Best Buy to Stop CD Sales as Digital Music Takes Over
It has been four years since revenue from digital music downloads went past the bar set by music CD sales, and retailers are finally ready to give up on the old format. Best Buy is going ahead and dropping their CD catalog starting Jul. 1, and other chains are also doing away with the format in their own ways, as well.
The music CD was the predominant medium for music fans, and Best Buy was, at one point, the top merchandiser when it comes to discs. That all comes to a final end later this year, as Best Buy announced to music and media suppliers that it is pulling out the CD sections from their stores by Jul. 1, according to Billboard.
Declining sales and volume is said to be the reason for Best Buy's new policy, according to sources. With the retail chain's CD sales now just contributing around $40 million in sales every year, it's becoming less feasible to dedicate store floor space for them.
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On the other hand, Best Buy will continue to carry vinyl records and turntables, at least over the next couple of years.
Target, in the meantime, is exerting pressure on music suppliers to let the retail chain only order CDs based on demand. This new consignment deal will leave music labels with the risks of carrying the bulk of unbought CDs, as the retail chain explained in a statement to The Verge.
"The changes we're evaluating to our operating model, which shows a continued investment in our Entertainment business, reflect a broader shift in the industry and consumer behavior. We have nothing more to share at this time," a Target representative wrote in the email message.
Revenue from digital music downloads has already surpassed those from CD sales as early as 2014. In the first half of 2017, streaming services like Spotify and Apple Music has gained a majority hold of the music revenue shares in the U.S. at 62 percent.
