Adapting too late to the change
The UK based music retailer HMV – which stands for His Master’s Voice – has officially “gone into administration,” the British equivalent of filing for bankruptcy, after it was unable to obtain £300 million in additional financing against debt. HMV’s 239 stores across the UK and Republic of Ireland are to remain open while looking for a purchaser. If a new buyer isn’t found, around 4350 people will lose their jobs.
HMV opened its first store in 1921 and has been a staple of High Streets across UK and Ireland ever since, however in recent years the group has struggled to compete with online sales and rivals appearing, while delaying its own move into e-commerce.
Ultimately though, this smacks of another example of the old model of the music and retail industries adapting too late to the change.
The days of popping to a record shop on a saturday to pick up the latest hit single are long gone. Music buyers, however, still like to own “hard copies” of albums: sales of physical CD albums are far healthier. Nearly 70m CD albums were sold in the UK last year compared with the 30m downloaded. But nearly two out of every three were bought online or in supermarkets rather than from traditional music retailers on the high street.
Once HMV was a great company at the forefront of new technology. Now it is on the back foot. The rise of the internet and digital music services, has rapidly eroded sales on the high street for HMV.
HMV’s demise sadly, could’ve been seen a mile off, and it’s worrying that once again there did not appear to be a plan B. Massive transformation is sweeping across many different industries. Unfortunately to many companies are stuck in the jar.
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