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| From | Ken Kase <kenkase@nighttimes.com> |
| Subject | The CD is dead! Long live the CD! |
| Date | Sat, 28 Oct 2006 06:31:28 -0500 |
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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.
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