At AllThingsD's Dive Into Mobile conference today, Troy Carter, head of entertainment management company Atom Factory and Lady Gaga's manager, noted that "CDs are still a huge business" that drive some 70 percent of an album's revenue compared to 30 percent digital — iTunes, Google Play, and so on.
"The physical CD is still the driver right now. Not just from the industry perspective, but from the fan perspective. Walmart has a pretty big CD business," he said, adding that Target had been responsible for moving over 300,000 copies of Justin Timberlake's latest album in the early days of its release.
The continued importance of physical media might come as a surprise to many: Samsung's Experience Shops are in the process of displacing CD and DVD racks in many Best Buys, and hundreds of millions of smart devices globally are capable of downloading tracks directly. That's not to say that Carter is betting on the long-term viability of media that many have long since written off — he predicts that music consumption could go completely mobile over the course of the next three to five years.
"These applications are going to cost more than the actual album to do... it'll take a while to get there."
Indeed, Carter is working with Lady Gaga on releasing an app as part of her next album, noting that it could help restore the lost experience of a vinyl release's liner notes and album art that he enjoyed as a kid. Of course, this isn't the first time the music industry has collaborated with tech luminaries to try to bring that experience back into the fold — iTunes Extras, for instance, which was met with limited success. Cost could be part of the problem. "These applications are going to cost more than the actual album to do... it'll take a while to get there."
Carter is hopeful that Lady Gaga's app — specifically, the infrastructure behind it — will help pave the way for smaller musicians to augment their albums. In the meantime, though, the Walmart shelf remains as important as ever.