The Decline and Fall of Physical Media Retailing: A Timeline
By Harry McCracken | Thursday, February 17, 2011 at 12:51 am
Some of you may find this difficult to believe, but there was once a time when this country was positively bulging at the seams with cavernous retail establishments that offered books, recorded music, home video, or some combination thereof. Okay, there are still some of them left. But with Monday’s news that bookselling behemoth Borders is filing for bankruptcy and shuttering at least 200 stores, it’s worth taking a look at what’s happened to the retailing of physical media in this country in recent years. It’s been a remarkably bleak time.
The music retailing business has almost completely collapsed; the nation’s biggest video-rental outfit is bankrupt and its largest competitor folded last year; Borders is threatened with extinction and its larger and more successful rival, Barnes & Noble, faces serious challenges. All this woe has befallen these industries at the same time that digital media–from music downloads to streaming movies–has boomed.
You can’t blame digital content alone for media retailing’s hard times. Storekeeping has always been a tricky business, especially during economic slumps. (I don’t think that MP3s or iTunes had anything to do with the demise of big chains such as Linens n’ Things. Long before Amazon and Netflix started distributing content digitally, they up-ended their respective industries by shipping physical goods through the mail–Amazon has better prices every day than Borders has when it’s having a going-out-of-business sale.) And several of the giant retailers that have crashed seem to have been the victim of their own boneheaded business decisions more than anything else. (Borders opened three locations within two miles of each other in San Francisco, all of which are now toast; the management of Hollywood Video mocked Netflix-style mail-order DVD distribution as a blip they didn’t need to concern themselves with.)
Anyhow, here’s a timeline of what’s happened to the nation’s largest physical-media merchants over the past eight years. It starts in February of 2003–a little over four years after Diamond Media released the Rio PMP300 MP3 player, a moment that I, at least, consider the real beginning of the digital revolution.
Ready?
February 2003
Wherehouse Music declares bankruptcy, says it will close up to 120 of its 370 stores; it blames its woes on digital music piracy.
February 2004
Tower Records goes bankrupt; it too says digital piracy is to blame.
November 2004
UK music retailer HMV closes its last store in the US.
January 2006
Musicland declares bankruptcy.
February 2006
Musicland says it will shut down 226 Sam Goody stores, 115 Suncoast Motion Picture Company stores, and all of its Media Play stores.
August 2006
The Washington Post reports that 7500 of the 9500 chain music stores in the US that existed in 1991 have closed.
October 2006
Tower Records goes bankrupt. Yes, again. “We are not commenting other than to say that at the present time we have no intention of closing any of our stores,” a spokesperson tells the San Francisco Chronicle. “Our goal is still to maintain the Tower Records brand.”
December 2006
Tower Records closes its last 89 stores.
March 2007
Borders says it’ll close 250 underperforming, undersized Waldenbooks locations.
June 2007
Blockbuster says it intends to close 282 troubled stores.
September 2007
Hollywood Video announces plans to close 520 struggling stores.
October 2008
A struggling Borders says it’s secured financing to continue operations and may put itself up for sale.
Wal-Mart decides to shrink its stores’ CD sections.
January 2009
Virgin Megastore announces plans to close its New York flagship store; it will become a Forever 21.
After 85 years, San Francisco’s Stacey’s Bookstore closes, saying sales have fallen by 50 percent in eight years.
February 2009
Virgin also decides to shutter its other New York location and its San Francisco store; the latter is across the street from a thriving Apple Store.
March 2009
Virgin decides it’s on a store-closing roll and chooses to do in all the remaining US Megastore locations which it hadn’t decided to dismantle in January and February.
Terminally ill consumer electronics giant–and once-mighty seller of CDs and DVDs–Circuit City finishes liquidating its stores and goes out of business.
April 2009
In a regulatory filing, Blockbuster says it’s not positive it can remain in business.
September 2009
Hollywood Video decides to close 205 locations.
Blockbuster says it may close up to 960 locations–22 percent of its US presence.
November 2009
Borders says it will close 200 Waldenbooks and Borders Express mall stores.
