News — September 22, 2016 at 11:29 am

The digital revolution is here: Warner Music Singapore will no longer distribute CDs


On the back of dwindling CD sales and growth in streaming and online channels, the Singaporean branch of Warner Music will no longer be bringing in CDs for sale and distribution across the country.



Whilst Warner have declined to comment, industry insiders in the local music trade – retailers and other labels – have confirmed the rumours. In the last year, the label released albums by Ed Sheeran, Stevie Nicks and Jolin Tsai according to its website and Singaporean musicians signed to it include hip-hop duo SleeQ and Reuby.


While the Universal and Sony continue to bring in CDs, it is understood that Sony no longer handles the storage and distribution of these CDs to shops in the country – choosing instead to engage another company for those functions.


A veteran in the music industry, who declined to be named, said Warner’s decision was made in July, with other retailers confirming the move, and saying it is likely due to falling CD sales worldwide. A spokesman for HMV Singapore says it was notified of Warner’s move a couple of weeks ago, and of Sony’s move last year. “We will need to make slight changes by importing the CDs in the case of Warner” said the spokesman. “For Sony, we can still get them locally supplied by MM2 (the company engaged by Sony). But some titles may be late, or on a rare occasion, not released.”


Mr Ho Chan Sian, 60, owner of Memphis Music, a CD shop in Coleman Street, was made aware of Warner’s decision two weeks ago. He says: “It will be more inconvenient for us because we will not be able to draw stocks from Warner like before. We will have to turn to wholesalers to get CDs of artists under the Warner label.”


The decline of physical CDs has been coming for some time, with consumers moving towards digital distribution either through streaming or online purchasing of songs. Consumers in the United States, the world’s largest music market, bought 257 million albums last year which represented a drop of 11 per cent from 2013. At Universal, sales of physical CDs in Singapore for the first half of this year have fallen 8 to 9 per cent compared to the first half of last year.


“The market has evolved from physical sales towards digital distribution” says Ms Kim Lim, the head of marketing and sales for Malaysia and Singapore at Universal Music. “Digital is more affordable and easier to access. The consumer can also get it more quickly, instead of having to wait for CD stock to be ready in stores.”


“There are also very few stores nowadays as retail store rents are increasing year by year,” says Mr Ngiam Kwang Hwa, 55, managing director of record label and concert organiser Rock Records: “I can totally understand Warner’s position. To bring in a CD, you have to pay for freight, GST, the warehouse to store the CDs, as well as distribution cost. If the sales volume is not high enough, it actually doesn’t make financial sense to do so.”


Ms Lim says: “We still believe some albums – that have nice packaging, exclusive content and limited edition packaging – are collectible items.”


But Mr Ngiam expresses concern that Warner’s move is the beginning of an unhealthy outlook for the industry. “My worry is that another one of the big labels will also stop bringing in CDs. Then the distribution system might change, and we might be forced to react,” he says.


Source: Asia One