Best Buy to pull CDs from stores July 1, as Target considers transitioning CDs to "consignment" sales model

Tricky Kid · **Joined:** 23 Sep 2007 **Posts:** 8297

https://www.billboard.com/articles/busi ... -only-when

Quote:

Best Buy to Pull CDs, Target Threatens to Pay Labels for CDs Only When Customers Buy Them
If the majors don't play ball and give in to Target's new sale terms, it could considerably hasten the phase down of the CD format.

2/2/2018 by Ed Christman

Even though digital is on the upswing, physical is still performing relatively well on a global basis -- if not in the U.S. market, where CD sales were down 18.5 percent last year. But things are about to get worse here, if some of the noise coming out of the big-box retailers comes to fruition.

Best Buy has just told music suppliers that it will pull CDs from its stores come July 1. 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.

Meanwhile sources say that Target has demanded to music suppliers that it wants to be sold on what amounts to a consignment basis. 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.

If the majors don't play ball and give in to the new sale terms, it could considerably hasten the phase down of the CD format.

Target has greatly reduced its music presence over the years. Once upon a time carried as many as 800 music titles, and nowadays seems to carry less than 100 titles in most stores. Yet, it can still be a powerful force on big titles. For example, the chain moved over 500,000 CDs of Taylor Swift's Reputation album.

Music manufacturers suggest they are waiting to see what happens with DVDs. If the studios don't give into Target's demands, will Target pull DVDs from the store? Depending on how that plays out will likely influence what happens in music, sources suggest.

JohnG · 03 Aug 2006

Not that I've bought a CD in a Target for what seems like years now as well as BestBuy.

Linda · **Posted:** Fri Feb 02, 2018 10:55 pm

This should have little to no effect on the continued availability of compact discs, which have been slowly transitioning into niche products on specialist labels for years. We just found out that Real Gone looks to be taking over Sony Legacy's Essentials line, for example. I expect Amazon to be stocking new CDs for a long time to come.

As was discussed last year in our Sunday flyers thread, Target's contracts with the major labels for bonus tracks and exclusive releases were reported to be running out in 2018. I would guess that somebody in the company wanted to at least try to pressure the majors to subsidise what's left of Target's music departments before closing them down altogether as Best Buy will be doing.

I'd be surprised if the major labels agree to this, but maybe one of them will blink. It would be a temporary stay of execution, though. No "brick and mortar" chain can really afford to spare the floor space for physical media much longer.

Geff R. · 27 Sep 2006

Irritating, but not unexpected. Despite my tendency to download these days, I think both BB & Target are making a mistake. The market isn't dead yet.

Jay · 12 Jul 2006

David Beller · 12 Jul 2006

I can't remember the last time I bought a CD at either Best Buy or Target. I am now well beyond the age range for what they stock anyway. My number 1 shopping destination is AmazWAN and number 2 would be AmazWAN.uk. There are those occasions when I will buy direct from a label (because I have to or want to support the label), like the recent More of the Monkees Deluxe or the three or four yearly releases from Eric Records, but that's it. There is one decent CD store left in the Chicago area that I am aware of: Rolling Stone Records on the northwest side of town and I try to get there three or four times a year. I sure miss Tower Records

Geff R. · 27 Sep 2006

I think my last were both Target: Melissa Etheridge & Adele both with Target only bonus trax.

Larry · **Joined:** 10 Feb 2008 **Posts:** 5099

JohnG wrote:

Not that I've bought a CD in a Target for what seems like years now as well as BestBuy.

Same here. I don't shop at Best Buy as a matter of principle anyway and I think that the last time I bought a CD at Target was for a Norah Jones bonus CD or something a few years ago.

I buy all of my discs from Amazon and have for years.

DanO · 30 Jul 2006

Both stores have been dead to me for a long time.

Their CD stock is a joke.

NoURider · **Joined:** 21 Jul 2006 **Posts:** 3308

Linda wrote:

<SNIP> No "brick and mortar" chain can really afford to spare the floor space for physical media much longer.

I believe one could truncate Linda's final sentence of a very salient comment to:
No "brick and mortar" chain can really afford floor space

(sorry too early,no coffee)

Dr. Chris Evil · 26 Jul 2006

DanO wrote:

Both stores have been dead to me for a long time.

Their CD stock is a joke.

Same here.

Best Buy used to be one of my "go to" stores, but I buy far less movies than I used to and I don't even bother with them for CDs because they've gone from being a major section to a little dumpy part in the back of the store with just a handful of catalog and new titles. It's a joke now.

Robert Meagher · 30 Sep 2006

I can't find cassettes,reel to reel tapes, eight tracks, 78's or wax cylinders anymore.

banzaibid · 05 Aug 2007

JohnG wrote:

Not that I've bought a CD in a Target for what seems like years now as well as BestBuy.

Two words sum up my feelings...Amazon Prime!! :yahoo:

alantig · 20 Sep 2006

Yep - primarily Amazon Prime now, and my brick & mortar needs (I tried abbreviating that, but it didn't work well!) are met by a couple indies and a smaller, local chain. I've only relied on BB and Target for a handful of exclusives, and Target for really cheap deals (like the full series of What's Happenin'? for $10, although that was a Xmas gift from my mother). The last time I was in either, it was pitiful what their sections had become. But it's also partly a self-fulfilling prophecy - they're selling less because they're stocking less, but they're stocking less because they're selling less. Looking at the catalog sections, it's a lot of compilations. Great - you may build interest in an artist, but now I have to go somewhere else to get anything beyond 8 different greatest hits discs.

86mets · **Joined:** 12 Jan 2007 **Posts:** 143

Amazon and online are the go to resources for sure...I for one just like going to the B&M stores to look around and chat with the sales folk...that's what I would miss most...

Jimbo · 19 Jul 2006

I've been hitting the downtown Best Buy on Broadway once a week mostly for just a place to browse during lunch. Did buy the new Joe Perry CD there recently.

No reason to go there anymore come July.

Robert Meagher · 30 Sep 2006

Can one still order cds on line? Sometimes they still have something that Amazon no longer has and just might be out of print...for example the Easybeats box that I finally got last year.

Renny · 26 Jun 2006

the last 2 times (as recently as 2 days ago) i did not even look at the CD's in best buy.

i still remember the first time i went in there years ago..........it was awe inspiring. tons of imports at great prices, i recall buying the entire free catalog for $7.99 each on island. lots of 10cc, some great rare things, and aisles and aisles, literally, of CD's.

Galley · **Joined:** 20 Apr 2010 **Posts:** 696

Target has released numerous (hundreds?) of CD titles with exclusive content. I would hate to see that come to and end.

Geff R. · 27 Sep 2006

Galley wrote:

Target has released numerous (hundreds?) of CD titles with exclusive content. I would hate to see that come to and end.

BB used to do the same. Wallymart still does, but their advertising is poor. I rarely hear of them.

pjarrell · 01 Jan 2007

Geff R. wrote:

Galley wrote:

Target has released numerous (hundreds?) of CD titles with exclusive content. I would hate to see that come to and end.

BB used to do the same. Wallymart still does, but their advertising is poor. I rarely hear of them.

I'm not certain the Walmarts in my area stock new CDs. Their new in stock displays show CDs that came out months ago.

Jay · 12 Jul 2006

This thread inspired me to hit my local record shop, and I came across a great condition copy of Rhino's The Brit Box 4-CD set for $35. Very excited, especially since I have been on a big Oasis/Brit Pop jag of late.

Best Buy to pull CDs from stores July 1, as Target considers transitioning CDs to "consignment" sales model

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