Best Buy pushes pause on CDs
Best Buy announced over the weekend that it will no longer sell music Compact Disks (commonly referred to as CDs) in its stores starting July 1.
US CD sales dropped 18.5% in 2017, and according to USA Today, entertainment sales for Best Buy alone dropped 14%. Indeed, some experts have reported that CD sales generate just $40 million, making up a paltry 1% of the technology store’s revenue.
Interestingly, the franchise will continue to sell vinyl records in its stores. Vinyl records have been thriving in recent years; in fact, according to the Guardian, record sales hit a 25-year high and rose 53% year-over-year. Although sales are still minuscule compared to music streaming or individual song purchases, they are still thriving more than CDs.
Shareholders still seem less than thrilled about the decisions. Best Buy stock (BBY) has fallen 1.43% on Monday. However, in the past twelve months, BBY is up 24%.
This inventory decision will likely lead to a shockwave for many other retailers. Rumors of Target limiting their CD inventory have been circulating as well. As streaming services like Spotify and Apple Music continue to grow in popularity, CD sales will keep sliding.
However, don’t count CDs out forever. Just as vinyl records are making a surprising comeback, CDs also might. As new generations of people develop, they grow increasingly interested in “vintage” goods, as the world has seen with records. The same could almost certainly happen for music CDs and disc players.
Featured image via FreeStockPhotos/PetrKratochvil