HMV in deeper water if record com­pa­nies are man­ning lifeboats

Bray People - - LIFESTYLE - WITH JIM HAYES

N EWS THAT a posse of ma­jor record la­bels is sad­dled up and rid­ing to the res­cue of HMV looks good for the 4,350 em­ploy­ees of the trou­bled chain, but I wouldn't bet on it.

It's re­ported that a con­sor­tium that in­cludes Uni­ver­sal and Warner is one of the fron­trun­ners con­sid­er­ing buy­ing out the mu­sic and DVD re­tailer who went into ad­min­is­tra­tion in the UK, and called in the re­ceiver in Ire­land last week.

In the grand scheme of things, head­lines about HMV re­fus­ing to hon­our gift vouch­ers were lit­tle more than a dis­trac­tion as the mu­sic in­dus­try woke up to the very real threat that their last ma­jor re­tailer could go to the wall.

HMV's his­tory dates back over 100 years, but record com­pa­nies are not band­ing to­gether in an at­tempt to bail out the chain out of benev­o­lence or a sense of her­itage. It's pure eco­nom­ics.

HMV's tra­di­tional model is one of the last for­ti­fi­ca­tions against the whole­sale dis­count­ing car­ried out by on­line giants such as Ama­zon and su­per­mar­kets like Tesco that re­sults in poor re­turns for record la­bels.

Some have been quick to blame il­le­gal down­load­ing on the demise of HMV, but while piracy has un­doubt­edly contributed, it's not the whole story. With the rise of iTunes and sim­i­lar sites, CD sales are down and fall­ing rapidly and HMV has strug­gled to com­pete with on­line re­tail­ers and su­per­mar­kets for a slice of what re­mains of the CD mar­ket.

Hopes that DVD and ' boxsets' sales would make up for the mu­sic slump have all but dis­ap­peared with faster broad­band and the growth of Netflix and other ser­vices.

It's easy to be wise in hind­sight, but HMV were in some ways the ar­chi­tects of their own down­fall. Clearly, the old idea of a record shop with li­brary shelves of CDs, DVDs, games and books could not alone stem the tide as con­sumer habits changed, driven by the con­ve­nience and im­me­di­acy of on­line buy­ing or down­load­ing.

If HMV does sell, the new own­ers will have to think out­side the box. Stores will have to of­fer some­thing that can't be eas­ily ac­cessed on­line if they are to sur­vive.

That's the chal­lenge fac­ing the con­sor­tium of record com­pa­nies if they seal the HMV deal. Un­for­tu­nately, their track record on think­ing out­side the box doesn't in­spire con­fi­dence.

Hopes that DVD and 'boxsets' sales would make up for the mu­sic slump have all but dis­ap­peared with faster broad­band and the growth of Netflix and other ser­vices.

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