According to Billboard, the No. 1 tech retailer in the U.S. has informed music suppliers that it's cutting the CD cord on July 1 after annual CD sales fell to $40 million, or 0.1 percent of total 2016 revenues. Despite their status as an antiquated medium, they still sell pretty well internationally, though sales in the US market were down 18.5% in 2017. It was once a dominant force in the sale of CDs but now its offering pales in comparison due to the lack of interest from the general public. Currently, Target must pay net 60 with unsold product returned for credit.
Digital music sales overtook physical format sales in 2015, and that trend is likely to continue.
The retailer is also pressuring movie studios to use the same system for DVD sales, and the music industry is reportedly waiting to see if DVD suppliers comply before agreeing to Target's new method. According to the report by Billboard, Target sold more than 500,000 copies of Reputation by Taylor Swift since November 2017 its release date. Most recently, Target moved half a million of Taylor Swift's Reputation, showing it can still push large titles. Even still, one major label has already turned down Target's demands, while two others are undecided, according to Billboard.
Despite the news, Target claims it's still going to be committed to entertainment software. Streaming services such as Apple Music and Spotify have caused CD sales to plummet in recent years. Apparently those numbers just aren't enough to justify the price of stock and the shelf space needed to keep CDs in stores.