Billboard report says Best Buy will stop selling CDs this summer

Best Buy has already been drastically shrinking the space in its stores dedicated to music over the last decade as it has made more room for better-selling things like smart home products and appliances. Is it now going to take the next step and jettison the increasingly-obsolete CD from its stores altogether?

A report from Billboard that relies on unnamed sources says so. Specifically, it says that the Richfield-based electronics chain will pull compact discs from its stores as of July 1, but will continue to sell vinyl for at least the next two years.

Best Buy declined to comment on the report.

As physical music sales continue to fall as digital and streaming media gain more popularity, the Billboard story also says that Minneapolis-based Target is currently demanding that music suppliers provide CDs to it on consignment so it doesn't take on the risk if the products don't sell.

In a statement, Target said that it's committed to working with its partners to bring the latest movies and music titles as well as exclusive content to consumers.

"The changes we're evaluating to our operating model, which shows a continued investment in our entertainment business, reflect a broader shift in the industry and consumer behavior," the company said, without further elaborating on those changes under evaluation.

Target still puts some effort into its music business, often coming out with exclusive versions of major new releases with different cover art or additional posters or sometimes bonus tracks. Some of its recent partnerships have been with albums such as Justin Timberlake's "Man of the Woods" and Taylor Swift's "Reputation."

While Best Buy still occasionally hosts musicians in stores for signings, it has been more muted about its music business in recent years.

Entertainment sales, which includes CDs, DVDs, and video games, had the steepest decline of any category at Best Buy in the previous fiscal year, dropping 14 percent. The category now accounts for just seven percent of the company's $40 billion in revenue.

Sources told Billboard that physical music only generates about $40 million a year for Best Buy. If that figure is accurate, that would translate to less than 1 percent of its annual revenue.