MrStarhead

thewriteguy

I also meant to note that this article deals specifically with floor space. With improvements in technology and inventory management, it's increasingly easier to devote less floor (and storeroom) space to physical product -- thus making room for more of a different product, offering consumers other choices -- and simply reorder and/or restock as product on the floor actually sells. Put another way, if a particular Best Buy predicts that it will sell around 100 copies of All The Right Reasons in a given week, there's no reason it has to keep 100 -- or 50, or 25 -- on the floor at all times. Some copies can be "in the back", and others can be ordered for delivery tomorrow. That's another reason why I think it's a stretch to go from "40% less floor space at the big boxes" to upwards of 20% sales decline.

But please note -- I do agree with the hypothesis that the CD sales decline we've seen in the last 12-18 months will accelerate next year. I also know that these declining sales are causing retailers to choose to devote more floor space to higher-selling, higher-margin products. I'm just not sure about the causal relationship between taking away floor space and the subsequent sales or non-sales of CDs.

Rob Murphy

scott pgwp

The main reason I say that is that at these outlets CDs and DVDs are largely treated as "loss leaders" anyway, priced low to lure *some* buyers in to spend even more money on other products. For Best Buy, certainly, and to a lesser degree for the general merchandise big boxes, some meaningful portion of those "extra" purchases are for higher-margin CD/DVD playback devices, such as portables, car stereos, home entertainment systems, etc., as well as PMPs to which the music can be ported. Something has to be available to play on/in those devices, so why not make it conveniently available for the guy who just bought a new car stereo? Having said that, I'm sure, as everyone has already predicted, the floor space devoted to pre-recorded media will decline, while the space devoted to recordable media will rise [as will the space devoted to higher-margin and/or better-selling merch]. I'm just not sure I can go as "high" as 40%, especially if you factor in the space devoted to blank media and recording devices [which the article doesn't cover].

And none of this bothers me, and it really shouldn't bother us much at all [N.B.: I would guess that the crowd that hangs out here doesn't buy too many CDs from these boxes anyway]. Most of the CD floor space at these boxes is taken up by extremely mainstream current and back catalog releases. And that's because that's what sells at these boxes. And that's also why I think dennisobell might be a little "pessimistic" with his YOY numbers. There will be less space devoted to CDs, yes, and most of what will disappear is less-mainstream, low-sales product, yes, and that means there will be less choice available for consumers at that store. But I suspect consumers looking for rarer or less-mainstream titles will know how to find them elsewhere, and Best Buy and their ilk will continue to sell lots and lots of copies of All The Right Reasons and The Dutchess.

Rob Murphy

Tenno

DavidWatts

Basically, this theory holds that the industry probably would've seen another single-digit drop this year, as it has every year since 2001 (usually it's been anywhere from 3% to 8%); but that the extra 8-10% we're getting -- the final number will likely be 14-15% by year's end -- is the Tower differential.

So, take the big boxes out of the equation after Christmas, and the delta from 2007 to 2008 could be more like 20%, all in. *(winces)*

Chris Molanphy

coolfer