Walmart has decided yet again to shrink the stores floor space of music. This time the big box retailer is shrinking their stores music section by 40 percent. The shrinkage is a massive blow to the music industry, due to the fact that Walmart is the largest retailer of CDs in the United States. It is likely that other big box retailers will follow the lead of Walmart and continue to shrink their supply of CDs as well. In years passed we have seen other retailers shrink their music sections, like the other big box retailer Bestbuy. Even Massachusetts independently owned Newbury Comics had to shrink their music section and replace the space with DVDs, clothing and novelty items to compete with Big Box retailers.
Walmart says consumers want to buy CD’s from $5 to $7, with deep catalog CDs at the lower pricing and new releases and recent catalog at the higher pricing. Billboard estimates that Walmart sold $600 million worth of CDs in 2013. Walmart is the second-largest music account by dollar amount, with a 9 or 10 percent market share. The first largest is iTunes, which has an estimated 42 percent and has seen their own decline of music sales.
The irony of Walmart shrinking their music section is that labels have always met the demands of big box retailers. Labels have decreased pricing due to demands of retailers like Walmart and they will continue to do so. I fear that streaming services will have the same effect on the big box retailers and digital music services, like iTunes. Why must we meet pricing demands if music holds a higher price tag?
I believe the music industry must reevaluate the reasons for the declining music sales. I believe that the lack of artist development and quality of album releases is one of the reasons of declining sales. It’s inevitable with shrinking sales, there are shrinking budgets. Labels have less money to scout new talent, develop, market and promote. I won’t even get into the fact that music has become an inferior good, due to other valued consumer purchases, such as DVDs and video games. The problem isn’t the lack of music; there are more music releases now more than ever. Maybe the problem is we substituted quality for quantity.