Published on February 4, 2013 | by Rowan Curtis0
Has his master lost his voice for good?
HMV’s recent slide into administration perhaps comes as no surprise; the writing has been on the wall for the former stalwart of music and film entertainment for some time, with customers moving towards e-commerce, forcing the industry to move with them.
The increasing trend of downloading music through iTunes and other online sites, along with the likes of Amazon and Play.com offering DVDs at reduced prices that are delivered straight to the front door, has left the big chains struggling to compete.
Now it seems that unless HMV can find a generous investor with deep pockets, the little white dog on Britain’s high streets will be no more.
So is this the end for the former giant of home entertainment and what does it mean for the music industry as a whole?
The download market has arguably had the biggest impact on HMV’s dwindling sales, with more and more people choosing to buy their music from the comfort of their homes rather than heading out to their local high street.
Piracy to legitimacy
What started as an illegal practice over a decade ago has since been seized upon by record labels eager to compete with their pirate enemies.
A commendable move, but one that has arguably had the most devastating impact on the shops that music lovers once spent many hours perusing on Saturday afternoons.
“UK record labels have embraced digital to their core.” British Phonographic Industry chief executive, Geoff Taylor
In early 2012, it was reported that digital sales in the US had overtaken physical ones with an 8.4 per cent increase and five per cent decrease respectively; later in the year, the UK market witnessed a similar change with digital revenue increasing by nearly a quarter, leaving physical copies in their shadow.
While the surge in download sales has had a devastating effect on companies like HMV, it has provided record labels with new initiatives to promote and sell artists’ music.
Geoff Taylor, Chief Executive of the British Phonographic Industry – the record industry trade association – said: “UK record labels have embraced digital to their core, supporting innovation and licensing more new online and mobile services than any other country.”
High street plight
HMV is certainly not alone in its plight, as many of the big software and entertainment companies have faced similar financial woes. Camera store Jessops was recently forced to shut up shop after 78 years in business, along with electrical suppliers Comet.
It was also recently reported that the UK division of Blockbusters had entered administration with 129 stores planning to close. It now seems that even more high street shops will be following in the footsteps of the once beloved Woolworths and the sight of pulled down shutters will become increasingly familiar.
“We hope the administrators can find a long-term solution that keeps HMV stores open and saves jobs.” British Phonographic Industry chief executive, Geoff Taylor
Despite the fact that HMV was recently named in the top ten of the public’s most wanted high street shops in a market research poll, maintaining sufficient revenue has been the company’s biggest concern and it now appears that 4,500 jobs are at risk.
However, many inside the music business are still optimistic about the future of the record shop and its employees. Taylor is among those who believe the company has a chance of surviving with the right amount of care and investment.
“HMV has been an institution at the heart of retailing music for as long as the industry itself. Consumer demand for CDs remains significant,” he said. “The administrators have indicated that they intend to continue running the business, so we hope they can find a long-term solution that keeps the stores open and saves jobs.”
Impact on artists
Asides from the job market and the store itself, HMV’s demise could have a notable impact on the artists that have provided it with its music for so long.
With people choosing their favourite songs from services like iTunes, bands and artists that are harder to seek out on Britain’s high streets have the chance to create a bigger presence online. This has led to record labels paying more attention to the activity in the download market.
Joe Blamey, drummer with Essex-based band The Ends said, “HMV’s closure is just a sign of the times. However, it will certainly change things for the music industry and the artists trying to make it. It will mean that bands like mine will get more of a chance through independent labels that cater to independent record shops instead of the big music corporations.
“I believe downloads create more opportunities for up and coming bands.” The Ends drummer, Joe Blamey
He added: “A bigger download market means it is easier for unsigned artists to get their music heard by the public, and then hopefully signed by a label. I believe downloads create more opportunities for up and coming bands as they cut out the middle man and the difficult task of trying to get signed by bigger record labels that used to cater for places like HMV.”
So it would seem that HMV faces a long road back to its familiar place on Britain’s high streets, but with music as popular as ever and more opportunity for aspiring artists to get themselves noticed in the wider download market, the industry as a whole is by no means in jeopardy.
Should HMV close its doors for a final time, many are still hopeful the company will continue to exist as an online retailer, something that would create a fascinating new rivalry with the iTunes and Amazon juggernauts that contributed to their downfall in the first place.
Perhaps there is life in the old dog yet.