[Slowhand] Disney tries to save the CD

[Scott Wallenberg]

Disney tries to save the CD
http://mediabiz.blogs.cnnmoney.com/index.html
The once mighty compact disc is slowly but surely on its way toward joining 
the cassette, 8-track and vinyl LP on top of the music format scrap heap. 
But Walt Disney (DIS) introduced a new version of the CD in New York 
Wednesday that it hopes will convince more fans to keep buying multitrack 
discs (what we used to call "albums") instead of just downloading singles 
from the Internet.

Disney's Hollywood Records label unveiled what it is calling CDVU+, 
pronounced CD view plus, at the Samsung Experience store at New York's Time 
Warner Center, which just so happens to be where Time Warner's (TWX) 
CNNMoney.com offices are located. Disney said that its pop-punk trio, the 
Jonas Brothers, will be the first act to release an album in this format. 
The self-titled CD will be released on August 7.

So what makes the CDVU+ special? The CD will launch a digital magazine that 
features loads of exclusive content. Disney worked with Zinio, a company 
that helps magazine and book publishers deliver content online, to launch 
this service. The CDVU+ will also allow Jonas Brothers fans to check out 
videos and photos, get song lyrics and create posters.

It's an intriguing concept since it's obvious that consumers need added 
incentive to actually schlep to a store to buy a CD or order it online from 
a place like Amazon.com (AMZN) and then wait for it to be mailed to them. In 
this day and age, more and more music fans are accustomed to instantly 
getting music by downloading it, whether illegally for free from music 
sharing sites or from legal online music stores.

"While the CD is still the primary means by which people consume music, it 
is also true that music fans are increasingly turning to the Internet to 
connect, research and consume music," said Hollywood Records general manager 
Abbey Konowitch in a statement. "To address the changing consumer 
expectations, we've created a recognizable physical product that also serves 
as a key to unlock content that is exclusive, interactive, tailored to the 
band's fans, and updatable."

But it's debatable if the CDVU+ will really help stem the decline in 
physical music sales that is plaguing the music industry. According to 
Nielsen SoundScan, total album sales plunged 15 percent in the first half of 
2007, led by a 19 percent decline in CD sales.

For one, many musicians and labels already offer access to online content 
and other extras through existing CDs. What's more, people who buy albums 
from places like Apple's (AAPL) iTunes often wind up receiving downloads of 
digital booklets with their albums as well as added content such as 
exclusive non-album tracks and music videos.

And at Fortune magazine's iMeme technology conference last week in San 
Francisco, a panel of digital music experts, including the keyboardist of 
the Talking Heads, the CEO of RealNetworks (RNWK) and an executive from 
major label EMI Group (EMIPY) all agreed that the digital music trend is not 
going away. Music companies have to adapt to the digital world and trying to 
keep the CD afloat may not cut it.

Still, it's a novel attempt by Disney. And if any record label can 
successfully benefit from enhanced CDs, Disney might be the best-positioned 
to do so since much of the acts on the Hollywood Records label are geared to 
younger, incredibly passionate audiences who can't seem to get enough 
information about their favorite musicians, be that Hilary Duff, Miley 
Cyrus - aka Hannah Montana - and Jesse McCartney.

There was a fairly large crowd of mostly young girls waiting for the Jonas 
Brothers to arrive at the Time Warner Center Wednesday. And these fans 
braved a pretty intense thunderstorm earlier in the day. So something tells 
me that this demographic may be more than willing to keep buying CDs if the 
discs promise all the extra bells and whistles they can't get from a digital 
download.

But don't expect CDVU+ to have a major impact on the rest of the struggling 
industry.



Scott