Best Buy’s Exit from Disc Sales Has Nothing To Do With the Market’s Viability
October 14, 2023
Disc fans, don’t take it personal.
Best Buy’s decision to stop selling DVDs, Blu-ray Discs and 4K Ultra HD Blu-rays, both at its 1,000-plus physical stores in the United States and Canada and online, isn’t really a repudiation of a market it dominated in the late 1990s and early 2000s.
Rather, it’s part of a strategic shift away from its legacy consumer electronics and toward all things high-tech. As Best Buy says on its website, “our purpose is to enrich lives through technology.” On Best Buy’s latest earnings call, CEO Corie Barry told analysts the retailer wants to expand into “growing categories like PC gaming, and newer offerings such as GreenWorks cordless power tools, wellness products like the Ouraring, Epson, short-throw projectors, e-bikes and scooters, and Lovesac home furnishing products.”
Best Buy also is investing heavily in health tech. In March, Barry on an earnings call said, “The role of technology within health care is becoming more important than ever and our strategy is to enable care at home for everyone.”
Studio sources tell me that Best Buy’s share of the disc business has shrunk to a meager 4%. Based on DEG estimates that consumers spent a little over $2 billion last year on disc purchases, that amounts to just $80 million – or less than $80,000 per store, much less when you factor in online sales.
Contrast that with Best Buy’s purchase two years ago of remote patient monitoring company Current Health for $400 million, which amounts to five years of disc-sale revenues.
Since then, the push into health tech has revved up. The company expanded its relationships between Current Health and other health systems to the point where its at-home health business now works “with five of the 10 biggest health systems in the United States,” according to the Best Buy Health website.
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Last year, Best Buy began selling hearing aids as part of what it called in a news release “a new experience for hearing devices” that includes “an expanded collection of hearing devices, an in-store experience in more than 300 stores, and a new online hearing assessment tool.”
In March, Best Buy partnered with Atrium Health, one of the country’s largest hospital operators, to set up virtual hospital rooms in people’s homes. The retailer began training and deploying Geek Squad agents to provide and set up in-home, wearable technology that allows an Atrium Health care team to monitor a patient’s vital signs.
Just last month, in September, Best Buy announced plans to work with Pennsylvania-based Geisinger — one of the biggest integrated health systems in the country – on co-developing a bundle of technology and services that will enable healthcare organizations to operate their own chronic condition management programs.
Most recently, in early October, Best Buy announced it will start selling continuous glucose monitoring devices that require a prescription, a move Forbes says is “opening the door to broader future healthcare product offerings ordered by physicians for their patients.”
The push into health tech is so great a corporate priority that Best Buy has even launched its own Best Buy Health website, on which it says, “Best Buy Health meets you at the intersection of health and technology. Best Buy Health is here to help enable care and support personal connections using our world-class omnichannel capabilities, distribution and logistics, strong analytics, in-home services, and compassionate Caring Center call specialists.” Meanwhile, a Home Health Care article maintains that over the coming year, Best Buy “expects to grow its Best Buy Health sales faster than its base business as it leans more heavily into its at-home care platform.”
So disc fans, remember, it’s not about the DVD. Just as people change, businesses change, and Best Buy has charted a new path to a completely different destination.
I’m sure if they were still making a good profit off disc sales, they’d be keeping them, but they’ve been using them as loss-leaders for years. Sadly that helped to put many REAL media stores out of business as they couldn’t compete with that; they would’ve lost money just matching those prices. I’m even guilty of buying many movies at Best Buy while I worked for Tower Records, as their sale prices were less than my employee discount. But silly me thought that even if they put Tower out of business they’d at least still be selling movies. Now they’ve dumped them as they aren’t as hot as they used to be, while Tower would’ve stuck with them if they were still around.
If they’ve just “charted a new path,” they should do something to get all those stores they helped to put out of business re-opened so that we’ll still have a place to buy discs. Sacramento, where Tower was born, is currently a wasteland for any type of media purchasing. I’ve had to mail-order just about everything the past few years and it’ll get even worse with Best Buy out of the picture. I much prefer buying in-store for a number of reasons but there’s just about no place left to do that now. Target was really the only other place I would even look for movies and they’ve drastically reduced their selection with rumors that they’ll also drop them completely, and Walmart is just a mess stocking more obsolete standard DVDs than 4ks.
Think about what you’re saying. Best Buy gave you lower prices for years, which you admitted to appreciating so much that you would buy from them rather than your own employer. By being priced out of the game, many of those businesses that couldn’t compete with BB’s prices went out of business. Now that Best Buy is getting out of selling physical media, you think they owe those other companies their effort to help put that back IN business simply because you don’t like buying online? That’s bananas. How about this – anyone who still prefers buying in store and took advantage of Best Buy’s lower disc prices (and, therefore, also had a hand in putting those companies out of business – I’d argue that they had a LARGER hand in it than BB because they chose with their dollars) should tally up how much they saved at BB over the years and give that to these businesses as re-start up money.