Friday, August 7, 2009

The Death of the CD: Walmart needs a new loss leader!

More and more big businesses like Walmart and Target are scrambling to find their next big loss leader. In case you're unaware, these corporate mega-stores played a pivotal role in the demise of our beloved local record shop.

In 1982 The Music Industry declared that CD's were the ultimate audio medium and the wave of the future. Remember the hype? CD's will last forever, they're indestructible, convenient and they sound better. You better hurry up and trade-in all your vinyl before its worthless and obsolete. A lot of smaller record shops took it on the chin if they weren't prepared for this dramatic switch to CD. Only the strongest record stores survived and those that did flourished during these early years.

However, this attracted the big corporations who realized they could tap into this huge music market to improve their customer base and bottom line. They decided to price all CD's below cost, knowing most customers will also buy other items at inflated profit margins. It was a huge move and our Record Shops were just collateral damage in their eyes. Stop and think about that for a moment, while we sat and watched the 75% off sales at our favorite local mom and pop record shops. When your local Tower Records, Wherehouses and Music Plus' were filing chapter 7. These mega-stores were enjoying the taste of our fresh meat! Now as CD sales hit an all time low, the music consumer becomes obsolete in the eyes of these corporate giants. They've essentially chewed up the Music consumer and spit 'em out, they've squeezed as much out of us as possible.

So, who will be the corporate favorite at the next loss leader buffet? Me thinks, maybe the gamers and movie lovers will be on the menu, but which will be the delicacy of choice? Only time will tell.

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