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EMI Music CEO says the CD is 'dead'
Last Update: 8:38 AM ET Oct 27, 2006

LONDON (MarketWatch) -- EMI Music Chairman and Chief Executive Alain Levy Friday told an audience at the London Business School that the CD is dead, saying music companies will no longer be able to sell CDs without offering "value-added" material.

"The CD as it is right now is dead," Levy said, adding that 60% of consumers put CDs into home computers in order to transfer material to digital music players.

EMI Music is part of EMI Group PLC (EMI.LN).
But there remains a place for physical media, Levy said.

"You're not going to offer your mother-in-law iTunes downloads for Christmas," he said. "But we have to be much more innovative in the way we sell physical content."

Record companies will need to make CDs more attractive to the consumer, he said.

"By the beginning of next year, none of our content will come without any additional material," Levy said.

CD sales accounted for more than 70% of total music sales in the first half of 2006, while digital music sales were around 11% of the total, according to music industry trade body the International Federation of the Phonographic Industry.

CD sales were worth $6.45 billion and digital sales $945 million, the IFPI said.

Levy said EMI is continuing to hold talks with Google Inc. (GOOG) on an advertising-revenue sharing partnership with the community video Web site YouTube, which the Internet search giant acquired in October for $1.6 billion in stock.

EMI's rivals, Warner Music Group Corp. (WMG), Sony BMG - a joint venture between Sony Corp. (SNE) and Bertelsmann AG - and Universal Media have all signed content deals with YouTube.

"The terms they were offering weren't acceptable," Levy said, adding that EMI continues to be concerned about copyright issues.

Company Web site: http://www.emigroup.com
http://www.marketwatch.com/news/story/s ... DFA59EE%7D

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Hey, I thought we already knew this. Hip kids want to buy vinyl again and they want the little MP3's playing in their little white ear buds. I honestly can't blame 'em. I am glad EMI is trying to spice up things a little with bonus materials. They've done a good job with the stuff they've remastered in the past few years. Hopefully they will give up the goods here in the future.... it makes collecting actually fun to see a double CD with bonus tracks instead of the old boring single CD with lackluster packaging.

[i]Record companies will need to make CDs more attractive to the consumer, he said.[/i]

Wow, did this guy get hit by lightning in order to figure this one out?


[i]"By the beginning of next year, none of our content will come without any additional material," Levy said.[/i]

I hope they don't consider Cactus Data Shield to be additional material [xx(].


I wish they would make DualDiscs with PCM 48000/24bit (or anything better than CD-DA's 44.1/16bit) on the DVD side, since it would be better sounding, but of course, people would bitch and moan that it's not 5.1 and why did they bother.

One big problem is...when they re-release this stuff, they price it too high, and people won't buy it with a high sticker price. The "cd is dead" b/c thats what the labels did to it.

[quote][i]Originally posted by DJ Phoenix[/i]
<br>One big problem is...when they re-release this stuff, they price it too high, and people won't buy it with a high sticker price. The "cd is dead" b/c thats what the labels did to it.
[/quote]

Nail hit on the head.

Do I recall proven allegations of collusion amongst the major labels regarding this?