16/01/2013

The fall of HMV


I have tried to keep HMV going these last four or five years and I’m not the only one. Last year when the business seemed to be tottering towards the abyss, the music industry rallied around, desperate not to lose the last specialist music shop. This week it became clear that all the practical help and goodwill in the world is not enough to save it and HMV has gone into administration. We’ve seen this play out so many times and the result is inevitably the same. The reassurances that the shops will “continue to trade while a buyer is found”, sales and less new product in the shops, then the store closures begin until the last shop shuts and the brand vanishes. Afterwards people express disappointment and shock. Mostly the same people who have stayed away for years and never use it.


It has been in the air for years, ever since its last big rival Zavvi collapsed leaving HMV as the sole player. Not much of a prize when you consider that experts have been saying for years there is no long term future in physical music sales. In the four years since, developments in television technology have also sealed the fate of physical sales of tv and films leaving the much vaunted Blu-ray stranded as people mostly move directly from DVDs to smart TVs.

Even then there remains a sizeable- albeit shrinking- market for cds and DVDS but in the end HMV has been unable to compete either with relatively cheap supermarket rivals selling them as a loss leader. Some of us do still shop in HMV, certainly for new releases though their decision to cut back on archive cds must have harmed them.  At a time when their best chance for at least grasp several more years by serving its loyal customers, HMV inexplicably branched out into technology (ie things you don’t buy that often) and cut back on cd racks, the areas the customers they did have left preferred to browse.

Most people of course never seem to think about the implications of their buying habits; the cheaper they can have it the better, preferably free so even the artist themselves gets no money from their labour. Not all of these consumers are necessarily poor – after all if you were really poor you’d be unlikely to be able to afford to go online in the first place. The argument is that this obsession with free music is a justifiable reaction to the old style music business where much of the profit went to everyone except the actual artist but the fact is that most people who never buy cds or DVDs are too young to remember that business model.

It is ironic that just as HMV falls, so the laws have been tightened to prevent online retailers being able to offer their goods so cheaply. Play has already quit the market and Amazon has begun to increase its prices. One day we will look back at HMV’s shops and wish music and films were that comparatively cheap. Online retailing has turned out to be just the same as any other type- the aim being to slowly wipe out your rivals so you can then make real profits.

I remember when Woolworths went down and someone said when was the last time you actually bought anything from them. Most people could not really answer that question. In the case of HMV, it is easy to answer- this Monday in fact when I bought the new Villagers album. I don’t have some kind of emotional attachment to the place but I do feel for the people who might now lose their jobs especially as some of them used to work at Zavvi.

Analysts who can be relied on to examine these issues without sentiment suggest that even if HMV is now rescued in some truncated form it will not last because by 2015 over 90% of music and films will either be downloaded or purchased on line.  That may even be an under estimation.
You do wonder what our city centres will look like by the end of the decade - clothes shops, coffee shops, mobile phone shops and the odd department store. Most cities seem intent on building more and more retail units with no prospect of actually filling them. Perhaps nobody will even go there as we all sit at home permanently online working, shopping -downloading our lives and barely interacting with anyone except the people we live with.

HMV has been going since 1921, it’s Nipper the dog symbol a recognisable brand even if the old logo looked like it was about to be sucked into the enormous gramophone beside it. As some people have pointed out, HMV has played its part in aggressive business in its time, along with Virgin helping to undercut independent music shops in the 1970s and 80s until there was only the two of them left. So perhaps we shouldn’t be too sorry about their demise- another 10 years and we’ll probably be mourning the loss of Amazon.


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