How to Compete with iTunes
It's almost a foregone conclusion these days that CDs are going the way of the dodo. MP3s are the rage, Apple's iTunes has enormous network effects, Amazon.com and MySpace offer convenience, etc.
So what was I doing buying the new Rancid CD, Let the Dominoes Fall, physically and through the mail? (Very good effort by the way; listening to it now.)
I discovered a few days back that I could pay $19 and get the CD a day early, a poster, a sticker, a T-shirt, and a copy of Rancid's first EP. Was it more expensive than what I would pay on iTunes? Yes. But was it still convenient, a good value, and include access to the liner notes. Absolutely. And I bit.
I saw another offer where you could pay $29 for the CD, a T-shirt, and a chance to win a signed guitar.
A universal truth
All of this is to say that it is possible to compete with these newfangled disruptive innovations, and in the music space that's particularly true if you have access to compelling value-adds that big merchants can't replicate. Further, it's nice to folks trying to compete and sell CDs rather than cry for the government to protect them or seek out public funding. The beauty of creative destruction is that it never stops, no one ever wins, and in the end the consumer benefits.
Remember that when you're driving a car you hate.