Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Market Insanity

CDs are dead but Vinyl Lives

An important milestone passed without notice on July 1, 2018, because Best Buy (NYSE: BBY) stopped selling compact discs (CDs).

The electronics retailer started pulling all CDs from its shelves on July the 1st, Billboard reported. That is the death knell for CDs in North America because Best Buy is the most powerful brick and mortar music retailer in the United States.

CDs are gone from Best Buy because their sales are in total collapse. CD sales fell by 18.5% in the United States in 2017, according to Billboard.

Strangely enough the only physical music media available at Best Buy might be vinyl records, The Verge reported. Vinyl records; which are popular with affluent Baby Boomers, will now be sold with the turn tables. Best Buy plans to offer vinyl records for another two years, Billboard claims.

Where the CDs are going

Music fans that want a CD will have to go to Target (NYSE: TGT), the thrift store, or online.

Target will only carry CDs on consignment from record labels. That means recording companies will take the risks and the inventory costs. It will also limit inventory, Target’s current music inventory is only 100 titles, at one time the discounter carried up to 800 titles in a store.

Target’s move may force record labels to dump CDs because it will start shipping unsold CDs back to music companies for credit after 60 days. That will force the music industry to eat the costs.

A likely outcome of this is the only CDs left will be those from superstars with guaranteed audiences; such as Beyonce and Taylor Swift. Swift did sell over 500,000 CDs of her Redemption album. That is nothing compared to digital; where Swift sold 925,000 copies of her Reputation album in three days last year.

A Brief History of the Compact Disc

Compact discs have been around for 36 years, they first appeared in 1982. Here is a brief history of the Compact Disc.

  • The first CD player; the Sony CDP-101, was released in Japan in October 1982.


  • When they first appeared in 1982, a CD stored more data than a computer hard drive.


  • The height of the CD market was 2004 when 30 billion discs were sold worldwide.

  • CDs are one of the most popular consumer products of all time; 200 billion of them were sold between 1982 and 2007.


  • The first song recorded on a CD was Richard Strauss’s Eine Alpensinfonie (An Alpine Symphony) for a test in 1979.


  • The first known pop album recorded on a CD was the Bee Gees’ Living Eyes for a BBC program called Tomorrow’s World in 1981.


  • The first commercial recording on a CD was ABBA’s The Visitors produced on 17 August 1982.


  • The first album sold on CD was Billy Joel’s 52nd Street in Japan on October the 1st 1982 in Japan.


 Did the Dire Straights Make the CD?


  • The first CD played on the radio was the Dire Straights’ Love over Gold by Jimmy Mack on BBC Radio Scotland in 1982.


  • The Dire Straights were the first act to sell one million copies in CD with their 1985 album Brothers in Arms.


  • The first artist to have all of his songs on CD was the late great David Bowie. RCA Records released all 15 of Bowie’s studio albums and his greatest hits on CD in February 1985.


  • CD has been a godsend for classical music. The bestselling CD in 2016 was a box set of Mozart’s works, The Verge


  • By 1988 50 plants were churning out 400 million CDs a year worldwide.


  • CDs are still big business – especially in developing nations. Around $40 billion worth of CDs were sold worldwide in 2017.


The ultimate fate of the CD will rest with its cousin the DVD, because retailers often stock CDs and DVDs in the same area of the store. Music manufacturers are waiting to see if platforms like Netflix (NASDAQ: NFLX) can kill off physical videos before they pull the plug on CDs, Billboard reported.

If that is true CDs’ survival will be determined by nostalgic Generation Xers and Millennials. Since those demographics are not as sentimental as their; parents the Baby Boomers, the CD might be doomed.