response 1 of 80:

Mar 24 01:36 UTC 2005

The state of CD sales in 2004 & 2005:

(I'm just going to dump this in off the top of my head, rather than
try to scrape up the primary sources from three months back.)

Soundscan is the point-of-sale system which measures sales to consumers.
The Soundscan figures for CD sales in 2004 were reported in January 2005.
They showed a slight increase in CD sales for the year, offering hope 
that the decline of the last several years had been stopped. There 
were some confusing ways of tallying the sales, based on whether one 
counted 2004 as having 52 or 53 sales periods, and so the increase was 
variously reported as between 1.5% - 2.5%. Let's split the difference 
and call it 2%, good enough for folk music as they say in arabella's 
family.

Looking at how the sales progressed through the years, though, the 
data didn't look so optimistic.  Sales were strong early in 2004, 
relative to year before, but in the last three months of 2004 sales 
fell behind same-week 2003 sales -- this got the industry back on 
the same treadmill of decline which had characterized the preceding
four years.    Sales had sagged enought that 2004 looked to heading
for another year of losses -- but there was a surge in the last 
weeks of Christmas shopping to salvage the year. 

A last-minute Christmas surge says to me that CDs were just easy 
last-minute presents, not things that people really coveted for 
themselves.

CD sales resumed a fairly rapid decline in early 2005; a new Billboard 
story puts the decline at 9%, relative to 2004 year-to-date.  
So sales have been back on the skids for six months.  


I've seen a news story reporting that Best Buy -- the only big box 
retailer with anything approximating a broad selection -- is planning 
to convert unspecified amounts of CD space into DVD space.

I've also seen the Liberty St. Borders sweeping out the CDs from the 
lowest tier of the new 5-tier display case, which would seem to 
indicate another stock cut of up to 20%, on top of cuts already 
made.

------

Another story on 2004 CD sales broke the sales figures down by 
types of retailers:

big box discounters                          -- up   10%
retail chains (Borders & Tower & Sam Goody?) -- down  4%
independent retailers                        -- down 10% 

response 3 of 80:

Mar 24 06:47 UTC 2005

Both Tower and Sam Goody still exist.  Tower's existence is likely 
quite precarious; last year, I think it was, the creditors took 
a majority ownership when no other buyers could be found.  
The idea is that the new ownership would 
straighten out the business problems and then there could be a 
profitable sale to a new owner.  I'm skeptical this is working;
I had a couple of trips to one of the main Tower branches in Manhattan
and the stores did not have a lot of customers in them.  

I would have to look up the exact number, but something like 
1/3 of all the Tower stores have closed.   The Detroit 
area store, the last one in Michigan, closed around the time the 
new owners took control.

Sam Goody is part of the Musicland corporation, which also owned
MediaPlay and some other brands.  Best Buy had bought 
Musicland around 2000 for something like $700 million, hoping to 
create a greater synergy of entertainment content and electronic.
In 2003, Best Buy "sold" Musicland for, essentially, zero dollars,
just to get that dog of a business off its books.  The buyer was 
Sun Capital Partners, who are reported to be specialists in 
turning around distressed companies.   

Best Buy stock rose on the news that Musicland -- an asset worth 
almost 3/4 of a billion dollars a short while earlier -- had been 
given away to another, um, sucker.

(Musicland's presence in downtown Ann Arbor was the long-running 
Discount Records store at State & Liberty, in the location which
is now Potbelly Sandwiches.)   I have no further news or personal 
experiences about Musicland's operation.