December 2009
Trans World says it will close 150 FYE, Suncoast, and Sam Goody locations.
January 2010
Hollywood Video says it may shutter up to 1000 locations.
Blockbuster closes 253 stores.
Barnes & Noble closes the last 50 stores in its B. Dalton chain, which once had almost 800 locations; the folding of the one in Laredo, Texas makes it the largest US city without a bookstore.
February 2010
Blockbuster says it’ll close 150 more stores in April, with further cuts later in the year for a total of 500 to 545 closures. “While we believe the future is bright, the next 12 to 18 months will remain challenging as we balance the secular decline of a single channel with the ascension of emerging channels, such as vending and digital,” CEO Jim Keyes says in a canned statement.
May 2010
Hollywood Video declares bankruptcy, says it’ll close all 1900+ remaining locations, and proceeds to do so.
August 2010
Barnes & Noble puts itself up for sale (and doesn’t find a buyer–it remains independent as of February 2011).
September 2010
Blockbuster files for bankruptcy and says it will close many more stores. “After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model,” says CEO Jim Keyes.
Best Buy says it will slash store space devoted to DVDs and CDs.
November 2010
Borders says it will close 17 stores.
Barnes & Noble plans to reallocate space for toys, Nook demonstration areas.
January 2011
HMV says it will close 60 British and Irish stores.
February 2011
Borders files for bankruptcy and announces plans to close at least 200 more stores. President Mike Edwards says the move “affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products”
Whew. I think that’s at least six thousand individual retail locations that have vanished, and it’s not a complete list. As you might guess, I’m not inclined to cling to shiny discs or dead trees out of pure nostalgia, and a fair number of the defunct businesses above were no great shakes–but putting together this list still left me feeling wistful.
But here’s a less melancholy note on which to end this exercise: The best locally-owned purveyors of physical media seem to be in better shape than the soulless megachains. San Francisco’s Amoeba Music, Le Video, and Green Apple Books, for instance, are sprawling, wonderfully quirky independents that are still very much with us. Thank goodness for that. I feel like I might live long enough to see the city get down to its last music retailer, video-rental business, and bookstore–and I’d be awfully sad if they were a FYE, a Blockbuster, and a Barnes & Noble…
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February 17th, 2011 at 1:28 am
The one place I did not see on the list was Circuit City when it went belly up when 2009 started. They did not manufacture media content but did sell DVD's, CD's, Video Tapes, and consumer recordable forms of those media types. /but it was mostly a retail store. And where I use to get Computers that uses those media forms.
Plus I have two PC's one that's net connected and one that is not (this protects it from web damage, plus I use to store 8 Tera of movies, songs, images, software. And some of that content I do not want others to see (i.e. money leecher's (aka lawyers)
February 17th, 2011 at 7:57 pm
CompUSA and MicroCenter too!
February 20th, 2011 at 5:18 am
Circuit City's on the list – March 2009
February 17th, 2011 at 3:34 am
And the wonderful Powell's in Portland OR recently announced layoffs (but no hint of closing).
Seattle's Elliot Bay Books moved out of their long-time store 3 blocks from said bay into space in Seattle's Capitol neighborhood. I must visit the new place.
February 17th, 2011 at 7:59 pm
With Powell's offering used books right along side new ones, they almost offer the Amazon experience with the opportunity to still have that lovely retail bookstore vibe. Hopefully they can figure out how to streamline their operations to still stay profitable John!
February 17th, 2011 at 6:44 am
Here is the bottom line.
If you sell (via a physical retail store) any products that have these 2 attributes:
1. a part number (books with ISBNs are the best example)
2. weighs less than 75kg (almost all electronics)
THEN you are in trouble.
Even if the states force Amazon, etc. to charge sales tax, the ease of researching online and buying online will destroy these physical stores.
Best Buy should be very worried about being squished between WalMart (low price, instant gratification) and Amazon (low price, larger selection, delayed gratification).
