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HMV has created this problem

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Post by The_Amber_Spyglass Sat Jan 08, 2011 5:16 am

And I have no sympathy for them.

HMV is the UK's largest, and now the only, high street music retailer. They reported a calamitous loss of profits this week with the intention to close some 90 stores across the country. Two years ago, their major competitor Zavvi (who were created a year before after being sold off by Virgin Group) went bust, leaving HMV alone. Yet their business practices have not changed to cope with their other competitors - the online market.

HMV's problem has always been this: they sell a large number of a very narrow range of items. So if you want to buy this week's generic pap produced by Simon Cowell, you'll find more copies than the town will ever sell in a century. But if you want something a bit out of the ordinary, classical music, jazz etc, their music CDs are always charged at full price and it is in this area that they are losing out. If people can get those CDs from cdwow, play.com, amazon.co.uk for under £10 why would they spend £15 in HMV? They have driven out the competition and restricted the market.

I would be interested to know how individual independent high street retailers are fairing in comparison.


Last edited by The_Amber_Spyglass on Sat Jan 08, 2011 6:18 am; edited 1 time in total
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Post by TexasBlue Sat Jan 08, 2011 5:21 am

CD's are a dying entity, I'm afraid. But as long as there's a demand, they'll be around but not in mass. MP3 has ruined it.
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Post by The_Amber_Spyglass Sat Jan 08, 2011 6:21 am

CDs are still selling well on-line, but it is how HMV has restricted their own custom base that has led to reduced sales on the High Street.
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Post by TexasBlue Sat Jan 08, 2011 11:27 am

Yeah, due to my location (BumFuck, Egypt), I buy a lot of stuff online.

I never heard of HMV. Are they like Best Buy here in America? They sell everything from video games, cd's, dvd's, refrigerators, stoves, stereos, etc.
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Post by i_luv_miley Sat Jan 08, 2011 2:05 pm

I went into some HMV's when I was in England back in 1988. I think I bought a Kylie cassette... Snicker I remember there were a bunch of the shops too. I also recall seeing advertisements in all the music magazines during the 90's too. Another "chain" that has bit the dust is Tower. I went into one in Picadilly (I think?) and it was awesome! I could have spent all week in there. It was massive! When I came back to America, I found out that the chain existed here too, but only in select cities. Hell, even as recently as 2003, I would go into one in Washington DC, when I was there. It was an excellent place to actually buy imports (i.e. the good UK stuff that didn't get released here) and singles, etc. instead of having to get everything online. I liked that. But alas, a year or two later, they ceased to exist. Kick Can
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Post by dblboggie Sat Jan 08, 2011 2:07 pm

The_Amber_Spyglass wrote:And I have no sympathy for them.

HMV is the UK's largest, and now the only, high street music retailer. They reported a calamitous loss of profits this week with the intention to close some 90 stores across the country. Two years ago, their major competitor Zavvi (who were created a year before after being sold off by Virgin Group) went bust, leaving HMV alone. Yet their business practices have not changed to cope with their other competitors - the online market.

HMV's problem has always been this: they sell a large number of a very narrow range of items. So if you want to buy this week's generic pap produced by Simon Cowell, you'll find more copies than the town will ever sell in a century. But if you want something a bit out of the ordinary, classical music, jazz etc, their music CDs are always charged at full price and it is in this area that they are losing out. If people can get those CDs from cdwow, play.com, amazon.co.uk for under £10 why would they spend £15 in HMV? They have driven out the competition and restricted the market.

I would be interested to know how individual independent high street retailers are fairing in comparison.

First a question, what does "high street retailer" mean?

As for HMV, this is what happens when you ignore (or are unaware of) the competition. Just because they were the biggest, doesn't mean they were the smartest. One ignores the power of competition at their own peril.

