Music

Best Buy Has Informed Music Companies It Will Stop Selling CDs In July

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The end of the CD format might be in sight as two major retailers are set to push for change in their relationship with the industry through the end of the year. According to Consequence of Sound, “89 million CDs were purchased in all of 2017” and paled in comparison to 800 million in 2001. The drop in popularity for the format has already caused a shift in how each store carries inventory, with Target only handling a limited selection compared to nearly 800 titles at its height according to Billboard. Best Buy, on the other hand, will get rid of CDs altogether by July 2018:

At one point, Best Buy was the most power music merchandiser in the U.S., but nowadays its a shadow of its former self, with a reduced and shoddy offering of CDs. Sources suggest that the company’s CD business is nowadays only generating about $40 million annually. While it says it’s planning to pull out CDs, Best Buy will continue to carry vinyl for the next two years, keeping a commitment it made to vendors. The vinyl will now be merchandised with the turntables, sources suggest.

Target isn’t getting rid of music on their end. Instead, they are pushing to change the payment structure for both CDs and DVDs from the movie distributors. The store has told the music companies that they want to switch to a consignment basis according to Billboard:

Currently, Target takes the inventory risk by agreeing to pay for any goods it is shipped within 60 days, and must pay to ship back unsold CDs for credit. With consignment, the inventory risk shifts back to the labels…

According to those sources, Target gave the ultimatum to both music and video suppliers in the fourth quarter of last year that it wants to switch to scanned-based trading, with a target date of Feb. 1. But while it is proceeding to push DVD vendors to switch to scan-based trading terms (i.e. the chain would pay for DVDs after they are sold or scanned while being rung up at the register), it has moved the deadline back to music suppliers to either April 1 or May 1. So far, music manufacturers are not sure what they are going to do, but sources within the various camps say that at least one major is leaning no, while the other two majors are undecided.

Billboard adds that any push back on these new deals and sale terms could “hasten” the demise of CDs. They also note that music companies are keeping a watchful eye on what happens with DVD sales before making any final decisions.

What is the last CD you purchased? And is vinyl a suitable physical format to ride into the future as an alternative to digital music?

(Via Billboard / Consequence Of Sound)

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