Music companies are facing an increasing bind in the selling of music on CDs as dedicated music stores go bankrupt while Wal-Mart and Best Buy tighten their grip, according to the Wall Street Journal.

In former times, music critics and deejays helped people discover music. Now, the business decisions these big chains make determine what CDs, even in a declining market, make it to the shelves.

"Thanks largely to aggressive pricing and advertising, big-box chains are now responsible in the U.S. for at least 65% of music sales (including online and physical recordings), according to estimates by distribution executives, up from 20% a decade ago," Ethan Smith reported. What’s more, those chains can get by on a much lower profit margin than smaller boutique stores.

Even though the chains claim that they’re just giving people what they want, some of the labels worry about restrictions on what’s carried on the shelves. Also, CDs that don’t sell through quickly enough to meet the chain’s business rules get quickly returned.

Another factor to contend with is the sensitivity of the stores regarding controversial material. "Wal-Mart, for example, has long refused to carry any album bearing a "parental advisory" label warning of lyrics that are potentially inappropriate for minors," Mr. Smith wrote. "As a result, major record labels typically create sanitized versions of albums for sale there and at other sensitive retailers."

Finally, with the overall sales of CDs slumping, some chains are starting to reduce the square footage dedicated to CD shelves. "Certain businesses are starting to flourish at the expense of others," said Gary Arnold, Best Buy’s senior vice president for entertainment. "Right now the hottest categories in entertainment are gaming and the movie business."

The last straw for the CD may be the pricing. Customers are accustomed to commodity pricing on CDs [and movies]. However, some new CDs are still released at US$15 to $19, and the labels are blamed for that contribution to waning customer interest.

It’s unlikely the CD will die quickly, however. They’ll remain a lure to customers who want to come in and browse, perhaps buying something else.

Maybe even an iPod.