Target to discontinue physical media?

[BatteryMill]

Just a rumor, but it seems we have yet another major player inching towards leaving physical media behind, and at the end of the year.

https://twitter.com/PhysicalMedia_/stat ... 3243164136

Have the likes of Netflix, Apple Music, Xbox/Playstation stores finally been able to supplant DVDs, CDs, and physical video games in entirety? Now onwards to the all-digital future we go...

[mbz321]

Have the likes of Netflix, Apple Music, Xbox/Playstation stores finally been able to supplant DVDs, CDs, and physical video games in entirety?

For all intents and purposes, yes. If Best Buy couldn't hang onto physical media, why would Target be any different? CD's? What are those? Movies? I probably only own a small pile of physical movies anyway and honestly can't remember when I touched them last. I think Netflix ending its DVD by Mail services last September was the final nail in the coffin. Video games have pretty much all become digital these days...and I suspect the next generation of consoles won't even have the option of a physical drive.

I could see Target hanging on to books, records, and limited/popular releases, but surely the floor space could be freed up for a much better use.

[ClownLoach]

Have the likes of Netflix, Apple Music, Xbox/Playstation stores finally been able to supplant DVDs, CDs, and physical video games in entirety?

For all intents and purposes, yes. If Best Buy couldn't hang onto physical media, why would Target be any different? CD's? What are those? Movies? I probably only own a small pile of physical movies anyway and honestly can't remember when I touched them last. I think Netflix ending its DVD by Mail services last September was the final nail in the coffin. Video games have pretty much all become digital these days...and I suspect the next generation of consoles won't even have the option of a physical drive.

I could see Target hanging on to books, records, and limited/popular releases, but surely the floor space could be freed up for a much better use.

Friendly reminder to all, the last remaining distributor of catalog physical CD/DVD media was acquired several years ago by Walmart. So anything that isn't a brand new release in wholesale vendor cases has to be bought from... Walmart. As such all of these outcomes are predetermined. Obviously Walmart wanted a competitive advantage, not to become a supplier to their competitors.

However the record labels make deals.

This story is very suspicious as Taylor Swift has supposedly signed a long contract with Target for future exclusive releases.

Having said that, I am not sure why anyone is surprised because Target has removed their catalog of CD and DVD media from all stores in remodels for the last 5+ years. They only leave the same thing as Best Buy did, a small endcap of DVD/Blu-ray new releases and a small endcap of CD releases. But they also reduce books and expand LP records along with video games and related collectibles.

This seems like a non story where someone went to the only Target they shop, saw it was remodeled and went "Oh My Goodness, where did the music and movies go?!! This must be a story!" While at least half or more of Targets fleet already did the removal years ago.

And nobody is eliminating games, those aren't distributed by the Walmart owned mass distributor.

Target has been expanding games in their electronics remodels as they reduce space dedicated to cellular phones, printers, laptops and computer accessories. Games are a strong business for Target.

[BatteryMill]

Have the likes of Netflix, Apple Music, Xbox/Playstation stores finally been able to supplant DVDs, CDs, and physical video games in entirety?

For all intents and purposes, yes. If Best Buy couldn't hang onto physical media, why would Target be any different? CD's? What are those? Movies? I probably only own a small pile of physical movies anyway and honestly can't remember when I touched them last. I think Netflix ending its DVD by Mail services last September was the final nail in the coffin. Video games have pretty much all become digital these days...and I suspect the next generation of consoles won't even have the option of a physical drive.

I could see Target hanging on to books, records, and limited/popular releases, but surely the floor space could be freed up for a much better use.

Friendly reminder to all, the last remaining distributor of catalog physical CD/DVD media was acquired several years ago by Walmart. So anything that isn't a brand new release in wholesale vendor cases has to be bought from... Walmart. As such all of these outcomes are predetermined. Obviously Walmart wanted a competitive advantage, not to become a supplier to their competitors.

However the record labels make deals.

This story is very suspicious as Taylor Swift has supposedly signed a long contract with Target for future exclusive releases.

Having said that, I am not sure why anyone is surprised because Target has removed their catalog of CD and DVD media from all stores in remodels for the last 5+ years. They only leave the same thing as Best Buy did, a small endcap of DVD/Blu-ray new releases and a small endcap of CD releases. But they also reduce books and expand LP records along with video games and related collectibles.

This seems like a non story where someone went to the only Target they shop, saw it was remodeled and went "Oh My Goodness, where did the music and movies go?!! This must be a story!" While at least half or more of Targets fleet already did the removal years ago.

And nobody is eliminating games, those aren't distributed by the Walmart owned mass distributor.

