On the whole SanDisk slotMusic venture I think it's a loser.  So much so I'm not even going to comment on it (see the whole Techmeme thread here if you're interested).  But what I did want to comment on is this quote I found on Mathew Ingram's blog...

You have to give SanDisk some credit for trying, I suppose. Just about everyone else — including the four major record labels — seems to have given up on the business of selling actual physical copies of music. Why? Because it’s a crappy business, that’s why.

Hmmmmmm...that's interesting.  I did not know Record Labels had completely given up on Physical CD sales.  Thank God I had someone who has no involvement in the music industry whatsoever to tell me that.

:)

Seriously though, What Mr. Ingram is no doubt referring to is the fact that (a) Digital Sales surpassed Physical Sales in the last year and (b) Physical CD Sales declined by 14% overall.  This is a common argument made by the so-called "Freetards" to suggest that music is going all digital which they believe to be a step towards the eventual adoption of music being entirely free. 

But here's the thing, those numbers are skewed.  Lets look at them for a second.  Here's a quote from Ars Technica on the numbers in question...

In both the US and Britain, digital sales saw nearly a 50 percent boost over the 2006 numbers. 844.2 million digital tracks were moved in the US and another 77 million in the UK. While this is good news in the face of physical CD sales that declined by 14 percent from 2006, the more significant issue at stake here is the decline of full album sales. With digital stores allowing customers to purchase just the tracks they want, record labels may have to be content with lowered revenues as people reject the high prices and fluff tracks found in all too many albums.

Sounds good but what they don't tell you is that they're talking Unit Sales.  In other words, Digital Sales mean 1 track while Physical Sales mean 1 CD.  If you look here you'll find the actual numbers for Physical CD sales in 2006 which was 703.9 Million Albums.  Using the Ars Technica numbers above (of a 14% decline) that puts the 2007 number at about 605.3 Million Albums in the U.S (you'll hear 511 Million but that number doesn't seem to cover the deep catalog sales). 

Now, assuming 12 tracks per Physical CD that means 7,263 Million Physical Tracks were sold vs 844.2 Million Digital Tracks.  That's close to 9 times as many Physical tracks being sold.

Now, for the record I do think Physical CD sales and album sales as a whole are due for even more drops in the future.  Music companies have gotten away with "padding" CDs with lackluster tracks for a while now and the digital market is now taking that ability away.  Obviously there will be fall out. 

But to suggest that CD sales are so bad that the labels have "given up" on them is just comical.  That, along with the Ars Technica numbers above, show just how far people are willing to entrench themselves into an obviously false version of the world in order to justify believing what they want (as opposed to what is true).