Report: Wal-Mart Replacing Music with Blu-ray

[Towergrove]

“We believe Wal-Mart is increasing its exposure to consumer electronics, video games and Blu-ray, and reducing floor space devoted to CDs and standard DVDs,” said Richard Greenfield, analyst with Pali Capital, in a note.

http://homemediamagazine.com/high-de...-blu-ray-13819

[ThatArtGuy]

Original link: http://homemediamagazine.com/high-de...-blu-ray-13819


By Erik Gruenwedel | Posted: 03 Nov 2008
egruenwedel@questex.com

Wal-Mart Stores is rapidly downsizing shelf space for music CDs while increasing availability of Blu-ray and consumer electronics in select locations, according to a new report.

The Bentonville, Ark.-based retail behemoth, citing a 23% drop in CD sales during the first four weeks of the fourth quarter, continues to scale back inventories of music packaged media; supplanting it with electronics and movies.

“We believe Wal-Mart is increasing its exposure to consumer electronics, video games and Blu-ray, and reducing floor space devoted to CDs and standard DVDs,” said Richard Greenfield, analyst with Pali Capital, in a note.

Greenfield said the chain’s floor space devoted to DVD, including Blu- ray, ranged from up modestly to down slightly.

Pali reported that an accelerated rate of sales decline for CDs combined with the slowing of digital unit sales had resulted in Q4 total unit sales declining 11.6%, compared to a 11.3% decline during the previous year period.

Total music sales fell 5% to 7% in the first three quarters of 2008.

In an analyst meeting last week, John Fleming, chief marketing officer with Wal-Mart, said electronics would be getting space expansion in stores due to the decline in physical packaged media.

“In electronics, where all the digital products are getting space expansions, and some of the physical packaged media, CDs, movies, are coming down dramatically so that we can space the growth categories,” Fleming said.

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.

[Marquoz]

Awesome! My Wal-mart has a horrid selection of Blu's right now. They have one 5 ft section with maybe 20 movies, a 5 ft section with like 4 players, and then another 5 ft section with about 20 other movies. I'm all for expanding out into the music section!

[Blu Titan]

A great move by WM...

[Mr. Spiffy-Pants]

But... But... Blu-ray was doomed! Digital downloads of fake-HD shows and movies was the future! This does not compute!!

[JimShaw]

Originally Posted by Mr. Spiffy-Pants

But... But... Blu-ray was doomed! Digital downloads of fake-HD shows and movies was the future! This does not compute!!

Yes, I agree. How can this possibly be?

[FinalEvangelion]

Originally Posted by Mr. Spiffy-Pants

But... But... Blu-ray was doomed! Digital downloads of fake-HD shows and movies was the future! This does not compute!!

LOL. It is interesting to see that all the big guys that matter (Movie studios, Netflix, WM) are seeing a bright future for the BD format, while some "journalists" are seeing a terrible future.

I think the timing of the FUD articles last week was deliberate because the "journalists" know that we are crossing the point of no return where it will be very difficult for BD to fail. While it is still unknown if BD will do to DVD what DVD did to VHS, it's definitely clear that BD is no LD or D-VHS.

So yeah, journalists are trying to have their last attempt to steer people away from BD, while downloads continue to be largely vaporware.

[Barbie-Shrimp]

Originally Posted by JimShaw

Yes, I agree. How can this possibly be?

I know, I can't wait to get The Dark Knight on HD-DVD!!!

[Clark Kent]

A great day for Blu-ray but I am a little worried about the decline of cd sales. Wal-Mart has the best inventory tracking system of any store and that means they see no future in cd sales.

[Firestreak]

I like CDs, and only use Itunes for hard to finds and singles. So this is kind of a bummer for me, tho I can't really ***** as I've only bought like 2 CDs this year.

[Blu-Ron]

People still buy CD's?

[fighthefutureofhd]

coming from the most political person on this board. anyway, i couldn't be smiling at all. this is awful news. sure, i love blu-ray and want to see it succeed. but i don't want to see it succeed at the cost of music and cd's. that's just not right. besides, it makes no sense that wal-mart is doing this since they just signed an exclusive deal to sell ac/dc's new record.

[owa]

Wow, another positive article for blu-ray. Nice to see for a change and an interesting move by Walmart. Expanding the blu-ray section is great but in general, I agree with the sentiment expressed earlier, the reason for it and the direction they're going concerns me a little.

