Ongoing consumer discomfort with the economy, underscored by a 23.4% decline in entertainment software sales, contributed to Best Buy Co. reporting second-quarter (ended Aug. 29) income of $158 million, compared to income of $202 million during the previous-year period.

Entertainment software includes standard DVD, Blu-ray Disc movies, music CDs and video games.

CEO Brian Dunn, in a call with investors, said the retailer was actively pursuing digital distribution channels for licensed entertainment, including launching test digital initiatives in Canada, its CPW wireless device chain in London and, soon, two pilot programs in the United States.

“Over time you will see the center of our stores evolve … as we learn our way through what is the best way to present these digitally connected services,” Dunn said.

He didn’t elaborate further on what impact the digital pilot initiatives would have on packaged-media sales and shelf-space allocation.

http://www.homemediamagazine.com/best-buy/best-buy-testing-digital-entertainment-distribution-q2-sales-down-17051

It looks like Best Buy is shifting it's entire strategy:

He stressed that Best Buy "will always be there on price," but that this situation enables it "to connect price to service. Over time we will take share and build loyalty" with these new customers.

In discussing Best Buy long-term strategy, Dunn said that Best Buy views "flat-screen TVs, notebooks and mobile phones ... as on-ramps to the connected world." He said that the chain's future is related to giving customers the entry into "the connected world" and "not just sell boxes."

http://www.twice.com/article/353906-Best_Buy_Touts_Share_Growth_Holiday_Optimism.php

IMO it's too bad, though, if BBuy cuts down on its space for its DVD sales...they're one of the only places left (in my area at least) with a decent selection, especially of TV DVDs. Unless you count places like Wal-Mart (but I very rarely buy my DVDs there), or Barnes & Noble or the like.

Guess there's always online... :P

DGK