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Scott Reid's business blog: The future of music retailing sounds good for HMV

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Published Date: 15 January 2009
I'm straining to remember my first album purchase. I know it must have been either the Pretenders' eponymous debut LP or Reality Effect by pre-Eurythmics line-up The Tourists.
Given the limited spending power of a first-year schoolboy in the early 80s, those were the only two pieces of vinyl in my possession for some time.

The one thing I do know for certain is that both 12-inchers were purchased from my home town branc
h of erstwhile music and stationery chain John Menzies.

At the time, Menzies had a virtual monopoly on the sale of the latest sounds - at least on many small-town high streets.

Those seeking greater choice would have to undertake a trip to the bright lights of Aberdeen, Edinburgh or Glasgow where you'd stumble across the likes of HMV, Virgin, a fledgling Fopp and Bruce's Records (how we lament the passing of that particular retail institution with its legendary "I Found It At Bruce's" carrier bags).

Wind forward three decades and we have a situation where a single name looks like dominating music and, these days, DVD sales – HMV.

Yes, Tesco and Co flog chart CDs and movies by the bucket load, but you'd hardly expect to find the Genesis back catalogue or that rare Springsteen import gracing the shelves of your local hypermarket.

Music fans that still get a buzz from thumbing through the racks or silver and black discs (vinyl has, thankfully, never completely gone the way of the dodo) need proper music shops (I'll leave aside the second-hand market where vibrancy still exists).

Until relatively recently there remained some choice.

Downloading, industry consolidation, online sales and the unstoppable march of the supermarkets have put paid to names such as Music Zone and Our Price.

Since the onset of the credit crunch we have also witnessed the sad demise of Woolies, sole purveyor of pop and rock in many a town centre.

So what of that industry survivor?

I don't know what to make of HMV, to be honest. On the one hand, it has stepped in twice now to rescue/cherry-pick from two collapsed rivals.

The first swoop was on Fopp, the Glasgow-based chain that got a bit carried away with its expansion plans a couple of years back forcing it to bring in the corporate undertakers.

HMV picked up a small number of outlets, and thankfully, has so far retained the Fopp branding and culture.

Last night, administrators for music, DVD and games retailer Zavvi (formerly Virgin) sealed a deal with HMV that will see the latter buy and convert 14 of the remaining branches.

Good news for some 270 Zavvi staff who will retain their jobs and become part of the HMV empire.

But lets not forget that hundreds of posts have already been axed with the closure of Zavvi outlets across the UK.

That includes a total withdrawl from Scotland's capital city following the shutting of outposts in the Gyle and Cameron Toll shopping centres and the earlier closure of a flagship branch on Princes Street. A question mark now hovers over Zavvi's remaining 68 outlets.

HMV appears to be riding high, then. This week's trading update highlighted a 3 per cent hike in festive sales at the core music and DVD business, although the Waterstone's book-selling arm preformed less well.

Interestingly, HMV also unveiled plans to enter the world of live music, in a joint venture with music company Mama Group.

The JV will own a string of familiar music and entertainment venues, including The Picture House in Edinburgh and Aberdeen's Moshulu. London's iconic Hammersmith Apollo, meanwhile, is set to be re-named the HMV Apollo.

Too big for its britches? That's one take if you welcome a bit more choice. But HMV is also putting its money where its mouth is rather than battening down the hatches in those chastened times.

As downloading and file-sharing threatens to wipe away the remnants of the traditional music retailing businesses, it may be a case of use it or lose it.

Scott Reid is The Scotsman's deputy business editor

BUSINESS CLUB: Read more blogs



The full article contains 704 words and appears in The Scotsman newspaper.
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1

kenbo9,

15/01/2009 14:21:00
HMV has one option - Evolve or dissolve
2

McP,

Cowdenbeath 15/01/2009 15:40:02
Good luck to HMV. We need at least one decent high street retailer to continue to preserve the rapidly outdated past-time of 'browsing'. It just ain't the same browsing an online store. And I've always found their staff helpful and really pleasant to deal with. Ultimately it comes down to price, but if HMV are smart they could come out of this as the dominant entertainment force on the high street.
3

Bruce's spider,

24/01/2009 08:54:35
I think the demise of competition in High Street music retailers is a microcosm of what's going on in the High Street in general. The loss of business to online retailers is hitting hard and is predicted to hit harder. As a former denizen of Edinburgh well do I remember the scope and diversity on offer in establishments like the Other Record Shop, The Music Exchange, The Last Record Shop, Asylum etc. By giving in to the herd-like move to buying online we are losing something precious. It used to be a joy to wander around from record shop to record shop, see what was on offer, chat to the staff, come across rarities and then the bus journey home sitting in expectation of what you were about to hear when you made it to your record/cassette/cd player. Its pretty much all gone now. Is anyone going to tell me that sitting at your computer jabbing away is any substitute for what we had before?

 

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