[Bobby Henderson]

There is one critical issue people may be overlooking regarding the poor sales of music CDs at Wal-Mart: the store typically sells "edited" versions of popular music discs. I usually don't buy music CDs at Wal-Mart for precisely that reason.

The declining quality, or rather lack of any really new, fresh ideas in terms of popular music, is another culprit in overall falling music sales. A handful of giant media companies have a very tight control on what kinds of music are published anymore. And they want the general public eating the same vanilla flavor of music they've been spooning out since 1990 -the last time we had any sort of healthy house-cleaning of music styles in that industry. For nearly the past 20 years it's just been a lot of the same old shit.

The music industry is at its best when there is tumultuous change happening in styles and ideas for music. Those changes can often make or break recording labels. Media corporations HATE change. They want to be able to control and predict what consumers will like and buy. Unfortunately you can't really do that with any sort of creative endeavor. And when you do you end up selling blah-quality crap in the end. That's where the music industry is right now.

[caliminius]

I guess most readers here will see what is generally the positive for Blu-Ray, but all I can see in the article is negative for music. Maybe some people have switched to purchasing all their music by digital download, but I still buy CD's any chance I can. Nearly 100% of my music download purchases are Amazon's discount album of the day. It's hard to pass up a good (or even just interesting) album when it's $1.99-2.99.

I wouldn't mind the death of CD's if it was being replace by a superior product, but it's not. It's being replaced by inferior AAC and mp3 tracks.

But it's funny when I hear record labels b*tch and moan about iTunes control over music distribution, but then I go look at upcoming albums and what do I see? Many of them have tracks that available exclusively through iTunes whether it be preorder exclusives or ones still available after the album releases. Don't the studios realize if they want to break iTunes control they should put exclusive tracks on the CD or give them to Amazon or Best Buy or anybody but iTunes?

[DetroitSportsFan]

Originally Posted by Bobby Henderson

The declining quality, or rather lack of any really new, fresh ideas in terms of popular music, is another culprit in overall falling music sales. A handful of giant media companies have a very tight control on what kinds of music are published anymore. And they want the general public eating the same vanilla flavor of music they've been spooning out since 1990 -the last time we had any sort of healthy house-cleaning of music styles in that industry. For nearly the past 20 years it's just been a lot of the same old shit.

The music industry is at its best when there is tumultuous change happening in styles and ideas for music. Those changes can often make or break recording labels. Media corporations HATE change. They want to be able to control and predict what consumers will like and buy. Unfortunately you can't really do that with any sort of creative endeavor. And when you do you end up selling blah-quality crap in the end. That's where the music industry is right now.

I agree. The overall low quality of today's new music is a big reason why CDs aren't selling. And like with movies, the new releases move more copies than most catalog titles.

[BoneWSO]

I don't want to see CDs go away, but eventually they will, I just hope we start getting WAV downloads sooner than later 'cause I will not download crap mp3s from iTunes.

[Galley]

Originally Posted by Blu-Ron

People still buy CD's?

Yes. I buy craploads of them.

[fighthefutureofhd]

Originally Posted by DetroitSportsFan

I agree. The overall low quality of today's new music is a big reason why CDs aren't selling. And like with movies, the new releases move more copies than most catalog titles.

i think that statement is a bit misleading. today's new music is just as good as it was back in the mid 80's to early 90's. the distinction here that should've been made is that today's new top 40/radio played music is of very low quality. it's a distinction that needs to be made because there are a number of great albums that came out this year that were in the top 40 of the billboard 200. here's a short list:


r.e.m. - accelerate
the b-52's - funplex
death cab for cuite - narrow stairs
coldplay - viva la vida or death and all his friends
kings of leon - only by the night
the raconteurs - consolers of the lonely
sigur ros - with buzzing in our ears we play endlessly (ehglish translation [i sucked your brain out])
emmylou harris - all i intended to be


i think that the current crop of music being played on radio and top 40 stations as well as places like vh1 does indeed suck. but that's not to say that the overall quality of today's music is low. that's not true at all. sorry for the derailment. just wanted to defend the great music that has come out this year.

[LORDs_angellos]

Great news! This works very well. Blu-ray > CDs.

I do get my fair share of CDs, but always form Amazon. The music here in Puerto Rico is all stuff I don't care for one bit. Its amazing, the one-genre-only CD racks you see in stores....