2018 may see the end of physical music sales.
Best Buy has decided to stop carrying CDs in its stores starting July 1.
Vinyl lovers — don’t worry. The retailer has committed to carrying vinyl for the next two years. The vinyl will now be merchandised with the turntables.
According to Billboard, Target stores may also become CD-less in the near future.
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.
It’s a new day, indeed.