February 17th, 2011 at 7:57 pm
Hi Dave, the one thing that I have seen Best Buy doing that I think may save them is being able to pick up online purchases in-store. When my camera broke 3 days before my vaca and I didn't want to pay crazy overnight shipping fees, I ordered it online (Best Buy still had one of the best prices!) and picked it up in the store closest to my route to work the next day. Uber convenient! I do think though that people using the Red Laser (and other such bar-code scanners) will be trolling the shelves. When retailer rebel by creating their own un-scannable bar codes, it makes consumers angry because they feel that the retailer isn't being transparent – a very valid point. Your WalMart point is a good one because they offer this service for some of their products too but frankly, they aren't a retail institution I am in love with supporting at the retail level. (have a totally different opinion of their .com practices which rock!)
February 17th, 2011 at 8:29 am
If its faster and less expensive to get it online, that's what people will do.
February 17th, 2011 at 8:35 am
So the store that sells the download technology is always packed while the stores that sell the physical content are slowly spiraling out of business. Remember when the Atkins diet put a whole host of bakeries out of business then had to declare bancruptcy themselves. Is that a picture of things to come?
February 17th, 2011 at 9:02 am
I just read your blog and completely agree with you. It is sad that there is no longer much business in retail media. I actually just blogged about it an hour or so ago. http://goddessbnl.wordpress.com/2011/02/17/why-i-…
Congrats on being FP!
February 17th, 2011 at 9:15 am
I have to say this decline frustrates me. I miss being able to physically peruse a store and leave with my purchases immediately after choosing them. I have been using Amazon more lately and I HATE not having my book as soon as I have paid for it. And I want a real book! I buy from my local Borders too and it is always far more gratifying to have the book in hand right after purchase and to be able to go start reading it immediately! I hope our Borders doesn't close.
February 17th, 2011 at 9:24 am
It is sad that all these stores are disappearing… Borders opened in the UK a few years back, and then within a couple of years went bancrupt in the UK and swiftly disappeared. It is the changinf word… how long until everything is digital… not only music but books as well….
February 17th, 2011 at 9:32 am
I loved Borders when it was in its glory about 13 years ago. The smell of fresh, brew while you peruse your favorite book. I have to admit, I either go to the library where I can get it for free…, BUT if it is a book I want to keep, I will buy it on Amazon. I love reading the reviews before I buy too. The sad part is people have more of a disconnect today. There is no human touch or interaction when shopping online.
February 17th, 2011 at 9:53 am
While I agree with your message, I think you will find that Musicland announced in December 2005, not February 2006, that it was closing all of its Media Play stores. They were, in fact, finished with the liquidation sales on January 20, 2006. I still miss getting my books there!
February 17th, 2011 at 10:03 am
I can see why. I have downloaded 100% of my music and resold all of my CD's. I have digitized all of my photos and trashed the hard copies, except for the ones already in books and albums. I have also donated all of my hard copy books to local libraries except for a few as decorations. I have ordered my favorite books on my Kindle. All of this will certainly make it easier when I move. No heavy boxes of Cd's, photos and old books. Great informative blog.
Blessings,
Ava
xox
February 17th, 2011 at 11:23 am
wow. i'm not ready to take this plunge quite yet. Just make sure you PLEASE do a routine back up! makes me nervous the thought of you losing everything stored on a few devices!!
February 17th, 2011 at 8:00 pm
Keep it in the cloud Ava!
February 17th, 2011 at 10:25 am
Great post, thanks for doing this research. I've been following the decline of the book retail industry in recent years, but it's definitely important to keep it in context. What we're seeing this week with Borders going into bankruptcy is part of a much larger set of trends. Should be very interesting to see how this all shakes out over the next 5-10 years. I suspect the retail environment is going to look *very* different in 2020.
February 17th, 2011 at 10:38 am
I like my old memories of Borders when they first opened in my neighborhood back in 96' or 97'. I was in high school and loved the smell of coffee, the soft collection of music that played, and the books in store were great. That's totally changed today. I also use to think that working at Borders would be fun. I worked at Borders in another state during college and really hated it. I wouldn't be surprised if that location (in Atlanta,GA) closes. It was the smallest store in the city compared to others. I hope the one I had such fond memories doesn't close. It may have changed but I still like to visit.
