Music&Data

A few years ago HMV hit the rocks and the creditors were called in. It didn’t take long for the industry to rally round the stricken retailer and provide solutions to keep them afloat. One key change which is never mentioned is that unilaterally the stock in HMV is on consignment. Surely the way that it should have been anyway, but still, a big change for the labels.

Anyway, I recently appeared on BBC 5 Live talking HMV and I wanted to share my wider thoughts. These are my call notes, not an essay written for a blog, so bare that in mind!

Is it inevitable that HMV goes?

Well, the one size fits all approach to entertainment retail has had the writing on the wall since Our Price popped its clogs in 2004. HMV being the last bastion standing where once Tower Records, MVC and Virgin inhabited the market. Fundamentally the brand isn’t the problem but the concept it appears fatally flawed. Media consumption trends are shifting, the digital era is upon us and conversely whereas HMV is struggling, the independent more boutique retail sector troops on.

How significant is HMV to the music industry these days?

Well to be stocked in HMV suggests a degree of national interest. Or it should. Once upon a time you could ‘force’ your record into HMV, begrudgingly. A lot of our artists are somewhat more specialist interest however a number of our fantastic artists ARE stocked there and as with any sector, having 115 potential outlets for your product removed from the supply chain is not a good thing. The reality is though HMV is not the home of crate-diggers. It exists for convenience and for a lot of music and indeed film fans, streaming is about as convenient as you can get. For those wanting physical music product, Amazon does a pretty good job too and often cheaper. 

What have independents done that HMV hasn’t to create a viable business model?

In a way comparing HMV to the indies is a little like comparing a regional newspaper to a national. They do the same thing but they exist in different spheres. Fundamentally the independent retailers have their ears closer to the ground innovating their product range with interesting new products. Point in case – Christine and the Queens, or even Sleaford Mods – two examples of artists that you I can’t imagine ever getting into HMV had it not been for the fantastic job independent tastemaker retailers did promoting them to their customer base.  The labels value working with these type of retailers because it’s about a lot more than a sale, it’s about credibility. Now that’s maybe something that the big film studios need to worry about but it’s certainly something that any independent label worth their salt will pursue relentlessly.

HMV have attempted to compete with online retailers without offering a particularly compelling USP. To frame that somewhat the independent retail sector are often unable to compete on pricing but are able to offer unique formats… special coloured vinyl for example, or signed products and are often selling those products to a dedicated customer base that’s been garnered over some period of time.

Prior to being at Earache I worked for a major music distributor for a number of years, representing a group of independent labels. Superserving the independent retail community was key to the success of the labels because of that credability issue too.

What is Earache’s Relationship with HMV?

So Earache is a 30 year old independent record label based in Nottingham. As purveyors of fine guitar orientated music we are still a physical heavy operation, streaming and rock are famously ill matched right now. HMV stock a number of our titles on CD and Vinyl.

Would it be a shame if HMV did disappear and why?

But, there’s the twee answer to this and then the reality. The twee answer is that it’s an iconic British brand that is as familiar on the high street as Woolworths is. Now, as that sentence cancels itself out we are now left with the reality, flagged to me earlier by Jon Tolley of Banquet Records in Kingston: that is removing the single biggest retail customer from the market could potentially result in fewer labels committing to commercial physical releases in general. It may become feasible that the only place you can get a CD is Amazon or the artists webstore, meaning that the indies get cut out of the equation

Take the market leader out of the equation and questions will inevitably arise about the entertainment industries hunger to continue supply to such stores.

We know of course that vinyl does well, Earache has somewhat built a modern business on it, but the overall concept of the vinyl revival is somewhat debatable – ERA published a study earlier this year which stated that somewhere in the region of 72% of the vinyl market can actually be attributed to a relatively small group of consumers. It’s undeniable the bug has spread though but I don’t know that people necessarily identify HMV as being their go to place for LPS. On top of this BPI figures show that the vinyl revival is plateauing… after several years of growth, that’s not a huge surprise.

31% of all physical music in the UK in 2018 is HMV.

23% of all DVDs and Blu-Rays were HMV.

The market for DVDs fell 30% this Christmas – Netflix effect.

CDS are becoming harder to sell.

Take away those two items and what’s the core business got left?

Kim Bayley from the Entertainment Retailers Association points out that the physical entertainment market is still worth circa £2bn and accordingly I concur with her that it’s conceivable the brand will live on. More importantly I suppose I find it inconceivable that the brand disappears…