RIP HMV

It may have been inevitable but the impending disappearance of the last major physical retailer of music and movies is still to be lamented.

The world has moved on an awfully long way since His Majesty's Voice marketed by the little dog listening to the gramophone player with its big amplifying horn excited our great-grandparents.

Before the company's arrival, just about the only way to get music at home was to play it yourself, if you had the ability. Maybe some readers still have a singsong around the piano but they will be in a very small minority.

The record was therefore a major development and in the ensuing 90 years, the world has changed beyond belief, insignificant part thanks to the efforts of HMV. 78s gave way to 45s and then LPs, which subsequently became albums and then vinyl collectors’ items.

Cassette and at almost the same time cartridges introduced portability until the ultimate, invisible MP3 altered music delivery forever.

In relatively recent years, there was the revelation of being able to choose what you watched on your increasingly large television screen.

The videotape was astonishing, and soon enough gave way to DVDs and now blu-rays (still so new that the voice recognition software creating this article does not recognise the term). Once again though downloads and streaming are changing that market.

Readers will get their pleasures in different ways. Some of us enjoyed wandering around a plethora of high street music stores such as Virgin, Tower and HMV discovering new releases whether to watch or listen to. Browsing online does not provide the same experience but in future, is the only choice that any of us will have.

One possible consequence is the demise of the CD/DVD/Blu-ray. Now that we cannot see them as  we purchase, all the attractions of clear or blue plastic cases with pictures on the front will not matter any more?

This has not been a good few months for shoppers with the last major camera chain, Jessop's disappearing along with a good number of other retailers who did not make it through the winter.

Are accountants or bankers to blame? Probably not in these cases, where business models when it comes to selling physical goods while paying high rents and staffing costs have become increasingly unviable.

Had a government clampdown on VAT and other tax avoidance by some of the online retailers come sooner, it might have extended the life of HMV (and its small but valuable sister company, Fopp which will presumably also disappear again having gone into administration before HMV purchased it).

In reality any stay of execution would have been no more than that. A handful of big online retailers have got close to monopolising the market and in doing so, perhaps callously perhaps not, led to a fundamental change in the way that we are able to buy many different products. Illegal downloading cannot have helped either.

Many people may not care about the disappearance of a music chain (even with that rarity, unfailingly courteous and helpful staff) and might not even notice. However, this is still quite possibly the tip of a very large iceberg that is likely to see many other types of store disappearing.

How long will we be able to buy books in the shops? It is very noticeable that the number of chains is diminishing, perhaps more in the United States than over here, but the death knell may be ringing before too long. Other specialist retailers will also struggle to compete with their online competitors.

What does this mean for the future? Local high streets packed with fashion retailers, pound stores, coffee shops and estate agents, with the odd hairdresser, optician and dry cleaner all of which supply goods or services that cannot be bought very easily online.

Strangely, while the amount of choice that we have to purchase goods has never been greater with the ability to buy something currently sitting in New York, Melbourne or Beijing a reality, something is missing.

As markets become global, it becomes much harder to support British brands, which will be bad news for the economy. In addition, that great pleasure of wandering aimlessly around a store selling something that you might just want is unlikely to be something that the next generation will be able to remember, let alone experience.

Comments

Not sure they were great physical retailers in the end

jimmercy | | Permalink

My first ever full time job was as a trainee accountant with HMV (Michael Jackson's Thriller, the First ever "NOW thats what I call music" will date me) so I have a small affection for them.

However as a shopping experience I found it awful in recent years.

True they were impressively stocked, in fact probably overstocked give the width of the Aisles between displays, add the rather poor lighting and time to check out and to me it led to a rather claustrophobic feeling.

Whether the store ambience was a result of deliberate mangement policy or lack of funds to upgrade I do not know, but they were very slow to react to the digital age and are now unfortunately reaping the rewards of that failure.