Target has been expanding games in their electronics remodels as they reduce space dedicated to cellular phones, printers, laptops and computer accessories. Games are a strong business for Target.

I can concur - Walmart still has a healthy DVD/Blu-Ray selection. Do wish the competition could come up with their own solutions, though, instead of dealing with Walmart or discontinuing home video altogether.

I'd be surprised to see those stop, considering vinyl has drastically risen in prominence at retailers in the past decade, and oversized collectors' editions have proliferated (mostly for pop artists with passionate fanbases like Taylor's). Until just a few years ago, Target-exclusive CD versions were also fairly common with many major album releases.

Regarding games, I'm half-and-half on this insight. So far Microsoft seems the most likely to depart physical media seeing as the Xbox physical games team was laid off and the higher-spec Series X has had models lacking the disc drive.
Sony and Nintendo are chugging along, and PC gaming is long gone with a few exceptions.

[Super S]

Something I don't get though is how LP sales have risen while CDs have fallen by the wayside. On one recent Target visit, I found it interesting that they appeared to have more LPs in the store than CDs. CDs have far superior sound quality and are more versatile.

[mjhale]

Something I don't get though is how LP sales have risen while CDs have fallen by the wayside. On one recent Target visit, I found it interesting that they appeared to have more LPs in the store than CDs. CDs have far superior sound quality and are more versatile.

LPs seem to be more of a retro and nostalgia thing right now. At some point it became "cool" for younger folks to buy records and turntables. Looking at what Target especially sells, there seems to be a good bit of new or newer issue product on LP. There are also a lot of reissues of popular 70s and 80s material. As someone who was growing up during the transition from LP to CD, I see the sound quality difference and versatility of the CD. However, with proper equipment, there is something about the sound of a record that is unmistakable. I know that is an audiophile level comment that many don't identify with. And I'm not betting that the average record shopper at Target or Walmart wants the record for anything other than whats old is now "cool" again. I think the serious LP listener is at their local used record store or shopping a web site like Discogs.

[mjhale]

I can concur - Walmart still has a healthy DVD/Blu-Ray selection. Do wish the competition could come up with their own solutions, though, instead of dealing with Walmart or discontinuing home video altogether.

I'd be surprised to see those stop, considering vinyl has drastically risen in prominence at retailers in the past decade, and oversized collectors' editions have proliferated (mostly for pop artists with passionate fanbases like Taylor's). Until just a few years ago, Target-exclusive CD versions were also fairly common with many major album releases.

Regarding games, I'm half-and-half on this insight. So far Microsoft seems the most likely to depart physical media seeing as the Xbox physical games team was laid off and the higher-spec Series X has had models lacking the disc drive.
Sony and Nintendo are chugging along, and PC gaming is long gone with a few exceptions.

With high speed internet access common in mid size and larger areas, I don't think people are going to purchase physical media without some kind of compelling "extra" or personal connection to the title. It is part of our instant society. If I want to watch a random movie or listen to some song, I can do that almost immediately via some service. Same with video games. Services like Nvidia's GE Force Now let you play a large amount of games you have purchased through streaming on multiple devices including Mac and Linux which historically have been weak on gaming. Sure, the title is not yours in the physical sense and your access is only as long as whatever service you are using has license to said title. However, at this point, I think the majority of people own some amount of titles, whether DVDs or games, that have personal meaning to them, if they own anything at all. Most others just pull up whatever movie, song or game via whatever service they subscribe or purchased the title on and go from there. If the title becomes unavailable on a particular service, people grumble and then find a new place the watch said title or listen a given song.

[ClownLoach]

So once again, the topic here is overarching and that makes it inaccurate. I've dealt with all forms of physical media for two decades.

First we have the actual topic at hand, which is catalog CD and DVD/BD titles. Catalog means not new releases but rather titles that have been out for months, years, even decades. Over the last few years the majority of the distributors who would ship as few as one copy of a movie or album in a mixed box to replenish the "catalog" or aisles of product have gone out of business. There is a single remaining independent distributor, Alliance, but they are limited in capacity and assuredly getting out of the declining business as they have other kinds of operations. As sales decline all of these distributors have gone by the wayside as they operated on a model where they would take back unsold media. The unsold eventually would become the "$2 movie bin" and such at Walmart and other discounters, and the distributors would basically handle the markdown accounting with the studios. The studios don't want to do this anymore because they would rather stream everything, plus there is an incredible amount of plastic waste generated as the "old way" was to produce millions of copies of every new release album and movie to flood the racks at the stores, only to be pulled back later once sales declined. Rarely would a release be so popular it would require additional units to be made. Hundreds of billions of these discs are in landfills where they will accumulate for thousands of years. Not a good way to do business. Walmart has also partnered to control the studio distribution system which means that everyone is going to effectively have to order through a Walmart owned company which will be distasteful to Target, Best Buy and others. Notice the Best Buy exclusive "steel book" casing was moved to Walmart as part of that deal. Basically, everyone is going to eventually get rid of catalog physical CD and DVD/BD media except for the new releases because there isn't enough demand to distribute the product except with no return rights and the stores aren't going to take on the burden of eating the markdowns when "Toy Story 27: We mean it's the last one really this time" bombs and not one of the millions of copies sent to the stores sells. In a nutshell, Target and everyone else except Walmart have been eliminating catalog album and movie aisles for years now due to lack of product availability outside of their control. Target specifically removes these sections almost fully except for one aisle in every remodel now and I have seen some test stores with new releases only which I will get to in a moment. That is likely the way things will go in the future.

