When movies shifted from videocassettes to DVD, retailers simply cleared the tapes off the shelves to make room for discs. That’s not so easy now that movies appear poised to follow music onto the Internet.
The shift of music online has hurt stores such as Best Buy, Wal-Mart and Circuit City, and some retailers are looking to avoid a repeat with movies. Wal-Mart has launched its own movie download service, Best Buy is said to be in talks to start one, and Blockbuster explored buying movie download company Movielink earlier this year.
Music and DVDs are important to retailers because they’ve traditionally driven customers to stores. Each week’s new releases give people a reason to come back. And for electronics retailers such as Best Buy Co. Inc. and Circuit City Stores Inc., discs are often a cheap impulse sale, unlike a pricey computer or TV.
But the decline in the number of CDs sold has accelerated every year since 2003, and dropped 11.7 percent last year, according to NPD Group. The number of DVDs sold grew 5 percent last year, but that was down from a 9 percent increase during the previous year. Selling prices for both music and movies have declined. And NPD said DVD sales would have slid faster if not for the growth of TV programs offered on DVD.
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