As if the news from Wall Street, Detroit, and Starbucks was not bad enough, DigitalMusicNews.com is reporting that CD sales have now fallen to less than half the number of CDs sold in their peak year, 2000. In 2008, CD sales were down 54.6 percent from 2000, or a giant 514.6 million units less.
Soundscan counted over a billion "a la carte" downloads last year from digital services like iTunes and Amazon.com. Now a billion singles sounds like a lot, but it is not even close to making up the revenue lost from a half-billion fewer CD's sold.
Like Detroit, the major labels have no one to blame but themselves. It has been known for a long time that CD sales were in freefall and that strong action was needed. And also like in Detroit, the current economic downfall might be the straw that broke the camel's back. The meltdown (if that word is even strong enough) of the credit market is not the problem for Detroit, but it made the longtime problems suddenly unworkable.
Likewise with the labels. The record companies dealt with the Internet about as well as Hummer dealt with fuel efficiency. The lack of available credit combined with huge loses at the media conglomerates that own the major labels could spell doom for them. And unlike Detroit, I don't think their will be any bailout money from Washington.