Early on in this year 2013, we lost the UK and Ireland wide chain HMV. Sales had gone down and shares had plummeted to the point of a surprise receivership for many. But was it really a surprise? HMV will return thanks to the Hilco package in four stores (Limerick, Liffey Valley, Henry Street and Dundrum) but will it have what it takes this time to survive? Downloads have been on the rise for some time and DVDs are at the exit-point with the likes of Netflix.
The Collegetimes staff were asked and approximately 60% said they believed it would survive. So this dandy article intends to look at the reasons why and why it might not live to see the future.
NO
The 2000s saw the continual rise of illegal and legal downloads over the purchase of physical format (CDs, Vinyl, Tape, etc.). The market has expanded so much so that it is based around digital sales now. You are unlikely to find many places where you can buy CDs (save Tescos and a few in Xtra Vision) and even DVDs are becoming more of a rarity. Since HMV mostly represented the music world however, let’s stay focused on some of the statistics associated with it.
- While in 2008, 123 million units in volume of CD albums sold in the UK, this number had declined to 69.4 million by 2012.
- Digital sales of albums meanwhile rose. There were 10.3 million units sold in 2008 in the UK but 30.5 million in 2012.
- The overall trend has shown that among all formats, album sales have declined since 2008 (133.6 m). In 2012, 100.5 m albums sold.
- In the figures of singles however (7”, CD, digital), there has been an increase from 115.1 m volumes in 2008 to 188.6 m in 2012. This of course manifested in digital sales mostly (183.3m of those in 2012 being digital).
Recessionary times have obviously boosted this trend but perhaps people can simply no longer fight the tide. Digital is in and HMV will feel the effects regardless of whether it makes a strong come back or not. Last Christmas, there was a decline of 13.5% in total sales and a reported loss of 37.3 m pounds. Clearly, there was too much going against it and why should that change?
YES
On the other hand, there are plenty of reasons to believe that HMV may survive when it returns. Firstly, there are only four stores opening to begin with and they will have lower rents than before. Financially, their objectives will be a lot easier to meet and since there will be less stores (like HMV and of HMV), this means they should get a wider berth of attention from the public. Xtra Vision is of course in receivership and should it close down, HMV will be the only place (save a couple Golden Discs and rare stores like Tower Records) to search through a physical library of DVDs and CDs. This leads us onto how the people feel.
While many have gone on to abandon the physical format of movies and music altogether, there are still some of us foolhardy hopefuls who believe there is a place for a case. The closing down of HMV proved there was still a sea of affection for them. There were even talks of Elton John hosting a concert to raise funds to save it. Indeed, it is central to the music industry as a whole and people would like it to remain even if they are not constant customers of CDs. It will ultimately come down to them of course to determine whether it goes in the long-run. Nostalgia may reinvigorate the chain but we can’t necessarily count on it through 2014 and beyond.
Verdict
While I would love HMV to survive, I think their renewal is a mere short-term defence. Just as sea barriers cannot indefinitely hold back the waves of erosion, so too can the Hilco package not permanently detain the new generation of the digital world. We can point the finger and blame the likes of will.i.am and other tacky producers, but the fact of the matter remains that the general public are too lazy and cheap and to an extent, clever, to go to HMV. So enjoy your Kesha downloads, but don’t expect to ever hear the value of a revolving record crackling out the classics of a by-gone age again.