So RIP HMV I will be sorry your gone but more sorry for the staff who will entering a very difficult job market

Perhapds not RIP after all

jimmercy | | Permalink

Robert Peston of the BBC has an interesting angle on the story

http://www.bbc.co.uk/news/business-21023602

 

 

This is just the start

P.J.and Co | | Permalink

I think this is far deeper than merely HMV or Jessops (or Comet or Woolworths). What we are seeing is the end of the High Street. 

People want to drive to the shops, which out of town shopping parks allow. High parking charges in City centres are definitely driving shoppers away, and for most people public transport simply isn’t a desirable or convenient option. 

However, the sheer convenience of 24/7 online shopping is the major factor which is rapidly eating into the High Street’s market.  A few clicks online is faster than travelling into town, it’s cheaper, and the goods will be delivered to your door in a couple of days.

Given recent results I would not be surprised to see iconic names like M&S follow HMV in the next couple of years.

 

The VAT Doctor's picture

Inevitible

The VAT Doctor | | Permalink

Surely a pre-pack is on the cards?

Having said that, there is simply not enough of a market for the products they sell, unless they adopt a more realistic sales policy.  I am sure it was last year that I bought a Boxset (yes, I am a true man!!) online for £13 and it was on the shelf in HMV for £80.  And HMV still think that £20 is a reasonable price for a new blu ray, when seemingly the price is £30 for 5 a few months later. Crazy.

Over the years I have spent thousands on CD's, video tapes, DVD's, Blu Rays and for a lot of those years, HMV were raking it in. One of the reasons I understand is that HMV demands a limitless credit period from suppliers, meaning that if they buy a CD and have not sold it 2 years later, HMV will just raise a debit note, return the product and knock this off the outstanding bill.  This is hell record labels and wholesalers.  I am sure a lot of these suppliers are going to get some nasty surprises and may find that their debts are non existent, except for a box full of unsellable product that HMV will return to them.

Both the suppliers and the retailer have to realise that their respective margins need to be trimmed to make the volume sales these days.  Whatever people say, there is a market for physical products, but at the right price.  Millions of people don't download things.

I would say to the new owners that they should sell CD's and DVD's for £5 and blu-rays for £8 unless in a promotion, when the price would be cheaper.

The VAT Doctor's picture

email

The VAT Doctor | | Permalink

I have literally just been sent an email from HMV about what I can do with my 21,000 HMV points.  Kiss them goodbye I think!

Busier Than Ever

Philip Fisher | | Permalink

I passed an HMV store yesterday and it was packed. Perhaps the media hype has acted as a belated shot in the arm? Too little too late though.

If M&S were to bite the dust in 2015, remember where it was first suggested. Personally, I don't see that as on the cards, though yet more re-engineering might be a possibility before too long judging by the pre-Christmas performance?

 

Add comment
Log in or register to post comments
This blog

The world is overrun with blogs and tweets. While they serve a purpose, this column is something slightly different. You will not find out what the author had for breakfast or the colour of the socks he is wearing. You will not be pestered with tedious listings of every film, book, play etc that your correspondent has ever seen or his latest success or otherwise on the golf links.

What readers have come to expect from a writer who has been associated with AccountingWEB almost from its inception are objective but on occasion quite possibly opinionated articles about topics that might be of interest to accountants as people. The intention is to be simultaneously challenging, thought-provoking and entertaining.

Since the writer is a partner in the Human Capital team at BDO LLP these columns will frequently take on issues relating to taxation, business and government policy. For light entertainment, he is also London Editor of British Theatre Guide so there will be plenty of hints and tips about what to see and not to see.

He also regularly writes about technology for London Accountant and almost anything else under the sun for a variety of publications so there are always going to be odd surprises in store. Travel, art, books, theatre, sports and consumer issues are all likely to receive consideration in coming months - but so are taxation issues, thoughts on the latest technology and, inevitably, the activities of the Chancellor and HMRC.