Wal-Mart: Soon Its Music Section Will Be Smaller Than An Economy-Size Bag Of Cat Litter

noah | November 4, 2008 1:30 am

Arkansas-based retail behemoth Wal-Mart is reportedly planning on cutting floor space for its stores’ CD sections again, this time in favor of devoting more real estate to Blu-Ray discs and consumer electronics. The chain is citing a 23% drop in CD sales during the first four weeks of this quarter as part of the reason for the shift, although it’s also more than happy to sew up exclusive deals with artists and blow out floor space for records and merch–like, for example, AC/DC, whose Black Ice sold 784,000 copies in its first week on shelves even though it was only available at Wal-Mart.

Greenfield said Wal-Mart’s continued exposure to music would be limited to exclusive CD releases such as AC/DC’s Black Ice & No Bull, which included a Web site and sales opportunities for related content such as DVDs, video games and gear.

“As packaged media continues to fade, Wal-Mart is focused on acquiring exclusive rights to music content, which enables it to sell multiple products to a consumer at one time; not just an $11.99 CD,” Greenfield wrote.

He said Wal-Mart’s scaled-back interest in music coupled with the potential bankruptcy of Circuit City Stores, a top music CD retailer, portends a bleak 2008 holiday season for the music industry.

Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles, concurred and said consumer demand for physical CDs would continue spiraling downward.

“The demise of specialty music stores gives you a good idea that the market is shrinking fast,” Woo said.

Especially if people can’t find any of the music they’re interested in buying! There’s a bit of chicken-and-egg causality going on here, I feel, but the economic uncertainty of the past month or so probably made CD sales nosedive even further than they might have during a normal, just kind of crappy month for the record business. Not that Blu-Ray seems like the best replacement, but I guess it’s still shiny and new (and overpriced!) enough for it to be a better gamble for the folks in Bentonville.

Report: Wal-Mart Replacing Music with Blu-ray [Home Media Magazine via Coolfer]

Tags: