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The music industry is not a vision of health.  Global CD sales have fallen for seven straight years and debates about how to transition to a digital download world are raging; especially regarding Digital Rights Management technologies.

One of the few success stories among labels has been the Disney Music Group.  As previously reported by the LA Times, under the leadership of Disney Music Group Chairman Bob Cavallo, the one-time joke of the music industry has been on an upswing while the rest of the industry has been spiraling downward.

Disney’s Hollywood Records has found success by staying true to its roots: family entertainment and cross promotion with their other entertainment products.  Among their successes, the soundtracks for Disney Channel’s High School Musical sold 3.7m copies.  The Lizzie McGuire TV Soundtrack has sold more than 10.8m CDs since 2002. Soundtracks from the Hannah Montana series are on track to do just as well.

Based on these hits, and other family friendly music like country group Rascal Flatts, since  2002 Cavallo says "[Disney Music has] pretty much doubled our profits every year.”    Disney now has about 3.5% of CD sales.  That’s small compared to the Big 4, which combined account for near 87% of the CD market, but it’s been a profitable niche in an otherwise rough market.

This week, hoping to build on their successes and provide the kind of added value that may encourage more sales, Disney’s Hollywood Records label stepped into the technology arena.

On Wednesday, Hollywood Records announced plans to release titles using an enhanced  CDVU+ format (pronounced CD View Plus).  The format, which includes the same audio as on a normal CD, distinguishes itself by including a host of interactive features.

Enhanced or interactive CD’s are not new in concept and in the past they haven’t proved a significant factor in purchasing decisions.  Disney is hoping CDVU+ will be different.  They seem to believe the quality of the offering will make the difference; that it is about the user experience.   Each CD in the new format will include specially created content and voluminous interactive features.

The idea is similar to bonus discs offered with DVDs.  Whereas those play to film buffs with deleted scenes, director commentary and actor information, the enhanced CDVU+ CDs will include band images, links to interactive websites (including Flickr.com and possibly others), lyric information, customized video footage created exclusively for the CD and even interactive games; all aimed at the family audience.  Customers playing discs on their computers will have access to a full digital magazine format that can be accessed online or off, printed out or viewed on screen.  The discs will also replace the traditional jewel case and information booklet with eco-friendly recycled materials.

Compared to other labels, Disney’s Music Group seems to have a good read on their audience’s desires, and a willingness to try and serve to them.     Aiming to the younger crowd, it’s probably not a bad idea to try and catch them, or their parents, before they get caught up in the digital downloading craze.     

Even if the enhancements have zero impact at the point of purchase, the CD’s may still have significant value in building a more loyal relationship between musicians and audience.   It’s like at the movies: no matter how well filmed a story, if you have no interest in the lead character, if you can’t relate to them, don’t care what happens, chances are you won’t like the movie.   But if you care about that character, root for them, things change.  To that end, Tom Hanks is a star because he has the kind of presence that leaves people wishing him well and caring about what happens to the characters he portrays.  That same kind of relationship can occur with musicians and these special features may help build that affinity.  

The first CD under the new format is expected on August 7.   Other titles, aimed at family and child audiences will follow.