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Originally Posted by dolivas
I don't believe it's the end of brick and mortar stores but it's the end of huge mega-chain music stores. A lot of it has to do with the price of cds and lack of variety/quality material out there. Likewise, mp3 downloads have been huge in bringing down sales. Walmart and other big box stores selling cds at lower prices plus giving you the benefit of buying other budget crap really undercuts those stores.
Brick and mortars still should survive if they tailor themselves to niches, either to serve as accessory stores where you can buy posters, t-shirts or portable media player stuff, or to serve a different audience which still likes vinyl records, best-of, boxed sets, rare albums etc. Dunno how profitable or if it is still profitable to sell a medium such as cds which are slowly being overtaken by digital media and coming soon flash memory. Either diversify more or fall it seems to be the case.
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Big box stores and new technology are huge contributers to the decay of the larger chain stores, but I don't think diversity helped to keep Virgin afloat. I think large overhead combined with low-markup merchandise did them in. Virgin had a huge selection of vinyl, DVDs, clothing, electronics, and books. The big box stores demand rock-bottom prices on popular cds by threatening the majors with not carrying their products. Big box stores will even use cheap cds priced below cost as "loss leaders," just to get customers in the door.