CD sales overall in the U.S. were down 18.5% past year, and it only made up $40 million of Best Buy's yearly revenue, so it's not a great surprise that they've made the move.
While Best Buy will stop selling CDs in five months, the Minnesota-based retailers will continue to carry vinyl for the next two years, keeping a commitment it made to vendors. Billboard reports CD sales only amount for about $40 million annually throughout the entire company, a paltry sum compared to what the chain used to make.
Now its system relies on taking inventory risk by paying for the CDs it gets within 60 days. Target may also join the anti-CD movement. The vinyl will be merchandised with the turntables, sources state.
Target also gave the same demands to DVD suppliers, where it would only pay after the DVDs are sold. Target is asking music suppliers to be compensated per CD sales instead of buying in bulk. So with Best Buy phasing out CDs in 2018, how much longer will we see Blu-rays in-store? Most recently, Target moved half a million of Taylor Swift's Reputation, showing it can still push large titles. One music manufacturer is leaning towards saying no to this deal, according to Billboard.
"Streaming is the fastest growing source of music and video content and particularly with younger consumers, who we've found time and time again prefer streaming and subscription services over traditional forms like CDs", Ford marketing manager Michael O'Brien told Glinton. Apparently those numbers just aren't enough to justify the price of stock and the shelf space needed to keep CDs in stores.
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