February 17th, 2011 at 10:42 am
You can add newspapers and magazines to that obit list, as well.
Now I'm off to eBay to see the price of my original, first generation Rio PMP300 MP3 player!
February 17th, 2011 at 11:22 am
I'm with ya! Maybe the mega-chain stores could learn something from the GOOD stores such as Amoeba! I'm glad a place like Amoeba is still around!
February 17th, 2011 at 11:25 am
A couple of years ago i heard some piece of music on bbc television by accident. I liked it. I then went to a pmr shop and found no content by that composer and yes i am in the right section. Okay it is not mozart or somebody like that. Having a name i find it online not at at big web place site and i buy it having listened to it.
I object to be called a pirate/not shopping at x huge shop/etc when clearly pmr assumes that i should be buying something that must do stock turn every 3 seconds or otherwise its not in stock.
I have not visited a pmr since.
February 17th, 2011 at 12:38 pm
If only I could freely exchange the hundreds of books I have in my apartment for the Kindle edition, I would have so much more space. The CDs are already long gone, their musical digits living in a fraction of the space on my laptop and iPod. Once video is easy to buy and download to watch on TV, my DVD collection will go the same way. Who needs physical? Long live digital.
February 17th, 2011 at 12:42 pm
This is really interesting. We have moved so much to online for a lot of things. And then of course there is the fact that with the economy slumping downward, none of us have any money to spend on things anyways.
February 17th, 2011 at 1:18 pm
I read your post on the the demise time line of physical media on a digital device. It explains itself. Good eye.
February 17th, 2011 at 1:28 pm
Timely post! Considering apparently here in Aus both Borders and Angus and Robertson are heading openly towards bankruptcy as well… I feel that I can make the switch to getting music on the internet much easier then I can to ordering books online. For music, its an immediate download and its much easier to browse then in stores (though the same is easily said of books).
But downloading music is immediate. Whereas waiting for a book to arrive in the post is an extremely frustrating wait, as well as being slugged with postage fees that are usually more then the books themselves. For that, I do so sincerely hope that somehow the book stores can hang on, even if I say goodbye to music stores…
February 17th, 2011 at 1:40 pm
Yayy for "quirky independents"! Glad you still have some to visit in your town.
Lost two precious bookstores when Barnes and Noble came to my town. Ironic they're now facing the same demise.
February 17th, 2011 at 2:15 pm
I love physical books, but for Christmas my boys got me the Nook & I haven't looked back. I was concerned about the price of downloading each & every book from about $3.99 to $9.99 when I read a book a day that would add up to a hefty sum, but my Nook lets me download from the library. What could be sweeter. I'm sorry Borders didn't get in on that craze. Times are tough all over.
February 17th, 2011 at 2:48 pm
Wow, you provided us with some really great information. Hollywood Video??? I completely forgot about them lol. Awesome post!
February 17th, 2011 at 3:11 pm
It's not just the retail landscape which is changing. Things like the album itself are under threat from digital media.
I reccomend checking out this excellent article on the 'download revolution'
http://www.wessexscene.co.uk/features/2010/10/05/…
February 17th, 2011 at 4:16 pm
I feel wistful as well; in my area our Blockbuster just closed down, which means I'm either limited to whatever's in Redbox, or what I order through Netflix, and those movies take a couple days. The Borders stores in my area are all closing; by coincidence, Books-a-Million just opened up. I don't imagine that would count as a quirky independent, though. alas, the world is changing…
February 17th, 2011 at 6:35 pm
How anyone can mourn the death of chain-stores, I can not understand. If all the independents who offer more than a product, but off an experience go under, then I will be truely sad. I pity the people who cannot find joy in the litte things such as the the texture of the pages, the quirky store clerks, and winding pasageways of discovery that so many independent bookstores offer. I pity people who have traded their appreciation of the small things in life and human interaction for convenience, and will voluntarily dull their senses, and their lives to save a few bucks. The worst part is, most don't even know what they are sacrificing. Don't they feel trapped in a loop of the opening scene of Fight Club?
