not. There are plenty of reasons to support both formats, so let’s look at the pro’s and con’s of each and decide what’s right for you.

MP3 – The Pro’s
Ease of distribution: MP3 downloads are a less time consuming product for you to manage. Customers can order and download from your website without you having to send them anything in the mail.

Scope of distribution: Having your audio production in MP3 format makes it easier to sell in multiple locations. There are dozens of online stores that will sell your download for you, iTunes and Amazon being just two of them. With MP3’s you can really spread yourself around.

Low Production Costs:  In contrast to CDs, MP3 audio costs nothing to produce once your recording is complete. The only real cost that you might incur is the cost of paying a graphic designer to whip up a digital cover image for you.

Growing market: As already mentioned, sales of MP3 downloads are already very strong, and there is no doubt that they will only continue to increase.

MP3 – The Con’s
Copyright infringement: Some people worry that MP3 audio is easier for people to copy and share with other non-paying consumers over the internet. However, keep in mind that many users of programs like iTunes will convert their CD’s into MP3s anyway, which means that any audio media format can be subject to copyright infringement. So even though I have listed this issue as a negative, you should not let this minor concern put you off MP3 audio.

CD’s – The Pro’s

CD popularity: CDs have been around for a long time and are still favoured by many people. Let's face it - most people have still got a CD player somewhere in their house. For some people, the tactile experience of holding their purchase in their hand is still very important.

CD’s – The Cons
Production Costs: It costs money to duplicate CDs and keep stock of them in reasonable quantities. You’ll pay for a graphic designer to do your album artwork, and if you plan on keeping stock of CDs on hand then expect to spend around $2-5 per CD (depending on the quantities you order).

There are some websites, like CD Baby and Createspace, who will manufacture your CDs "on demand". This means that they create CDs one at a time – only when a customer orders one from you. This is a great way to reduce some of the costs that are usually associated with stocking CDs. These online service also handle the shipping for you. Speaking of shipping, that brings us to the next point...

Distribution complexity: If you plan on selling CDs from your website, then unless you utilize use one of the above-mentioned distribution resources, it will be up to you to put the CD in the mail, address it, add postage and then drop it in the mail.

Making a final choice

Yes - the global market for CDs is still strong, but this should not be the most important factor in your decisions regarding audio format. The most important factor to consider when choosing between CD and MP3 is HOW you intend to reach your customers.

Here are some examples:

Example 1: You run a retail business in which you deal with customers face to face. CDs are definitely the way to go.

Example 2: You are conducting a seminar, and you want your attendees to purchase your audio production at the conclusion of the event. They’ll buy a CD from you while they are still hyped up about your presentation, but ask them to buy an MP3 download from your website and there is a chance that they will be distracted or that their enthusiasm may have waned by the time they arrive back at home. In a situation like this, it's essential to have CDs on hand.

Example 3: You have just started a website and you want to keep your operating costs nice and low. MP3s are definitely the way to go. Remember – you can always turn your audio production into a CD in future once you have developed your online business a little further.

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