The Audio Compact Disc: A Business History Case

Abstract

The audio compact disc (CD) has been a common item in most households ever since its introduction in the early 1980s. A pioneer format in digital music, it captured the imagination of many at the time of its inception. In this article, I present the CD as a business history case, from being a unique innovation to its commercialization. While its introduction significantly disrupted the market for recorded music, its eventual success and acceptance underscores its immense profitability to the industry, one which was built on a business model of music rights exploitation. Meanwhile, the CD’s marketplace dominance is evidenced by data from the US and Japan. Although CDs dominated their markets throughout the 1990s, the format is now on its last legs. However, the CD, as a cultural product with nostalgia value, is likely to enjoy an extended product life cycle long after its market exit.