The Recording Industry Association of America reports that $1.2 billion worth of CDs were sold in America in 2016 – down from a peak of $13.2 billion in 2000. Independent stores, such as the Triangle’s Schoolkids, have prospered by focusing more on vinyl records, which have made something of a comeback as specialty niche items. NEWS & OBSERVER 2002 FILE PHOTO
The Recording Industry Association of America reports that $1.2 billion worth of CDs were sold in America in 2016 – down from a peak of $13.2 billion in 2000. Independent stores, such as the Triangle’s Schoolkids, have prospered by focusing more on vinyl records, which have made something of a comeback as specialty niche items. NEWS & OBSERVER 2002 FILE PHOTO

Entertainment

With Best Buy dropping CDs, the format is down but not out

By David Menconi

dmenconi@newsobserver.com

February 09, 2018 01:14 PM

With the recent news that Best Buy is getting out of the compact disc business, the headlines have been dire: The CD, once the dominant format for music-listening, is on its last legs.

It started with a Billboard magazine report that Best Buy will drop CDs on July 1. Best Buy was once the biggest CD retailer in America, but its sales and selection have dwindled.

It’s an indication that, with online streaming services like Spotify, Google, Apple and Pandora becoming dominant, the CD business is a fraction of what it used to be. The Recording Industry Association of America reports that $1.2 billion worth of CDs were sold in America in 2016 – down from a peak of $13.2 billion in 2000.

But if you ask some of the people who sell CDs in the Triangle, mostly through smaller independent stores, it remains a relevant business that should be around a while.

Hillsborough-based Redeye Distribution handles an array of artists and labels, including Yep Roc Records (home to Mandolin Orange, Nick Lowe and Alejandro Escovedo). And it still does a healthy business with CDs. Jason Taylor, Redeye’s sales and label strategy director, said CDs still account for 25 percent of Yep Roc’s business, along with vinyl at 30 percent and digital revenue at 45 percent.

“It feels like we’ve been talking about the death of the CD for at least half as long as the format has existed,” said Taylor. “The CD marketplace ebbs and flows. There’s even been slight increases for us the last couple of years. It’s hard to imagine CDs will ever go away completely.”

This isn’t the first time Best Buy has been at the center of changes in the CD marketplace. One reason Best Buy rose to prominence was its use of cut-priced CDs as loss-leader items to drive traffic, which it started doing in the early 1990s.

“Twenty-some years ago, I remember saying about Best Buy, ‘They’re gonna run everybody out of business and then quit selling CDs,’ ” said Stephen Judge, pictured in 2012 at one of the three Schoolkids Records stores he owns in the Triangle. “And now that day has come. I’d be lying if I said it was not concerning.”
TRAVIS LONG tlong@newsobserver.com

But where Best Buy could make up those losses by selling other items, a lot of independent record stores couldn’t compete. Starting in the mid-1990s and beyond, independent stores began closing in droves.

“Twenty-some years ago, I remember saying about Best Buy, ‘They’re gonna run everybody out of business and then quit selling CDs,’ ” said Stephen Judge, owner of the three Schoolkids Records stores in the Triangle. “And now that day has come. I’d be lying if I said it was not concerning.”

Independent stores have continued closing, including Record Exchange and Offbeat Records in the Triangle. Then came Amazon and streaming, and larger chains started failing, too – including Tower Records, which went out of business in 2006.

In recent years, many independent stores like Schoolkids, Sorry State and Bull City Records prospered by focusing more on vinyl records, which have made something of a comeback as specialty niche items.

CDs are in there somewhere, too, new as well as used. One advantage of CDs is they’re durable enough to be sold repeatedly.

“People are still buying physical formats,” said Carrie Colliton, marketing director for the retail coalition Department of Record Stores. “There are genres and markets where the digital copy of something is a CD, and CD sales are still pretty strong worldwide.”

David Menconi: 919-829-4759, @NCDavidMenconi