In what can be considered a sign of the times, Best Buy has reportedly told music supplies that it is phasing out sales of physical CDs. Interestingly enough, the electronics chain will continue to carry vinyl records, a music medium that predates CDs but has seen a resurgence in recent years. Best Buy will merchandise vinyl with turntables, or record players if you prefer the old school term.
Besides vinyl, streaming music is where it's at these days. Spotify is the top streaming music service globally and still boasts the most paid subscribers in the United States, though Apple Music is on pace to leapfrog Spotify in the US by this summer. Between just those two streaming services alone, there are over 100 million paid subscribers around the world, each one getting their music from the cloud.
That's not to say that physical media is entirely dead. According to Billboard, physical media is "performing relatively well on a global basis." In the US, however, CD sales declined more than 18 percent last year. With Best Buy planning to pull CDs off its store shelves this July, it's likely that CDs will see another dip in sales this year, though to what extent remains to be seen. It's not just Best Buy that is souring on CDs, either.
Apparently Target wants to shift to a consignment sales model. As it stands, Target pays music suppliers within 60 days of receiving inventory, and then pays to ship back unsold CDs for credit. However, Target has told both music and video suppliers last quarter that it wants to shift the burden of inventory risk to the labels with a scan-based system. Using that method, the suppliers would get paid when CDs and DVDs are sold to customers.
Target's deadline for music suppliers to make a decision on the new sales terms is either April or May. Inside sources say that three music labels oppose the move, while two others are undecided. Depending on how things play out, music suppliers could lost both Best Buy and Target as customers
Thumbnail Image Source: Wikimedia Commons via Michael Rivera