Can These Women Make CDs Cool Again?

The market for CDs may be crashing, but the creators of ZinePak are doing their best to keep hope alive. A New York-based startup, the company seeks to recapture the pleasure of holding a musical object in your hand - packaging CDs with mini-magazines and merchandise. Their version of Katy Perry's "Prism" came with decals that fans can stick on their fingernails.

"We hear from people all the time on social media or in emails that this is the first time they've bought a physical album in a decade," says co-founder Kim Kaupe. She and co-founder Brittany Hodak came from advertising backgrounds and quit their jobs because they saw sales potential in reaching out to "superfans."

They know the challenge is tough. According to an April report in The New York Times, CD sales are roughly a quarter of what they were a decade ago. But by marketing exclusively through Walmart, the owners, fueled by partnerships with Perry, Taylor Swift's "Red" and Justin Bieber's "Believe," claim almost 2 million units sold, accounting for $25 million in retail sales. (Walmart declined comment.) Their package promoting the Academy of Country Music Awards helped the disc land at No. 5 on Billboard's country chart.

ZinePak has hedged its bets by diversifying into fan events, but CDs remain key. Kaupe says, "It's all about taking that subset of the overall audience and overdelivering to them."


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