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Classical CD distribution is a failing business - three major players shutting down

on Sat, 07/20/2013 - 09:42

It's been a bad month for classical record labels, hundreds of whom are now scrambling to see how they will continue to distribute their physical products to merchants and retailers around the world. In the shortest time, three major distributors have gone out of business, leaving artists and labels in the lurch as they try to sell their CD inventory. Which companies are closing their doors? 

  1. Codaex: The European (Codaex Group) and U.K. (Codaex U.K. Lt.) entities are in administration, affecting hundreds of labels. The Codaex blog now says "Auf Wiedersehen" (goodbye). The German blog lists 113 labels that were being distributed through Codaex.de.
  2. Qualiton Imports: Major US based distributor with labels like Farao, Accent, Supraphon, Hungaroton, Signum and Neos, Raumklang, Ars Produktion and many more.
  3. Harmonia Mundi Iberica: The branch of Harmonia Mundi that distributes to Spain and Portugal has shut down. The parent company, HM France, is reassuring the industry that they've managed to pay outstanding invoices (implying that the spread of the insolvency ends with them). 
     

Who's left, and what does it mean? For independent labels that see their role as spotting talented artists, securing the master recording, producing artwork, printing CDs, and then shipping to a distributor, the options are slim. Naxos is among the best options. But in the face of declining sales of classical CDs - a trend that is likely to accelerate as services like Spotify gain popularity - the distribution options are only going to get thinner rather than fatter. Physical distribution is consolidating more and more onto mega sites like Amazon, and all the rest is digital distribution.

For thousands of artists who were slowly recouping the investments they had sunk into making that all-important CD recording, who may have anywhere from 100 to 1000 CDs sitting in a label's fulfillment center, sending them out in a slow trickle year after year, they can now look forward to their release being taken off the market and deemed out of print. The money once invested in printing the CDs is now a business loss. Only the healthiest labels will succeed in finding new distribution. The others will close, and inevitably a large number of recordings will become unavailable, out of print, or at least hard to find (in physical form). 

One thing is clear: artists and labels who want to thrive in today's world have to master the art of selling digital copies of their recordings online.