"The sign of things to come? Is this the end of music on the High Street?"
I must admit, this one stings a bit. Why? Well, on a selfish level, I am an avid music and film fan. This one affects me. This time, it is personal.
On a broader level, however, perhaps more so than any other high street casualty since the demise of Woolworths, there is a noticeable collective sadness over the uncertain future of a retail icon. As news of HMV's announcement to go into administration on Monday filtered through to the public, it was met not with indifference, but with an online outpouring of regret and disappointment. Thankfully, I was not alone. People were engaging nostalgically, even sharing purchasing anecdotes. This was certainly not the case with Comet. Of course, there were people dancing prematurely on its grave too, as is the sneering wont of some factions of the online community. However, this was not the overall impression given, and it is with this in mind that I am compelled to write.
Firstly, why was there so much affection palpably pouring from the keyboards and smartphones of the general public? Well, I offer this; it is at least partly out of guilt. We have all played our role. All of us. Well, probably nearly all of us. The thing is, it is no good mourning now without tacit admission of this fact; we have all been complicit in the demise of HMV. We treated it like the elderly relative that we never quite saw enough and, now receiving a terminal diagnosis, soon they might not be around for us to make up for it. Guilt is a rotten thing.
Why didn't we support it? Easy. The internet was all too easy an alternative. Why pay more for something when you could wait a couple of days to get it cheaper and delivered directly to your door, free of charge? How many times have you enjoyed the browsing experience of wandering around HMV, and then thought to yourself, 'I'll wait until I get home and I'll have a look to see how much it is online'? That's if you even waited that long.
Unfortunately, being undercut in price was not HMV's only obstacle and challenge. It wasn't just a case of price matching. It is well documented that the entertainment industry is the area where the impact of the Internet and digital age has hit hardest. The industry is travelling in uncharted territory and all previous business models have been rendered completely redundant. There has been a staggering realisation that sometimes people simply do not want to pay anything at all. Fighting illegal downloads has been an uphill struggle in its own right. Indeed, the battle with the Internet has been inherently unfair from day one. It's a rigged game, like a boxing match where one fighter has knuckle dusters and the other one has nothing but floppy foam hands. Knuckle dusters will win every time.
Can lessons be learnt, from a business perspective, for a potential buyer? Well, HMV's only substantial rival in days past (not including the long deceased Our Price - gone, but not forgotten), The Virgin Megastore, was bought out by Zavvi Entertainment Ltd in 2007. Their tenure at the helm of the chain did not last long. Announcing liquidation in 2008, they ceased to exist in the high street after 2009. They were bought out by the Hut Group, and since then they have gone on to enjoy a bit of an online renaissance under the Zavvi name. In fact, the Hut Group posted a 54% increase in sales growth for 2012 (including other online operations, such as, www.mybag.co.uk and www.allsole.com) and overall revenue of £66.2m. Amazon.com registered profits of $631m for 2011, whilst for the same period, HMV listed losses of £122m. This tells its own tale.
Being a physical presence in a material world on the wane is a tough one too. Since the millennium, there has been less of a slow trudge or canter, and more of a gallop towards an existence of intangible arts in the form of MP3, the Kindle/Ebooks and streaming films online. People have sought convenience of access and a way of de-cluttering their homes at the same time. This is unprecedented, and it has come at the expense of quality of product, but that is an argument for another time.
What is the answer? How do you fight this tide, when you have rent, electricity, wages, distribution and many other overheads to pay? How is it possible? Is it even possible? Is this it, before we wave off and continue our voyage into the digital world, with nary a look in the rear-view mirror? One thing is for certain, HMV cannot exist without losing branches and/or jobs. That is inevitable. Could they become more competitive than they are currently? Could they put up a stronger fight against the Amazon.coms of this world?
An option could be to scale down the number of stores and view the remaining branches as loss leaders for the online business. That could work. People would still have personal identification with the stores; a relationship and bond that cultivates loyalty, but the store would not be expected to be profitable in its own right.
This is wishful thinking though, and maybe a bit of denial too. If it truly is the end of HMV, then I only have myself to blame. Well, we have only ourselves to blame (I'm not going down alone. I am not Joan of Arc, here). Our greed, laziness and apathy was a lethal cocktail. If HMV has supped its last sip and gasped its last breath, it will be bad not just for the shareholders, the founders, the high street or the entertainment industry, it will be bad for each of us individually. When all is said and done, I am just happy that I am not alone in my sadness and hope for a saviour. Then, maybe then, all parties will up their game.
Follow Greg Wetherall on Twitter: www.twitter.com/gregwetherall