Published on: November 22, 2019
Compact disc (CD) is a digital optical disc that can be used as a data storage medium to record and play audios, videos, and other types of data in a digital format. Co-developed by Philips and Sony, CDs were originally designed to store and play sound recordings but were later used for data storage. The different formats of CDs include write-once audio and data storage (CD-R), rewritable media (CD-RW), Video Compact Disc (VCD), Super Video Compact Disc (SVCD), Photo CD, Picture CD, Compact Disc-Interactive (CD-i), and Enhanced Music CD.
We have categorized the global compact disc market as a part of the overall technology hardware, storage, and peripherals market, which covers companies that manufacture cellular phones, personal computers, servers, and electronic computer components and peripherals. According to our analysis, the global compact disc market is expected to decline, which is attributable to factors such as the growing popularity of digital gaming and music streaming services.
We have identified the following segments for the global compact disc market:
Various underlying factors will drive or impede the growth of the global compact disc market during the forecast period. We have identified the following growth drivers for the market:
Although digital music streaming has become increasingly popular globally, there is demand for music CDs as they are not interrupted by online advertisements, algorithms, and data privacy concerns. Further, a considerable section of the population of music enthusiasts prefer to own their music and convert it into different formats to play it on different devices. There is also an increasing trend of hobbyists collecting rare music and artwork. The global compact disc market will also be driven by the demand from independent artists looking to offer tangible products to their audiences, as CDs are cheaper to produce as well as priced lower than other physical mediums such as vinyl. These factors will contribute to the demand for CDs and drive the growth of the global compact disc market during the forecast period.
CDs are a secure medium for long-term storage and sharing of audio, video, and other content like software, music, and short movies. As most people worldwide continue to rely on CDs for their content storage needs, the demand for CDs will continue to grow in near future. CDs are also increasingly used for software reproduction in the IT industry and in the physical gaming market. Additionally, government agencies worldwide rely on optical storage mediums such as CDs to securely record and store sensitive information in digital format.
As the per capita disposable income worldwide is expected to grow, consumers are likely to allocate more money to procure Blu-ray discs, music CDs, and DVDs. Thus, increasing per capita income worldwide presents a potential opportunity for vendors of recordable media such as CDs. The market is also witnessing demand from emerging regions such as Asia Pacific where physical sales are still a considerable share of the total music sales. The demand from these regions in addition to higher disposable incomes towards owning music will drive the market during the forecast period.
Meanwhile, the vendors operating in the global compact disc market face numerous challenges in increasing their sales and improving profitability. The following are some of those challenges:
The rising popularity of digital distribution model for music has resulted in a significant decline in physical music sales. In 2018, It is estimated that physical music sales have dropped by more than 60 percent since 2001. The rising penetration of smartphones and declining data prices have led to the widespread adoption of music streaming services over the past five years. According to the Recording Industry Association of America (RIAA), physical sales in the US have been declining since the past five years and physical sales including CDs, Vinyl, and DVDs accounted for just 12% of the total US music industry revenues in 2018. Thus, the growing consumer preference for music streaming services is expected to slow down the sales of music CDs, thereby impeding the growth of the global CD market during the forecast period.
The growing demand for vinyl records of late is attributable to their aesthetic appeal and the nostalgia associated with analog recordings. This demand has led to major musicians and artists to launch vinyl versions of their records. The vinyl market has had a revival in terms of sales growth over the past five years. The year-over-year increase in sales of new vinyl records was estimated to be 18.7% and 8% between 2016 and 2017 and 2017 and 2018. According to our analysis, the sales figures of vinyl records will surpass CD sales during the forecast period. All these factors have the potential to impede the growth of the global compact disc market.
The availability of alternative data storage options such as external hard drives, USB drives, and the advent of cloud storage will act as major threats for the global CDs market. External hard drives can store vast amounts of data and are relatively cheaper alternatives for CDs. Also, cloud storage services such as Dropbox, Google Drive, and iCloud have emerged as convenient options for data backup, sharing, and storage. Further, majority of the cloud storage providers are offering free services up until certain data limits. This could lead to less reliance on CDs for storage, thereby negatively impacting the global compact disc market during the forecast period.
We have identified the following trends in the global compact disc market:
The advances in CD technology have made releasing music albums cheaper for artists and music bands. Several independent musicians and music bands include music CDs in their tour merchandise and sell them online as well. Also, there has been a considerable increase in demand for CD versions of the recent hit music titles like Lady Gaga and Bradley Cooper's A Star Is Born soundtrack and Greta Van Fleet's Anthem of the Peaceful Army.
Several major audio brands are launching CD players equipped with advanced features such as integrated amplifier and microprocessor, upgraded hi-fi system, digital connectivity, and analog mode to provide extra clarity while listening to music. The growing consumer demand for audiophile quality and other advanced options will trigger the launch of new CD players, which will accelerate the demand for CDs as well.
Several advances in optical disc technology are being made with a focus on developing cost-efficient and sustainable long-term data storage solutions. For instance, researchers at the RMIT University, Australia and Wuhan Institute of Technology, China have developed a technology based on gold nanomaterials to demonstrate a high-capacity optical disc.
Our reports encompass a holistic analysis of the market, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis. In the global compact disc market report, we have provided a detailed analysis of around 25 vendors, including several prominent players such as Mitsubishi Chemical Corp., Sony DADC Europe Limited, RITEK CORPORATION, Fujifilm Holdings Corporation, and BenQ.
The following are some of the key developments mentioned in our global compact disc market report:
Backed with competitive intelligence and benchmarking, our research on the global compact disc market is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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