Jan 6, 2024 - Business

CDs are making a comeback thanks to Gen Z

Illustration of a CD with a smiley face drawn on it.

Illustration: Shoshana Gordon/Axios

The humble compact disc has gone from relic to retro as Gen Z music fans look for ways to commemorate their favorite artists.

Why it matters: Though music streaming continues to dominate, younger fans are looking for multiple ways to listen and connect to artists, says Josh Friedlander, senior VP of research and economics at the Recording Industry Association of America (RIAA). Revenues from physical music formats, including CDs, recently hit a decade high.

What they're saying: "I think mostly for Gen Z it's an aesthetic thing," Donald Nde Jr., a 22-year-old based in Minnesota, told Axios.

  • Nde, who produces his own music, purchased his first CD as an ode to one of his favorite artists at the time — the late rapper and record producer MF Doom.
  • "I was like, let me just buy [the CD] just to support him, and I don't even think I even played the CD or even tried listening to it ... it's already on my phone," said Nde, who typically buys one to two CDs per month.
  • "You have to really like an artist to go out of the way to spend money on them in that form because you can easily just go turn on the song in five seconds and it's already playing," he added.

State of play: Sources in retail, manufacturing and management told Billboard that CDs are becoming popular keepsakes and "merch table mainstays."

  • For instance, Taylor Swift offers deluxe versions of her albums for purchase, and fans have flocked to the merch tables at her concerts to snag coveted physical copies.

Reality check: CDs accounted for just 3% of total U.S. recorded music revenues in 2022, down from 92% in 2002, per data from RIAA.

  • In the first half of 2023, streaming services accounted for 84% of total U.S. record music revenues and streaming remains "the most important driver for the industry," Friedlander said.
  • Though CDs are no longer the most convenient format on which to listen to your favorite band, collecting them has become a hobby for Gen Z fans, some of whom proudly display their discs among their belongings.

Zoom in: "I think that there's something very satisfying of having a neat row of only the things that you think kind of represent you," Timothy Karoff, 24, based in California, told Axios.

  • Karoff, whose CD collection began over a decade ago, said CDs offer a bit of a bonus with their art, which is part of what drives his "collector's impulse."

The big picture: "Right now, we're in an era where artists and labels are doing a really good and interesting job of having younger fans connect to even young and emerging artists with some of these classic formats," Friedlander told Axios.

  • It's not a choice of streaming or CDs for younger fans. "They may buy the CD, and then they're also streaming it when they're [on] their mobile device," Friedlander said.

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