But how have they driven out the competition, if it is the competition that is taking their market share and forcing them to contract?
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Post by The_Amber_Spyglass Sun Jan 09, 2011 4:53 am

dblboggie wrote:First a question, what does "high street retailer" mean?
They sell their goods in shops located in a town or city's main shopping centre.

dblboggie wrote:As for HMV, this is what happens when you ignore (or are unaware of) the competition. Just because they were the biggest, doesn't mean they were the smartest. One ignores the power of competition at their own peril.
On the high street, there has been no competition for two years.

dblboggie wrote:But how have they driven out the competition, if it is the competition that is taking their market share and forcing them to contract?
In the 1990s Virgin bought out Our Price. Until then we had Virgin Megastore, HMV and Our Price. Virgin sold up to Zavvi two years ago who immediately started to play HMV at their own game. HMV undercut Zavvi on the majority of their goods in order to beat Zavvi. As a result, Zavvi went bust. There is now no choice on the high street for music and film and online retailing has expanded in the last few years, as has supermarkets selling CDs and DVDs. HMV still thinks it can charge £15 for a CD that Amazon can sell much cheaper than that. Aside from a select few examples that they sell very cheap (core stocks of DVDs and CDs), most of their stuff is overpriced. Unless you are looking for a bargain on films, you are not likely to want to go in there. Basically, they are not adapting to changing technology around them.

I found this interesting article on how it has worked itself into a dead end: http://www.mcnallyconsulting.co.uk/?p=716
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Post by dblboggie Sun Jan 09, 2011 11:48 am

The_Amber_Spyglass wrote:
dblboggie wrote:First a question, what does "high street retailer" mean?
They sell their goods in shops located in a town or city's main shopping centre.

Thanks. I thought that might be it but wasn't sure.

The_Amber_Spyglass wrote:
dblboggie wrote:As for HMV, this is what happens when you ignore (or are unaware of) the competition. Just because they were the biggest, doesn't mean they were the smartest. One ignores the power of competition at their own peril.
On the high street, there has been no competition for two years.

But as HMV is learning, the competition is not limited to the high street. It would seem their retail strategy is actually driving market share online.

The_Amber_Spyglass wrote:
dblboggie wrote:But how have they driven out the competition, if it is the competition that is taking their market share and forcing them to contract?
In the 1990s Virgin bought out Our Price. Until then we had Virgin Megastore, HMV and Our Price. Virgin sold up to Zavvi two years ago who immediately started to play HMV at their own game. HMV undercut Zavvi on the majority of their goods in order to beat Zavvi. As a result, Zavvi went bust. There is now no choice on the high street for music and film and online retailing has expanded in the last few years, as has supermarkets selling CDs and DVDs. HMV still thinks it can charge £15 for a CD that Amazon can sell much cheaper than that. Aside from a select few examples that they sell very cheap (core stocks of DVDs and CDs), most of their stuff is overpriced. Unless you are looking for a bargain on films, you are not likely to want to go in there. Basically, they are not adapting to changing technology around them.

I found this interesting article on how it has worked itself into a dead end: http://www.mcnallyconsulting.co.uk/?p=716

I'm not a retail music buyer, and never really have been, so I have to say that I'm not really up to speed on the competitive landscape of this market. But it seems to me that retail music outlets here in America have been shrinking steadily over the last decade or so. I can recall, back when I was living in Los Angeles, some of the big retail music outlets first consolidating (mergers and buyouts) and then folding altogether. Maintaining a brick-and-mortar (our term for high street retailer) retail presence is a lot more expensive than maintaining an online presence and if they don't adapt to a changing competitive landscape, they go by the wayside.
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Post by The_Amber_Spyglass Sun Jan 09, 2011 12:01 pm

HMV is actually our oldest music retailer and the reason they have been successful is that they have adapted through time. Unfortunately, it seems that current management is stuck in the 1980s where music sales are concerned.

I'm obviously no industry specialist but I rarely visit HMV these days because I know I will get what I want online and cheaper. Though my tastes are broadly commercial, when I do find something out of the ordinary that I really like, I know that HMV won't be selling it at a competitive price.

