Consumer electronics retailer Best Buy made a landmark announcement this week: the company will stop selling any form of physical media beginning in 2024.
The end of physical media at Best Buy means no more DVDs and no more Blu-Ray discs, ending what was once made for an enjoyable outing for entertainment fans who often used the retailer as a substitute for the old Blockbuster-esque movie stores. According to the company’s announcement, Best Buy will also stop selling physical media online, which includes 4K titles, as well as some known as special-edition “steel books,” for which collectors often have an eye.The change could take effect as early as the first quarter of 2024.
Once upon a time, the media department at Best Buy was the statement piece of the retail location. While Best Buy is also a retailer of computers, computer accessories, software, smartphones and smartphone accessories, household appliances, televisions, and a variety of other products, the Best Buy locations of days gone by were largely anchored by their massive home entertainment media department. But, as they say, times are ‘a changin’.
More specifically, economics have changed. Now when customers visit a Best Buy retail location, they see the larger departments reserved for computer sales and smartphones (both of which can now be used to access and enjoy streamable content that consumers used to purchase in the form of a DVD).
For now, Best Buy still sells physical video games, but there’s no guarantee that they are safe from a sudden disappearing act at Best Buy. That’s because companies like Microsoft and Sony “evolve systems to focus on digital distribution,” according to The Verge.
DigitalCommerce360.com reported the following financials for Best Buy for the fiscal quarter which ended on July 29, 2023:
For the quarter ended July 29, 2023, Best Buy reported:
- Domestic online revenue declined 7.1% to $2.76 billion.
- Best Buy’s online sales drove 31.0% of revenue.
- Domestic revenue declined 7.1% to $8.89 billion.
For the six months ended July 29, 2023, Best Buy reported:
- Comparable online revenue declined 9.7%.
- Domestic comparable sales declined 8.4%.
Best Buy CEO Corie Barry said in a statement that the retailer expects 2023 to be a low point when it comes to technology demand, but Barry also said that tech sales will stabilize in 2024.
“Our financial results were better than expected, and they reflect a consumer electronics industry that remains challenged due to the pull-forward of demand in prior years and the various macroeconomic factors that we are all too familiar with,” the Best Buy CEO said. “We continue to expect that this year will be the low point in tech demand after two years of sales declines. Next year, the consumer electronics industry should see stabilization and possibly growth driven by the natural upgrade and replacement cycles and the normalization of tech innovation.”
Streaming Services = Ease of Access to Entertainment
Best Buy has seen a decline in sales in recent quarters, and there’s no doubt that the growth in popularity of streaming services has impacted the sale of physical media in recent years. While some consumers prefer the hard copy of a favorite film in the form of a DVD or Blu-Ray disc, the fact remains that streaming services offer a less-cluttered approach to having hundreds of titles at the ready. Streamers also make accessing home entertainment less difficult and time-consuming.
In the past, consumers had to buy DVDs with or without the digital copy option. Then they had to be sure they maintained individual discs by not allowing them to be scratched so that the media wouldn’t be corrupted. Then there was the challenge of storing the physical media. Streaming service catalogs–like the expansive one found on Disney+–take all of those challenges out of the equation, making it easier than ever for consumers to enjoy their favorite films.
It’s worth noting that Best Buy locations are not closing to the public; instead, the company is shifting its focus away from media that simply doesn’t sell as it once did in an effort to cut costs and put an end to the downward trend in sales that is no doubt reflecting in the company’s quarterly earnings reports.