Best Buy, The Chain That Helped Trigger The DVD Revolution, Is Ditching The Disc For Good

October 13, 2023

• DIGITAL

Discs for sale at an Oceanside, Calif. Best Buy on Black Friday 2022. (Media Play News staff photo)

Thomas K. Arnold, Media Play News

Best Buy, which in the late 1990s led the charge by big retailers to take over the DVD sellthrough business, is ditching the disc, beginning next year.

Studio sources say the consumer electronics chain, which currently has a 4% share of the disc market, behind Walmart (45%), Amazon (18%) and Target (6%), is phasing out DVDs, Blu-ray Discs and 4K Ultra HD Blu-rays — including the exclusive Steelbooks prized by collectors.

The exit, which could begin as early as the first quarter of 2024, includes not just Best Buy’s more than 1,000 physical stores throughout the United States and Canada, but also the company’s online business, which sources say is very labor-intensive.

The move comes five years after Best Buy drastically scaled back its selection of music CDs. Video games are not affected by the disc exit.

Studio executives bemoan the loss of Best Buy, although they say the end of disc sales was not unexpected. Best Buy executives approached the studios two or three years ago and warned of a gradual exit as stores are refurbished, “so all this is an acceleration of what we knew was coming,” said one high-ranking studio executive.

Said another, “It’s unfortunate because they’ve been a good player and a good partner to the studios since the DVD’s inception.”

The news was first reported by Bill Hunt of The Digital Bits, a popular home entertainment blog.

In a statement to Variety, a Best Buy spokesman said, “To state the obvious, the way we watch movies and TV shows is much different today than it was decades ago. Making this change gives us more space and opportunity to bring customers new and innovative tech for them to explore, discover and enjoy.”

It’s the latest challenge for the physical disc. The format’s popularity peaked in 2006, when Blu-ray Disc was launched as the successor to DVD and consumer spending peaked at $24 billion. Last year, consumer spending on disc purchases and rentals amounted to a little over $2 billion.

Last fall, Walmart reduced the amount of floor space it allots to DVD and Blu-ray Disc by 20%.

In April, Netflix announced it was exiting its legacy disc-rental business — the final date was Sept. 29.

In September, Ingram Entertainment, the biggest third-party disc distributor, pulled out of the disc business altogether, with CEO David Ingram telling Media Play News, “Expenses are exceeding sales [so it’s] time to exit.”

And, most recently, Target has been removing endcaps for new-release DVDs and Blu-rays, and shelving the inventory farther back on the aisle.

Best Buy was once the top retail seller of DVDs, and its success with the then-new format was reportedly a major factor in getting Walmart to join in. In January 1999 Joe Pagano, then VP of movies and music at Best Buy, told the Los Angeles Times that the DVD “is the most widely accepted new technology in our company’s 32-year history … DVD is one of our star products.”

Best Buy also pioneered the concept of retailer exclusives, initially with music. The practice began in 1995, with an exclusive Beatles CD interview disc that was given for free to anyone who bought a copy of the Beatles’ Anthology 1 album.

Gary Arnold, who succeeded Pagano as Best Buy’s music and movies chief, told Billboard in 2016, a year before he died, that the concept of exclusives “was Best Buy trying to find a way to bring excitement to the business and … extra value to the consumer. It was not about the exclusive, it was about trying to get the consumer to come in and shop more frequently. Traffic is important and we found when there is an exciting offering of differentiated product, it drove a lot of traffic to the benefit of the stores.”

 

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