The End Of CDs: Russian Retailer Latest To Take Music Off Shelves

It’s not just in western markets that content sales are moving rapidly from physical to digital. One of Russia’s largest electronics retailers says it will stop selling music CDs from mid-March.

M.Video says music CD sales fell by 3.5 times in the last two years.

“Discs with video and software are still on sale but, in the next two years, the retailer wants to transfer the sale of all media products on to the internet,” Vedomosti reports. “It will sell music, software and movies through the online store, not physical media.”

Content is not M.Video’s main business as much as home electronics goods. That diversity at least stands it in good stead.

Just as in publishing and other sectors, the drop-off in physical sales is becoming so pronounced that many publishers and retailers are deciding simply to get out of the physical game and to seek a more viable digital alternative.

Tower Records, Virgin Megastore and Zavvi are amongst those whose bricks and mortar have crumbled. HMV (LSE: HMV), on which labels depend for much of the UK sales which still make up the lion’s share of music revenue, was rescued from a default last month only because those labels wrote off debt by taking equity in the company.

Russian recorded music sales fell by 46 percent between 2006 and 2011, and physical sales fell by 35 percent in 2010 alone, according to the International Federation of the Phonographic Industry. But the country’s online population is booming.

As Livenation Labs emerging technology SVP Ethan Kaplan (a former *Warner Bros.* Records technology executive) says: “When people talk about ‘saving’ the music business, they’re talking about saving a business that doesn’t exist anymore. It’s gone. Selling records in to stores, that’s not a sustainable business.”

Music strategist Mark Mulligan told an industry event in London on Thursday: “If HMV disappeared off our high street, about half the music market could disappear overnight.”

M.Video online sales rose 90 percent through 2011, pushing company sales up 30 percent.