updated 03:45 pm EST, Wed November 26, 2008
Atlantic Digital Trumps CD
Warner Music sub-label Atlantic Records today said it became the first major music company whose digital sales outpaced its conventional CDs. The group's sales of full songs, ringtones, and other content online now accounts for 51 percent of Atlantic's revenue. The label, which represents artists like Kid Rock and T.I., credits the change to spreading out where and how users can get music rather than depending heavily on a single source.
"It used to be that you could connect five dots and sell a million records," label president Julie Greenwald says. "Now there are 20 dots you can connect to sell a million records."
Critics however have already noted that major music firms that also include EMI, Sony and Universal have also seen steady declines in their CD sales and as such have had to depend more on digital sales to either make up for lost sales or to slow their gradual declines in wealth. Universal in particular has just recently turned a profit from digital but still depends on CDs for the bulk of its music.
Labels have lately taken more dramatic steps to boost their income, including deals with artists to collect previously off-limits revenue from touring and other promotions. They have also largely continued to resist pressure to lower their CD pricing to compete with online alternatives on volume rather than income per copy.
Nonetheless, Internet sales have quickly outpaced other legal alternatives in the US and have resulted in iTunes becoming the single largest music retailer in the country, outpacing Wal-Mart, Best Buy and other traditional leaders.