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	August 20, 2007 How Music Retailers Can Avoid Digital Disaster CD Sales Are Dropping: What Can Retailers Do To Survive? by Victoria Bracewell Lewis with Michelle de Lussanet, Josh Bernoff, Rebecca Jennings, Lauriane Camus	Average: 9  (4 ratings)

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Executive Summary

Digital music consumption has shifted into high gear, with a 71% increase from last year. In contrast, CD sales have been dropping steadily over the past decade. No music retailer is left untouched by this disruption: The US's Tower Records is shutting down; the UK's largest music retailer HMV has issued two profit warnings in the past year; and even Carrefour, France's biggest music retailer, has admitted that it doesn't make money on the CDs that it sells within Europe. All signs indicate that the overall market will be bigger than it is today but much more diverse. However, music retailers need to make radical changes soon to keep customers coming in the door. This includes music syndication, direct distribution business models, and multichannel points of sale (POS). For the retailers, the customers are out there. Large retail chains and independent music retailers simply need to look for the shoppers in new places and retain their loyalty with new strategies.

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