Why Compact Disks Died

A reader writes:

One hole (or heavy slant, depending your POV) of Robert Sandall's article on the demosie of CDs is that he points his finger as so many inside the industry do at pirates.  "The CD contains the seeds of its own destruction," "We are giving away our master tapes," "Anybody who owned a CD could indeed use it as record companies had traditionally used master tapes."  Yes, it's the fault of those dirty CD pirates.

There's no question, I think, that the lack of a viable CD market in Asia, and especially China, is due to pirating.  But as a computer nerd with plenty of experience, trust me when I tell you that for the most part, it’s a lot easier to just buy the friggin' CD than to get the equipment and pirate it, or at least it was in the timeframe Sandall talks about. 

What he should really be writing about is the record companies' insane insistence on holding a high price-point with a whopping profit margin on CDs.  When CDs are manufactured for a few pennies, and record companies are charging $10-15 each, after a few years, the snap-back of the market is going to happen, like it or not.  In this case, the snap-back came in the form of iTunes and digital downloading, but when you overprice your product to that degree, and don’t offer consumers what they want and record companies had been doing that for decades, forcing folks to buy albums, when people wanted singles, before CDs even came along it comes in the end.

So Sandall and others can blame pirates, but the pirates didn’t force consumers to buy albums for decades, and didn’t overprice CDs by an order of magnitude for 15 years; the record companies did.  My sympathy is limited.

Mine too.