CDs rel­e­gated to bar­gain bins

The Charlotte Observer (Sunday) - - Business - BY KAVITA KU­MAR Star Tri­bune (Min­neapo­lis)

The be­lea­guered com­pact disc, made in­creas­ingly ob­so­lete in the age of stream­ing, now has found it­self in the bar­gain bin.

Rich­field, Minn.-based Best Buy, once one of the big­ger mu­sic re­tail­ers with sev­eral aisles of CDs, now has a time cap­sule to an­other era jum­bled up in­side the $5.99 bar­gain bin. Lynyrd Skynyrd, the Who, Cat Stevens, Billy Ocean, Lionel Richie – all a nod to the ag­ing de­mo­graph­ics of those who still buy them.

“Does any­body re­mem­ber the last time they bought a CD?” Best Buy CEO Hu­bert Joly asked rhetor­i­cally ear­lier this year in con­firm­ing the re­tailer is “de-em­pha­siz­ing” the cat­e­gory.

The truth is that CDs have been in a freefall for more than a decade. In re­cent years, Best Buy’s col­lec­tion had been re­duced to a sin­gle row. Dis­plays of iTunes gift cards can be found more eas­ily and plen­ti­fully in its stores than CDs.

Best Buy is also in the process of re­mov­ing CDs al­to­gether from its web­site. It only has a hand­ful of audio sys­tems with a CD player left in stores as stream­ing takes over the mu­sic busi­ness.

“I don’t know if I’ve ever bought a CD,” said high schooler Tommy Zim­bin­ski of Prior Lake, Minn., who some­times lis­tens to his par­ents’ col­lec­tion but mostly streams mu­sic on sites such as Spo­tify and Pan­dora.

He was, how­ever, bought a hand­ful of records. In­deed, while CDs have been on the de­cline, vinyl has been on the rise, prompt­ing Best Buy to still carry LPs and Tar­get to add them in the fall.

Tar­get, too, is cut­ting back on its CD se­lec­tion. The Min­neapo­lis-based re­tailer still sells new re­leases, but in Oc­to­ber 2016 it pulled back on the num­ber of cat­a­log, or pre­vi­ously re­leased, CDs it car­ries from about 300 to 100.

Tar­get is in the midst of an ag­gres­sive push to mod­ern­ize hun­dreds of its stores. As stores are re­mod­eled, the space for CDs, espe­cially those cat­a­log ti­tles, will be fur­ther squeezed, said Joshua Thomas, a com­pany spokesman.

“Mu­sic is an im­por­tant part of our DNA,” he said. “We’re mak­ing changes that re­flect changes in the in­dus­try and the shift in con­sumer be­hav­ior.”

For ex­am­ple, at its Ni­col­let Mall store next to head­quar­ters, which was re­mod­eled last year, the mu­sic aisle now only takes up half a row in ad­di­tion to a stand-alone fix­ture. The se­lec­tion ranges from the new­est hits from the likes of Bruno Mars along­side more clas­sic ti­tles from Bob Mar­ley and Jimi Hen­drix.

Tar­get also has con­tin­ued to part­ner in re­cent years with A-list stars such as Justin Tim­ber­lake and Tay­lor Swift on sell­ing exclusive ver­sions of al­bums.

But down the road, Stephen Baker, a tech an­a­lyst with the NPD Group, sees Tar­get and other larger re­tail­ers such as Wal­mart fol­low­ing Best Buy’s lead when it comes to CDs.

CD sales slipped 6 per­cent last year while rev­enue from vinyl was up 10 per­cent. Still, vinyl sales are only about a third of CD sales over­all. While CDs seem des­tined to con­tinue to de­cline, many see them as hav­ing more last­ing power than cas­settes.

“They’re still a bil­lion­dol­lar busi­ness – that’s noth­ing to shake a stick at,” said Cara Duck­worth, spokes­woman for the Record­ing In­dus­try As­so­ci­a­tion of Amer­ica (RIAA). “There are still fans who love CDs and want to con­tinue to have that tac­tile ex­pe­ri­ence of hold­ing a phys­i­cal prod­uct and read­ing through the liner notes, the cover art, and all of that.”

CDs en­joyed a me­te­oric rise in the 90s, re­plac­ing cas­sette tapes as the pop­u­lar mu­sic mode. They peaked around 2000 with about $13.2 bil­lion in U.S. sales that year, ac­cord­ing to the RIAA. Last year, they to­taled only $1.1 bil­lion in sales, mak­ing up 12 per­cent of the mu­sic in­dus­try’s over­all rev­enue from recorded mu­sic. In con­trast, stream­ing ser­vices made up 65 per­cent and digital down­loads 15 per­cent.

Joel Anderson, 52, of Min­neapo­lis, still buys CDs but ac­knowl­edges only his desk­top com­puter can still play them. So he has half given in and down­loads them onto his smart­phone or iPod be­cause it’s eas­ier.

But there are some oc­ca­sions that still bring him to a mu­sic store, such as shop­ping for his wife’s birth­day as he did at the Elec­tric Fe­tus on a re­cent day. He picked up a cou­ple of CDs for her, not­ing that she worked at a record store in col­lege so still ap­pre­ci­ates phys­i­cal mu­sic.

“Gift­ing mu­sic is not as fun with a subscripti­on,” he said.

DREAMSTIME TNS

In re­cent years, Best Buy’s col­lec­tion of CDs has been re­duced to a sin­gle row.

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