CD sales are making an unexpected comeback amid a retro tech boom

RIAA data shows a sharp rebound in physical music: CD revenue rose 58.6% to $171.1M in 1H 2026 (vs. ~$107.9M in 1H 2025) alongside a 45.7% jump in units to 17.5M. This improves from 2025’s decline where full-year CD revenue fell 7.8% to $312.4M and units dropped 11.6% to 29.5M (note: RIAA changed revenue calculation methodology in 2025, but unit sales remain comparable). Physical media revenue in 1H 2026 increased 25.9% to $731.5M, driven by 17.7% vinyl growth plus the CD surge.

Analysis

This is mostly a channel-mix story, not a broad demand shock. The incremental dollars are flowing to secondary markets and low-capex nostalgia businesses, which favors eBay more than any primary-content name because the monetization sits in transaction volume, not product creation. Ooma gets a softer read-through from the anti-smartphone / landline nostalgia angle, but that is a narrower behavioral trend and likely slower to show up in paid subscriber metrics.

The second-order effect is that used inventory and hand-me-down supply blunt the economics for primary sellers while concentrating value in marketplaces, thrift arbitrage, and resale logistics. For Spotify, the impact is more narrative than financial: physical media can coexist with streaming, and the amount of spend involved is too small to move the core subscription model. The more important signal is whether this is a one-season identity trade or a durable purchasing habit.

Contrarian view: the market may be over-extrapolating from a culturally loud but economically small category. Collector behavior often peaks when it becomes a status marker, then normalizes after holiday/gifting cycles. If eBay doesn’t show a measurable lift in collectibles/used-electronics GMV, or if Ooma net adds do not improve in the next 1-2 quarters, this should be treated as a fad rather than a secular re-rating.

Key Decisions for Investors

• Long EBAY on pullbacks via a 2-3 month call spread; best listed proxy for secondary-market demand with limited downside and upside if collectible/used-media turnover accelerates.
• Small tactical long OOMA only if the next earnings commentary confirms conversion from interest to paid subscribers; otherwise keep it on the watchlist, not the book.
• Do not short SPOT on this headline; the physical-media trend is too small to impair the core model. If anything, use SPOT strength as a source of volatility premium only if management later signals a real engagement substitution.
• Pair idea: long EBAY / short a broad discretionary retail ETF (XRT) for a cleaner expression of resale-channel share gain versus generic consumer spending.