Target and Best Buy continue like many retailers to have a limited selection, usually just one endcap, of album and movie new releases. They are acquiring these direct from the studios at their risk, meaning that they aren't getting as many copies as they used to and only are buying the guaranteed hits. A perfect example is Taylor Swift who has a deal with Target for exclusive tracks, covers etc. Since they're ordering studio direct for these they don't have return rights and the store will have to mark down or eat any losses on unsold albums as they aren't going through Alliance or any other service as discussed above. There is no sign, actually plenty of evidence to the contrary, that Target will eliminate new releases. Furthermore, in my couple of decades of experience in the category, 80% of your sales are made from that new release display and 20% are catalog older titles. The only incentive for the catalog is no risk (since the vendor takes them back) and usually they have a higher margin as they sell near MSRP while new releases are always discounted close to cost.

The next topics are different. Books are distributed by the individual publishing houses when newly released, and most have return rights. There are still many book distributors and discounters. Basically books are what movies and albums used to be, distributed by many companies and accepted back unsold for full credit which means there's no risk for the stores to have a book aisle. Most of the vendors are now pay by scan, so the inventory isn't even store owned and the store just gets a cut of the sale once a book sells. This pay by scan removes all risk from the retailer but has also led to "no coupons" and most of the usual and customary 40% off new releases to disappear over the last few years. Target reduced books in all new remodels and prototypes to just one aisle over 5 years ago, although there are still some unremodeled former Greatland and Super formats that have 4 to 6 aisles of books which will go back to the vendor at their next remodel. Expect books to stay in a reduced assortment of primarily new releases and children's books.

LPs have become popular as collectibles and many buy them as artwork for their homes. LP frames are amongst the best selling frames at stores like AtHome and Michaels. They are usually studio purchased, no return rights, and at this point stores gamble on buying them but as long as they're turning a profit overall they'll stay as they have a high profit margin. Target has expanded these over the years and I wouldn't expect any changes in the near term.

Video games are the largest question mark. Typically the console maker has handled physical distribution in recent years for all three, Microsoft, Nintendo and Sony. Microsoft is clearly moving away from physical media as some new Xbox consoles don't even have a disc drive. Nintendo has media right next to scan cards that give a serial number to download the same game. Sony is rumored to also be going physical media free with the next PlayStation. And shrink for the physical media aspect of the category is high, plus in recent years there haven't been return rights for unsold so you usually see a back endcap of marked down media. In the past, the console manufacturers were very controlling of the business and wouldn't ship consoles unless the store bought media. I think at this point if I was Target, Walmart or really any retailer I would push to remove the game media because of the high shrink, high markdown losses, and questionable future of the category. Walmart is rumored to be eliminating catalog video game media and I would not be surprised if Target and Best Buy did the same as it's clear that the console manufacturers are going to phase out the physical media. Couple that with the fact that the industry is due for a new generation of consoles again, which likely will all be download only, and now the stores are going to lose a lot of money on the older physical media they're sitting on right now.

So in short for Target, expect new release movies and albums to remain, catalog movies and albums to go AWAY, books to remain, LPs to remain, and video games go with the whims of the industry.

[ClownLoach]

Target has actually confirmed what I stated above, that they're going to move catalog titles to their website and continue to operate only a few thousand titles. They said they will continue to stock new releases in stores, with additional inventory during times like Black Friday where you see big sale bins of movies and CDs.

This ruckus was caused by exactly what I suspected, a viral social media post from a person who took pictures inside an extremely old Target store that still had colorful neon on the walls and dozens of aisles of books and movies and music. This neglected old store had begun a remodel to reduce the size down to what is represented in the vast majority of the chain and had empty fixtures being dismantled due to the remodel. One store and dumb social media people make it into a national issue.