February 17th, 2011 at 7:04 pm
We are getting our information and media from digital sources. Physical locations are under siege, and retail is not the only area. Education also ran for almost a century organized by physical information centers. What happens when the Internet comes along and provides more choice at a better price?
Thanks for the post!
February 17th, 2011 at 7:40 pm
the digitalization of music has also created opportunities for independent music to be heard, unlike books though in that authorship is not rooted facts or knowledge of a particular subject matter… limited access to historical works is also less consequential with music than with books as well… which makes the disappearance of bookstores a bit more bother some
February 17th, 2011 at 8:05 pm
Wonderful and really timely post Harry! Glad to see that your post made it onto Freshly Pressed! I feel like so many companies are ripe to be taken over by their online counterparts. This makes me sad in many ways because I do enjoy many actual stores. Seems like teenagers are going to have to find a new pastime than hanging out at the mall in a decade or so, huh?!
What do you feel is the remedy for those retailers looking at this being their reality within the next 5 years? How can the stationary shop and the florist keep their customers loyal, increase the value they offer and keep their doors open? While not a retailer myself, I would find your insight of interest!
February 17th, 2011 at 8:53 pm
It's hard to sympathize with these businesses that are going out because it seems like they've been profiting off of way overpricing media for years and years and years. That's why it's hard to feel bad for record labels who are going under as well.
February 17th, 2011 at 9:27 pm
You might appreciate this clip from Seattle's old comedy show Almost Live:
Roscoe’s Rug Emporium
February 17th, 2011 at 10:53 pm
Now is the time for independent retailers and manufacturers, publishers and sellers to shine. I believe the demand for quality from the general population is on the horizon and smart people will be there, ready and prepared to meet that demand.
February 17th, 2011 at 11:41 pm
A physical object is both itself, and all the information it takes to differentiate that object from the universe. In the end, information is the only thing that matters. I don't know how long it will take to get there, but eventually, biotech and CNC will come far enough that stores will stock raw materials, and popular items, but everything else will be made on the spot, and the only cost will be raw materials, amortization of the fabrication machine, and licensing on the information that defines the object. (Eventually you'll have a unifab as home appliance.) You don't have to be a rocket scientist to figure out where of those three, the profit margin will be.
But returning to this century, the issue isn't technology alone. It's also social behavior. Sears made an empire as a catalog retailer without any brick and mortar stores. Then came the auto (rather than streetcar) suburb, with it the shopping center, and Sears became one of the first big box store. Right now the technology favors the internet and downloading, but social rather than technological changes to how we live and play could rock it back the other way too.
February 17th, 2011 at 11:46 pm
Crossword and Landmark in India, please note.
February 18th, 2011 at 1:48 am
Numerous magazines and newspapers have also gone out of business maybe this is down to online magazines and news channels.
February 18th, 2011 at 5:30 am
Oh wow. Never really saw it this way. Thanks for the insight.
February 18th, 2011 at 7:39 am
I think I will go down to my local bookstore today, buy lunch in their cafe, buy a couple of magazines, let my son search for a book he might like and purchase it for him … before they decide to close down like all the big chains!
February 18th, 2011 at 6:36 pm
a well researched blog. I hope Borders doesn't close in Australia where I live. I think the answer to survival in general is QUIRKYNESS and ROBUSTNESS not the smug and bland!
February 19th, 2011 at 3:58 am
This is really impacting information. The deminishing industry that once was physical media slowly dwindles as technology and the economy changes. We have established new means of purchasing on online for a lot of things. And then of course, with the economy slumping downward, none of us have any money to spend on things anyways. The new phase or trends that business should focus towards, should be of the new age consumers. We've been introduced to so many new options of prodect and services. Businesses exist to meet consumer needs and if you meet those needs, the business will prosper. Failure to see this has left soo many businesses to pack their bags and leave it up to the locally owned businesses to profit from thier blindness.
February 20th, 2011 at 4:42 am
It seems like retailers are moving either online or out of business, and it's a global trend now. This phenomenon was recently featured in FT and I can see it just walking the London streets.
February 24th, 2011 at 6:26 pm
I will always miss Suncoast and my memories of working there…