You can't blame Trans World Entertainment (NASDAQ:TWMC) for missing its mark. If you ran a chain of CD music stores, you'd be skipping around like a scratched a disc, too. Sales of prerecorded music are off again this year, just as they have been every year but one since 2000. Digital alternatives have folks buying tunes online. CD stores that turned to flicks to help offset the aural carnage are now finding that consumers are tiring of DVDs, too.

That's where we rejoin Trans World, as it warns investors that it's not going to earn the $0.65 to $0.70 per share that it was targeting for this year. Instead, the company will muster a profit between just $0.25 and $0.30 a share.

A weak third quarter in which Trans World suffered through a 6% to 7% decline in comps is partly to blame, but shaving $0.40 off its guidance means that it thinks its seasonally significant holiday quarter will also be a bust.

The parent company of FYE, Coconuts, Wherehouse, Spec's, and many other concepts acquired a lot of those names when it figured that sector consolidation would pay off. Now it's in a rut. When even a bookseller like Borders (NYSE:BGP) is warning of double-digit dips in music sales at its superstores, you know that this isn't the music industry's finest moment.

However, what's worse for a retailer like Trans World is that the smaller pie is also being carved up in new and different ways. Apple Computer (NASDAQ:AAPL) has sold 500 million song downloads through its industry-altering iTunes store. Even Starbucks (NASDAQ:SBUX) is starting to let its latte-sipping patrons burn customized CDs at its Seattle stores and its new Hear Music Coffeehouse venue.

Best Buy (NYSE:BBY) must have been playing some blissful air guitar the moment it was able to unload its Musicland chain back in 2003. There are way too many places to buy digital downloads and marked-down CDs these days. Why pay nearly retail at an overpriced suburban mall shop?

You can't blame Trans World for trying. It's not oblivious to the changes. It's in the process of rolling out the third generation of its listening and viewing kiosk stations. Enabling digital downloads and in-store CD burning is the right move, despite the restrictive mechanical licensing agreements that have shackled traditional retailers to the cumbersome ball and chain of physical product.

However, if all that the next generation of CD stores can offer is the exact same experience of discovering new music and digital downloads that consumers can duplicate at home, why bother? The caveat of any cover song is that it has to have something more to offer than the original version. Otherwise, you just shut your yap and stop singing.

Best Buy is a Motley Fool Stock Advisor active recommendation.

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Longtime Fool contributor Rick Munarriz thinks that the only other good reason to perform a cover song is when you can't write a new song on your own. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.