I think their may now be a market for getting back to their roots. Stick with Music and film. Dispense with mobile phones and electronics and perhaps provide a music experience. When I started buying music about 25 years ago, you used to be able to go into a booth and listen to samples from certain albums to see if you really liked it. Over the years, HMV has become like a jumble sale, or a warehouse outlet.

ILM commented on imports. HMV used to be the best place for that but they don't seem to do that any more or if they do, they charge a premium. There is a small time Canadian band I was listening to for a while. HMV would once have been the first place I thought of for such imports but when I checked with them, yes they had their albums but they charged £16 for them. I ordered the first CD direct from Canada and even with postage abroad, I still got it cheaper.

You might have heard of them Tex, they are called "Default". produced by Nickelback but their stuff is a lot less commercial and more diverse.
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Post by TexasBlue Sun Jan 09, 2011 12:15 pm

Nope, never heard of them. You younger folks listen to different stuff. My Canadian bands are April Wine,, Triumph and Rush (not Limbaugh).
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Post by The_Amber_Spyglass Sun Jan 09, 2011 12:31 pm

Well I've heard of Rush... can't say I know the others.
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Post by TexasBlue Sun Jan 09, 2011 12:43 pm

The_Amber_Spyglass wrote:Well I've heard of Rush... can't say I know the others.

That's the generation gap working. Big Grin

For the record, I'm a fan of Brit music big time. Pink Floyd, Zeppelin, Nazareth, Iron Maiden, Motorhead, Queen, etc.
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Post by The_Amber_Spyglass Sun Jan 09, 2011 12:51 pm

I bet you still haven't shared a stage with Brian May though Very Happy
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Post by TexasBlue Sun Jan 09, 2011 1:02 pm

I don't get it.
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Post by The_Amber_Spyglass Sun Jan 09, 2011 1:17 pm

I shared a stage with Brian May. You've forgotten the conversation last summer?
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Post by TexasBlue Sun Jan 09, 2011 1:47 pm

Oh yeahhhhhh. I'm so brain dead.

That dude is a tall guy. Or it seems so from video I've seen of him.
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Post by Guest Sun Jan 09, 2011 3:01 pm

I tried for years to find Serge Gainsbourg's 1971 album; "Histoire de Melody Nelson" in a high street music shop (even our price) but asking the HMV staff if they had it was like asking them to tickle my balls (they looked confused and slightly scared) - i had to travel to one of those weird towns with music shops down back alleys, run by a guy called lenny with far too many tattoos to find one

when the internet came along - hey presto - i could find it on tons of music sites (both cd format and mp3)

i'm amazed HMV still exits - if they continue to pretend that music retail hasn't changed then surely not much longer before they disapear

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Post by i_luv_miley Sun Jan 09, 2011 3:25 pm

The_Amber_Spyglass wrote:ILM commented on imports.
Back in the 90's, imports were a very contentious issue with me - especially UK imports (and especially that damn Kylie! Twisted Evil )... As I said, I've always been a pop fan and it seemed to be that in about 1992, the kind of music I had been listening to throughout most of the 80's suddenly disappeared. Coincidentally, it was about that time that grunge and rap (gag!Razz) took over here in America. What I quickly found out that was, a lot of what I'd been listening to was UK-pop, which for whatever reason was no longer being released in America at all. So from that point until the Internet (circa 1997) I had to make due with import shops - which were dwindling - to find my music. It was a miserable time to be a pop fan IMO. Luckily the Internet (Amazon, HMV, etc) has made things infinitely better as far as being able to get the music. But even now, unless one already knows about it (i.e. an American who knows about UK music), you most likely wouldn't even know it exists - as the "markets" seem to only cater to themselves now. IMO, the music industry is pretty much dead now by their own stupidity. Razz
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Post by The_Amber_Spyglass Sun Jan 09, 2011 3:34 pm

I agree. The sooner the leaches known as "Record Labels" bite the dust the better.
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Post by TexasBlue Sun Jan 09, 2011 3:45 pm

Another place to get import CD's is Cd Universe. I shop there 50-50 along with Amazon.

http://www.cduniverse.com
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