I believe the bloggers and anlaysts who believe that the era of the CD is over are wrong. Why? Because we live in a culture where people like owning things that they like.
Example: I've watched every episode of "30 Rock" this season at least twice, but when that boxed set of Season 1 gets released in September, I'll be at the front of the line to buy it so I can give it an honored place on my bookshelf full of box sets of my favorite TV shows' best seasons.
DVDs are an increasingly better value relative to CDs
Here's the primary problem causing the decline in CD sales (in my opinion):
Other segments of the entertainment industry are aggressively competing on price in an attempt to grow their overall revenues. And if a consumer has got a somewhat limited budget for entertainment purchases, and other things are becoming better values than music, he or she is going to start spending less on music and more on other things. (D'oh!)
You may recall, quite a few years ago, when the movie studios realized that they would make a lot more money selling millions of DVDs at $20 than tens of thousands at $60.
That pricing strategy really, really worked! As a result, during the past few years, the street price-per-hour of VIDEO -- with high production values, and attractively packaged -- has come down to about $7 per hour of content in the case of movies (and as low as $3 per hour if you take into account bonus features) and, even more appealing as low as $1.50 per hour in the case of TV shows (see illustration).
Meanwhile, the record industry is obstinantly trying to hold to their traditional price-per-hour of about $20 per hour of content for mere AUDIO.
And why do they think that consumers will let them get away with this? The Maserati Imperative!
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