Fall from Grace: CDs Relegated to the Bargain Bin

U.S. Recorded Music Sales Volume by Format, 1983-2017. The orange segments represent CD. Source: Recording Industry Association of America (RIAA)

When we heard back in February that Best Buy was planning to drop CDs, we weren’t surprised. It’s now official: Best Buy has removed CDs altogether from its website and “de-emphasized” the category in its stores. In other words, CDs have been relegated to those chaotic bargain bins.

The orange segments in the bar chart shown here tell the story of the shiny disc that captured the imagination of music lovers 35 years ago.

The CD has been in free fall since 2000, when sales peaked at 942.5 units, or $13.2 billion in revenue, and CD represented a whopping 87 percent share of all music sales. Today, with annual sales of less than 88 million units, CD sales are only 9 percent of what they were 10 years ago — and still falling — having been displaced most recently by streaming (green in the chart).

“Does anybody remember the last time they bought a CD?” Best Buy CEO Hubert Joly asked rhetorically when he confirmed the fate of the CD at the nation’s largest consumer electronics retailer earlier this year.

Although CD has lost its luster, the category is still a billion dollar business. At the Electric Fetus in Minneapolis, CDs account for half of music sales and vinyl the other half, according to a recent story in the StarTribune. Industry-wide, though, vinyl sales are still quite a bit smaller than CD sales, accounting for 15.6 million units, or $388.5 million in revenue last year.

Cara Duckworth, spokeswoman for the Recording Industry Association of America (RIAA) was quick to point out that a billion dollar business is “nothing to shake a stick at.” As she explained to the StarTribune, “There are still fans who love CDs and want to continue to have that tactile experience of holding a physical product and reading through the liner notes, the cover art, and all of that.”


As CDs Go, So Go the Apps

stevew's picture

I buy CDs so I can burn them to FLAC to my music server for home listening. For on the go, I also copy the FLAC to my portable DAP. The only reason I do this is because you can't buy FLAC files for as cheap a physical CD. FLAC and Hi-res downloads are sold at a premium... I guess more bits equals more green. I put the CDs away in a closet for now. Someday when there is a CD revival, I guess I can choose to sell them like I did my vinyl. I didn't sell my vinyl to a used record store where they give you pennies on the dollar, I sold them to true collectors at a good price. I also buy used CDs for $2-$4, burn them and store those away too. Gosh, my FLAC sounds good... that I OWN. I won't be beholden to the music streaming services that can pull titles, raise prices, etc... I do pay $10 month right now to listen to new music that I might want to buy... on CD. Shine On You Crazy Diamond, um, I mean Disc.

hk2000's picture

I wish you included the whole key for that chart- just curious what the other colors represent.

brenro's picture
hk2000's picture

Thank you.

Bob Ankosko's picture
DL777's picture

Is the dramatic fall due to theft (illegal ripping of CDs or file sharing)? It would be interesting to overlay the amount of plays during this same time.

Mrsnikoph78's picture

RIAA would have you believe that pirates and Napster killed the music business somewhat, but there were plenty of other factors. A big one was iTunes / iPod, which re-wrote the rules of music to include the $1 dollar single which began around 2001 and solidified the presence of lossy formats given storage constraints of the period (and dominates the market these days, it appears). Innovation did more damage to the CD than did Napster. Napster was also an innovation which had shown companies like Apple that there might be a market for digital delivery of music in mP3 form, but a chief hurdle would be managing the cost of placating the music business which had a model based on different distribution channels. Its notable that when Napster switched to a paid service they failed. To this day I think Apple and others "stole" a good idea and avoided the same legal struggles. Now they dictate pricing and royalty battles but I suppose if the sales are there most people are pretty happy with it.

Before the CD, copying / recording of music on tapes guaranteed "generation loss" - whereas digital recording provided "bitperfect" copies of music which the recording industry hated. In fact the birth of the CD was hindered by the same ownership / DRM / pricing crap still alive and well today. At their peak CDs were selling for like $18-$24 an album which was hard to pay when I was a teen, and would be hard to pay today unless I knew the album was good. Today, Blu-rays ask such a high price that I rarely purchase any of them new. I wait for stuff to hit the $10 mark.

I find it interesting that they track streaming services but there is no mention of radio or satellite radio - the original "free" music for the masses which is ad-supported and which could hypothetically be recorded by anyone and then shared.

The RIAA hurt itself by aggressively pursuing people and suing the pants off them to make a point about who "owns" music in this world and who is allowed to distribute it. I thank the lord everyday that I can still buy CDs new and used, and "rip them" for my personal enjoyment on a PC or phone or what have you. I am also happy to have access to some of my albums online - provided Amazon stays in business I supposed I'll maintain an ability to download the albums again or listen to them online in their compressed and compromised fidelity.

Of course the larger issues are that the industry might "own" music because the handle recording, marketing and distribution costs, but they have no real right to dictate what technologies should prevail, IMO. After all, the technology behind all this stuff is vitally important and, no artists, no music. Period.

The death of the CD might be coming though. You know that when auto-manufacturers start ditching CD players in favor of weird smartphone-integrated solutions or on-board hard drive storage that more people won't bother with CDs anymore. But I don't think people should have to pay a premium for lossless audio, or listen via the internet until the internet is truly accessible anywhere, like radio! I want to own at least some of my favorite music, not rent it for the rest of my life.

Billy's picture

They over charged for years. The cost of producing a CD was far less then a vinyl record, yet they charged a premium for it. What ever happened to lowering the cost and making up for it in volume? Perhaps a happy and content buying public that paid far less for a CD might still be doing so if the profits were less for the companies....but...there still would be profits. Better some profit, mind you a lower one, then bankruptcy. Greed killed the cat. My real lament today is loss of the album with people just downloading singles. Perhaps artists should demand a fairer price for consumers so they buy a whole album vs a single. A lot of art isn't top 40 worthy but it is desirable. And face it, digital downloads cost basically nothing, so lets not get greedy here either.

CyberAthlete's picture

It was eventual. same fate may follow movies as well, 10 years from now who knows if physical media will be relevant (our community is not big enough to save an industry or shape consumer tastes and preferences). Those are the facts. We are the 1%.

So long and farewell CDs. Now I'll double down on making my own for the car.

We still have lossless audio streaming so it's not all that bad?

Patbarr's picture

Well, Target still has a few best sellers on their shelves. I think most fans buy online or from record shops.

Recently, I've been playing ripped CD tracks & downloads from my iPod via a little tube-based headphone listening station I set up in a corner of my living room. I like jumping from track to track quickly on my iPod. But I'm planning on adding a CD player or transport soon because it's a pain to go to the internet every time I want to find out who played drums or when an album was released. Plus, having a complete album does push you to discover new tracks and rediscover songs you had forgotten. And I am loving the cardboard sleeves with album art, artist photos and "the making of" notes!