CD Sales Are Up and Merch Tables May Be the Reason
Written by djfrosty on April 3, 2023
On March 4, hundreds of metalheads stormed into Pierce the Veil’s pop-up store in Glendale, Calif., scooping up T-shirts, hoodies and other merchandise. In the process, they helped boost sales for an ostensibly dying product: compact discs. “Kids would look at the display and pick every single one of our records on CD,” says Michele Abreim, the band’s manager. “It definitely felt like CDs were a merch item, not just a means to listen to music.”
A relic of the record industry’s pre-Napster boom period thanks to megastars like *NSYNC, Britney Spears and Eminem, U.S. CD sales accounted for $13.2 billion in 2000, their peak year, according to the RIAA. But though the format has been in steady decline throughout the streaming era, retail, manufacturing and management sources say the digital discs have gained in popularity as keepsakes. More portable than vinyl albums and less affected by manufacturing delays due to supply chain issues, CDs are once again becoming merch table mainstays, and in the first 10 weeks of 2023, sales are up slightly over the same period last year, according to Luminate — 6.8 million in 2022 to 6.9 million, a 2.5% increase.
This growth could be a sign of a growing coolness factor, similar to the unexpected, and sustained, vinyl revival that began in the early 2000s, which is fueled by limited-edition releases pressed on colored vinyl and other bells and whistles. Taylor Swift took a page from that playbook when she put out Midnights CDs in different collectible colors last year, and BLACKPINK is among the many K-pop acts to sell elaborate CD box sets.
“There are ways to do CDs that are incredibly impactful,” says Carl Mello, brand engagement director for Newbury Comics. “You can get more revenue out of it, so it’s not like a ‘Will this do $7.99?’ thing. You’re selling a $30 thing that a customer will be really happy with.”
Bill Wilson, senior vp of operations and innovation for MNRK Music Group, which oversees 50 independent labels, says specialized CD-buying audiences are keeping the format afloat. “There are still pockets and subgenres of music [fans] — like metal — who like holding and cuddling CDs — and they’re not vinyl collectors,” he says.
For those who can’t afford box sets or to spend upwards of $20 for a standard-issue vinyl album, “the CD is a much more budget-friendly item,” says Tony van Veen, CEO of New Jersey-based vinyl/CD manufacturer Disc Makers, who crunched the latest RIAA sales data and found that vinyl album prices rose last year by 13.5%, to $29.65, while CD prices went up 15.3%, to $14.45. “Music fans are deciding with their wallets.” He adds that his company’s CD sales stabilized in 2022 after years of decline.
CDs are generally far cheaper than vinyl albums — especially classic-rock catalog releases, which labels occasionally put on sale in the format. Creedence Clearwater Revival’s Chronicle: The 20 Greatest Hits goes for $13.99 on Amazon, compared with $28.31 for vinyl; a Foo Fighters Greatest Hits CD sells for $11.49, slightly more than half the $21.91 vinyl price.
Although pandemic-related manufacturing delays for vinyl are easing, they have prompted touring acts to stock their merch tables with CDs. “I had a conversation with somebody yesterday, and they’re about to go on tour,” says Ric Sherman, owner of The Production Department, a consulting company that works with artists, labels and record plants. “Trying to get vinyl on time was impossible, and they defaulted to CDs immediately.”
The profit margin for vinyl albums is slightly higher than CDs — a $15 CD would yield roughly $13.50 in profit; a $30 vinyl album, $15 — but Sherman adds: “Vinyl’s expensive to manufacture.” According to van Veen, 100 CDs cost $150 to manufacture, compared with $1,500 for 100 vinyl albums.
“If artists are touring, it’s easier to cart those around than vinyl,” says Mello. “There are utilities to it, for sure.”
Despite the small sales uptick so far in 2023, the 20-year decline in CD sales shows no sign of dissipating: Sales dropped from 40.6 million units in 2021 to 35.9 million last year, an 11.6% decrease, compared with a 4.2% rise in 2022 vinyl sales, according to Luminate. (That said, vinyl’s sales growth has slowed considerably from the 51% increase it logged in 2021.) Major labels are also reluctant to bet on CDs to drive significant revenue in the future. Says a major-label source: “I haven’t heard of the idea that somebody’s so committed to buying a physical product that they’re just going to move over to the CD if they can’t get a vinyl product.”
Then again, 35.9 million in annual sales is not nothing, and CDs will probably be around for a long time. “They’re highly valued and sought-after,” Mello says.