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HMV's Place on the High Street Belongs to Yesterday, and Sentimentality Won't Save It

Posted: 17/01/2013 00:00

How should we feel about HMV's troubles? If you listen to chief executive Trevor Moore, you should be nostalgic. The retailer's bloody head span under a ref shouting "nine" this week, calling in administrators and potentially knocking 250 stores and around 4,500 jobs out of high street business. Moore issued a rallying cry to the press in reaction, saying, "A high street without HMV is not as attractive as it is with one. We know our customers feel the same way."

Good luck with that, Trevor. The British consumer isn't loyal, and news of HMV's woes surprised no one. Now is a bad time to be selling boxes in shops.

While executives are still claiming there's a future for the chain, collapses of other high street specialists in the UK, such as Jessops and video game retailer GAME, draw a clear picture. It's all very well putting your hand on your heart and claiming town centres are worse off without these shops, but it's for nothing if the public and business climate don't grant them profits.

GAME was rescued by a banking consortium, as will be HMV, no doubt, but it's obvious the concept of buying a disc in a shop is one of yesteryear. Media store retail is an AK-47 tickling the sky with bullets as the ICBM fleet of "the internet" burns it from reality. If someone has the choice between paying £40 or £45 for the same product, they will pay £40. And that's that.

HMV couldn't compete with the tax wrangles of the likes of Amazon. Play.com managed by housing itself on Jersey, but the British government put an end to the loophole it exploited (Low Value Consignment Relief allowed for products under £15 to be sold to the UK VAT-free) in April 2012. Play confirmed last week it will stop selling directly to customers. Over 600 people on Jersey have lost their jobs as a result of the change in the law.

Amazon is under no such threat, at least not immediately. While governments in rich countries continue to try to snag the mega-seller on tax avoidance, the US company's Luxembourg structure in Europe allows it to keep corporation tax payments well down. There is no suggestion that laws are being broken. This is the new retail landscape for music, books, movies and games. And the place HMV holds in it is one structured from sentimentality.

High street media retail is on so many back feet it's fallen on its back. Its locations are expensive. Its music can be streamed. Its DVDs are cheaper elsewhere. Its range is pint-sized compared to its competitors.

How should we feel about HMV's troubles? Job losses are always awful, and now is a terrible time to face unemployment, but emotional pleas will makes no difference. How you feel doesn't matter. In an economy as brittle as biscuits, it's easy to see how an inconvenient, expensive service would fail. Trevor Moore can appeal to the UK consumer's sense of nostalgia all he likes; he isn't going to stop people wanting the largest choice of media as inexpensively as possible -- something only the internet can now provide.

 

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