You know things are bad when the company itself is saying that it may not be around in the coming few months! However according to reports, the suppliers to the high street chain are still backing the company, which is probably the most important string to the HMV bow right now. If they lose the support of their suppliers however, they might as well shut up shop now.
The big question here is what has caused HMV to be hit so hard? It lost out mainly due to being on the back foot when it came to the digital music revolution. iTunes from Apple really hit the company, as well as others, very hard indeed. In fact iTunes sales account for over £2billion per year in online music sales in the UK. Other companies like Amazon have adapted a little bit better. They’ve created their own music download section, though it’s nowhere near as advanced as iTunes, at least they’re making an effort. HMV on the other hand have been very slow off the mark. They have tried to update their online music operations. Their site looks well laid out, better than the Amazon download site. They have a list of 8 million songs to choose from, and the prices are very similar to iTunes. But because they were so many years behind Apple, most people’s default choice of online music store is now iTunes. They won’t be able to catch up.
Speaking from a personal point of view, their prices in-store are far too expensive. Why would I pay £15 for an album when I could pay half that online? Spending another £7/£8 just to own the case isn’t enough justification.
HMV have spent a little bit of money trying to update their stores. The thing is, I never found their stores dowdy or offensive in the first place. I always found it a nice environment to be in. So money wasted there if you ask me.
They’ve also made their way into technology. They sell things such as iPods, iPads, speakers and other musical hardware. The problem here again is price. Online these items are cheaper. And if someone is going to buy something like an iPad, or speakers, they’re more likely to go to those suppliers direct and pay a cheaper price.
I think the overall problem here is that HMV have an old business model that has just been caught out by the advances in internet shopping habits and the recession. I can see the chain going into administration sooner rather than later. Hopefully it will find a buyer. I’ve always been a fan of HMV. In fact I have a points card with them, which I probably need to spend before they go! Someone, possibly one of the guys from Dragons Den, needs to take over the store and inject some new passion and ideas. Maybe reduce the high-street presence, as there probably isn’t a future with that, and focus more on creating a bigger and better online business.
The employ thousands of people in hundreds of stores. It will be a sad day if they were to go from our high streets altogether.
>Wherever you shop you will never get a lower price on an iPad. Prices are set by apple, can't be altered so same price at hmv as apple store etc etc
I for one hate online shopping. Loathe it with a passion and would much rather go to a shop.
>Amazon are untouchable when it comes to books, music, videos and electronics. They've been leading online shopping for more than ten years.
More recently, iTunes has claimed a significant stake in the music market with downloadable music. Like Amazon, they're untouchable.
So, in your infinite wisdom, you think HMV should move away from the High Street and concentrate on the online market, where they have absolutely no competitive advantage, but will always be more expensive than their rivals.
>Re the above comment… and in your infinite wisdom, how exactly will clinging onto the high street help? People are moving towards buying music online, both for downloads and for actual CD sales. Not surprising as this is not like buying a TV or washing machine – if you want an album it doesn't really matter where you buy it and you don't need to visit a store to research it first – chances are you've heard it on TV/YouTube/Radio etc and decided you want it – wherever you buy it from it will be the same thing so it… Read more »
>Andy – your explanation of how HMV could reinvent itself was sort of what I was aiming at. It's current business model will make sure it won't see past the end of the year. It has to focus more online. I do think it can compete against the others, but if it is to stand a chance of doing so, the effort needs to be made now. Also, good point made about the existing high-street stored playing a decentralized role. I don't think HMV should be 100% written off yet. Some creative business man could take over and turn things… Read more »
>The combination of their online experience (longer than virtually any other significant online store), infrastructure and global buying power DOES make Amazon untouchable in online music sales. HMV have, for several years, had an online store of their own. It's failure (who here can honestly claim to use the HMV site more than they use Amazon?) has contributed to their difficulties. So advising them to withdraw from a market they know well and put their efforts into a market they have previously failed in and which is dominated by corporate behemoths HMV can't possibly hope to compete with is –… Read more »
>I take your point about the online bandwagon, but in this case I genuinely think it does apply, simply because the market for their product really has moved online and , I believe will c0ontinue to do so more and more, especially as the download side grows at the expense of CD sales. Speaking personally, I always resisted buying music as a download and preferred CD's – although I do still buy CD's, I get most my music now via downloads and what CD's I do buy are brought online, 99% of this at Amazon (and very occasionally in supermarkets… Read more »