Best Buy Ends CD Sales, Target Demands New Terms
CD sales fell 18.5% last year, as steaming became the dominant format for more and more U.S. consumers. But this substantial decline could accelerate as Best Buys says it will stop selling all CDs; and Target will reportedly follow suit, unless labels agree to more favorable terms.
Best Buy has told labels that it will stop selling CDs in July, Billboard reports. While a fraction of its former self, the once dominate retailer still sold $40 million CDs annually, according to sources. Best Buy has reportedly agreed to continue to sell vinyl for at least the next two years, in part because of a partnership with turntable manufacturers.
Target is also reportedly threatening to drop CDs unless labels agree to consignment-like terms – not paying for the discs until they are sold. Currently, Target must pay net 60 with unsold product returned for credit. Most Target stores carry only 100 CD titles, but it can still move hit product, reportedly selling 500,000 copies of Taylor Swift's recent "Reputation" release.
WalMart, Amazon, Downloads, Oh My…
It would seem likely that WalMart, Amazon and other retailers will demand similar favorable terms from labels.
Download sales are also feeling similar pressure with multiple labels telling Hypebot that iTunes has told them that they will stop selling music downloads sometime in 2019.