New product post #3: Digipacks vs. Jewel Case - majority decision reached

I’m all for improvements in CD packaging – have been for a long time. I’ve talked about it both on this blog and during my time at the IFPI.

Indeed, in a memo to Guy Hands last year (did anyone in this industry not write a Memo For Guy?) my first recommendation was for him to take the initiative in transforming CD packaging across the piece - no more jewel cases.

Labels and music retailers should show the customer that the industry cares about its product and release all CDs in the superior digipack format (preferably using recycled materials).

After all, until we discover the value in digital music, surely the best route to monetization in the current music business, is through a better physical product?

Of course this call to action is naive, because it would cost the industry money to do this, and it isn't necessarily a cost that can be passed on to consumers. The CD is a volume product. Not only that, it is rapidly being commoditized. UK single artist CD prices have fallen by one-fifth over the past five years, from an average of £10.21 in 2003 to just £8.10 in 2008.

To reverse this trend is probably impossible. However, it's conceivable that music buyers’ perceived value of a CD album is, in this day & age, much lower than its current price. A notable shift in the quality of packaging (coupled with content extras) might be enough to hold CD prices where they are, or at least allow retailers to stem the relentless tide of discounting.

There is of course, a long list of logistical manufacturing issues to contend with. The digipack is more labour-intensive (someone has to stick the booklet on the inside card cover) and has longer lead times than jewel boxes. Demand planning is trickier, since jewel boxes are interchangeable with any CD booklet insert, whereas a digipack cover is printed specifically for that title. You need to plan carefully for how many you can sell - and who on earth can judge that accurately in this most unpredictable of businesses? In summary, it's difficult, costly and risky for any one company to move unilaterally on this issue.

Until now that is. At long last, there is a real catalyst to change CD packaging for the better. That catalyst is the environment, which music industry organization Julia’s Bicycle has articulated superbly so far.

At a recent event Hosted by Sony Music, Julie’s Bicycle took the opportunity to begin the process of aligning some key packaging goals across the whole music business. The facts are pretty compelling, as recently published in the Julie’s Bicycle report ‘Impacts & Opportunities, Reducing the Carbon Emissions of CD packaging’:

• The recording industry could reduce its packaging emissions by up to 95% by switching from the plastic jewel case to card packaging
• Consumers would prefer card packaging, particularly heavy CD buyers. More than half of those surveyed (55%) preferred the card wallet version of Coldplay’s Viva la Vida to the jewel box version
• 75% of CD buyers agreed it would be a positive step to shift to environmentally friendly packaging
• Some manufacturers are developing even more environmentally friendly versions of the digipack (the current digipack format already reduces emissions by two-thirds compared with the jewel case)

So the call to action is right there. As Tony Wadsworth put it at the event “I don’t see that there has to be a dichotomy between commercial goals and environmental goals, especially if we take a long term view”. Quite right too, especially when consumers would support packaging changes. Julie’s Bicycle has set out a roadmap for change with the ultimate goal of discontinuing the jewel case. In 2009 the major labels and Beggars Group have set a target to reduce emissions by 10%.

As for artists, ask any A&R or marketing exec, manager or indeed artist, which packaging they prefer. It’s a no brainer – artists would kiss goodbye to the jewel case in a second (probably preferring some ridiculously expensive alternative such as embroidered velvet, but hey, they care!). Beggars Group claims that nine out of ten artists request alternative packaging for their releases.

It’s about time we retired an old, much-hated, faulty product. I say product, because for some consumer goods, the product is the packaging! Packaging plays a key role in music – with CD buyers firmly attached to liner notes, artwork and tangibility. Putting music into beautiful but responsible boxes sets a great agenda in extending the lifecycle of the industry’s core product. After all, just letting the CD wither on the vine until we wait for digital revenues to materialize is a do nothing option that won't be enough in the longer term.