Barnes & Noble reported weaker than expected fourth-quarter projections based on weak CD sales at the chain. There have already been numerous rumblings about further decreases in shelf space for CDs at major chains like Wal-Mart and Best Buy. Virgin Megastores is closing some locations.
This, on the heels of a 15% decrease in demand for album sales at record retail as a whole in 2007 - it doesn't paint a pretty picture... although sales of physical CDs via e-commerce sites experienced a 2.4% increase. To me, that points to: A) how decreased selection at physical retail is forcing consumers to look online for titles which, until recently, could be found at major chains, and B) how the online record retail experience has just become more consumer-firendly than the physical record retail experience. If you are starved for time - and who isn't - then going online first makes a ton of sense. This development also illustrates "long tail" economics to a tee.