24/01/2013 05:25 GMT | Updated 24/03/2013 05:12 GMT

Mourn Not HMV

In the early 19th Century the Luddite movement swept across Yorkshire and smashed threshing machines, angry that their jobs had been made redundant by a technological innovation that was thrusting Britain into the Industrial Revolution. If the Luddites had modern analogues, this week, following news of the peril of media retailer HMV, they would be angrily uninstalling Spotify and iTunes from their devices, the more radical among them may even be smashing the iPhones and laptops of Spotify Premium subscribers or violently intercepting Amazon deliveries.

But for the 4,000 employees of HMV and their dependents, who have been put in an awful situation through very little fault of their own, the potential demise, and certain slimming-down of HMV should be greeted with open arms; it demonstrates the important triumph of more efficient, more effective technologies and business models for distributing music than traditional in-store retailers. HMV is no longer an efficient provider of music, or of any other media to customers, but it could very easily become something else.

Online shopping and deliveries have cheapened and sped up the process of acquiring physical copies of music, Ebay and Amazon's wide range of retailers can provide specialisation, depth, and lower prices, in a way that large chains like HMV or dusty local record shops never could. Those who don't need physical copies, CDs being awful for the environment after all, don't need to wait for deliveries; they can download from iTunes, the market leader, or any other online digital retailer, like Amazon.

That's only if you desire to own music at all, millions of users are turning away from that model, realising that there is no need to own music in order to listen to it. Spotify and Grooveshark have surged in popularity in recent years, with the former hitting 20 million users in December 2012.

The potential spin-off benefits of HMV, like being able to browse products have all but been eliminated, or at least trumped by apps like, or by the capacity of services like Youtube and Spotify to allow users to listen to music easily. There is now no need to buy music to try it. HMV may have a wide range of albums for £5 in their regular monthly or weekly sales. Spotify can let you listen to an enormous chunk of the music made throughout history for £5 a month.

The exciting developments in music streaming and download services have been ignored by HMV and other music retailers. The hipster denizens of independent, vinyl-selling, record-stores may label them as soulless or inferior in quality, but they have become a big winner with consumers, and with artists, who a few years ago were trapped between poor CD sales and widespread, uncombatable piracy. HMV never took steps, like it's former property Waterstones, to embrace the digital, its venture into technology came with attempts to retail luxury, music related electronics, with limited success.

HMV can no longer effectively provide the services required of it. It now represents an outmoded business, anachronistic in the modern era, and also an inefficient drag on the British economy, which no longer needs a country-wide retailer of CDs, gadgets, and overpriced video games, and certainly no needs dinosaur businesses chewing up capacity.

For its survival HMV, and to a lesser extent Deloitte, the professional services firm running HMV until it finds a buyer, is banking on support from record labels and film studios, along with DVD distributors, who like the retailer being open. Other people who like HMV being open are big music fans, and bored husbands on shopping trips.

To attempt to capitalise on this HMV could change its business, whilst retaining its brand. Two HMV branded locales in Edinburgh point to a potential way forward. Edinburgh's HMV Picturehouse, a live music venue, and the large HMV store on Princes Street, which hosts a video gaming lounge.

HMV could instead move into a luxury venue for enjoying music, films and games, it could feature bars or coffee shops, show live music or non-mainstream cinema, and retail specialist, niche, and local music. There is certainly a gap in the market for something like that, but not for CD retailers; HMV is like the last battleship in a world of nimble, digital destroyers. It can adopt and become a museum or sink under the weight of its own selective technophobia.