Walmart Signals the Death of CDs/DVDs, Looks to the Present and Future

Greetings Readers!

For the past month, maybe more, the local Wal-Marts have been undergoing a major shift.  Nearly everything but groceries have changed their location.  There are now more groceries, less pet supplies, and the electronics department has roughly doubled in size.  Apparently this shift is taking place across the country.  A post on Gizmodo today revealed a change in business at Wal-Mart when it comes to consumer electronics.  It seems they are cutting back on CDs and DVDs to focus on other products such as Blu-ray.

With CD sales down, digital downloads through the roof, and Blu-ray hoping to replace DVD, such a move was destined to happen at some point, I was just starting to wonder when.  With digital downloads exceeding many peoples expectations, it is a matter of time before the CD becomes just another dead physical format.  With stores such as Walmart, Circuit City, Best Buy and others still promoting the latest music in CD format, I had honestly started to wonder just when digital downloads would kill the CD.  I have known for some time that it was coming but haven’t seen any sites of a death anytime soon, until today.

With CD sales down 23% just this quarter for Walmart, it is no surprise that they have now started to take away floor space from the CD and even the DVD to give more room for video games, various consumer electronics such as the iPod and Zune as well as Blu-ray.  Such a move is a sign of the times and that death for the CD and DVD formats is nearing.  I expect to see other major retailers follow suit in the near future.  I will admit that with DVD sales still much higher than Blu-ray sales, I was kind of surprised to see this move at this time.  I have long believed that this is necessary for the mass adoption of Blu-ray.  When stores stop selling DVDs, people will start moving over to Blu-ray, just like they did for the transition from VHS to DVD.  Blu-ray certainly has other issues that it needs to conquer before it can truly take the place of DVD, but this is the first step in the right direction.

While I agree with Walmart in their move to replace CD floor space with portable media players, that isn’t really going to help them gain market share in the digital download space such much as it does iTunes and the Zune Marketplace.  If they expect to see real success from this, they need to bundle a deal from their new digital download store with the devices.  Walmart must give people an incentive to buy music from them before the customer becomes addicted to iTunes or other download service.  If they did this, they would see huge growth in their new MP3 store while slowing the growth of their competition.

This is a clear sign that these formats are soon going to go the way of the formats that came before them.  While the CD and DVD still have some life in them, if other stores follow suit and this falling sales trend continues, I can easily see the death of the CD within the next 2 years, and the death of the DVD within the next 5 (likely less).

Long live the extremely expensive Blu-ray!