In the Honestly, we don't make this stuff up department
, as retail sales of its CDs get whittled away by a la carte downloads (both legal and illegal on the Internet), Universal Music is apparently revamping the packaging
of its CDs to spruce up their sales. Included in the plan are stronger, more durable jewel cases called "super jewel boxes." This of course makes a lot of sense if you're a music label. Instead of doubling your investments in the only channel that's growing (the online channel), sink some money into the one that's about to become extinct with something environmentally friendly like heavier duty plastic. Although some music buyers see an album as an integrated work of art, CDs (and the LPs that preceded them) are typically a clever way for the record industry to sell one to three really good songs for $12-$18. At 99 cents per song, a la carte sales of music shatters that model. Currently, the online channel accounts for about 6 percent of music industry sales and it has been climbing pretty steadily at about a percentage point a year. But that doesn't tell the whole story. If you sell $100M worth of music and 90 percent of it comes from $15 CDs, that equates to 60,000 distinctly separate purchases. If 6 percent of your purchases come from 99 cent downloads, that also equates to 60,000 distinctly separate purchases. So, from a revenue point of view, the physical media channel generates more revenue. But, in terms of units sold, the music industry is at its tipping point and my sense is that once that tipping point has passed, the percentage points for the two channels are going to change a bit more rapidly as the majority of units sold will be downloads instead of physical media.