{"id":7482,"date":"2019-01-03T15:44:13","date_gmt":"2019-01-03T15:44:13","guid":{"rendered":"https:\/\/dev.adambowie.com\/?p=7482"},"modified":"2019-01-03T16:10:23","modified_gmt":"2019-01-03T16:10:23","slug":"hmv","status":"publish","type":"post","link":"https:\/\/dev.adambowie.com\/blog\/2019\/01\/hmv\/","title":{"rendered":"HMV"},"content":{"rendered":"\n
\n\"His<\/a>\n<\/div>
Spotted in Soho in 2014<\/figcaption><\/figure>\n\n\n\n

A few thoughts on the new difficulties faced by HMV. <\/p>\n\n\n\n

In part this is response to some utter nonsense I\u2019ve read online, and some of the news reports surrounding HMV heading into administration for the second time in five years. <\/p>\n\n\n\n

There are undoubtedly structural problems with how music is sold in 2019, but I think there are multiple reasons for HMV\u2019s failure \u2013 regardless of any mistakes or management decisions taken by their owners. <\/p>\n\n\n\n

I\u2019ve tried to examine each of these in turn. <\/p>\n\n\n\n

Music Models<\/strong> <\/p>\n\n\n\n

We\u2019re obviously moving away from a music ownership model to a rental model, although I\u2019m still unconvinced that this is sustainable in the longer term.  <\/p>\n\n\n\n

Firstly, it is not yet profitable for the businesses that are doing it. OK \u2013 that might not matter for Apple or Google who have vast income streams from other parts of the business that can prop them up, but it does matter for companies like Spotify and Tidal. Indeed, even Apple or Google will shut down a division that simply doesn\u2019t make sense after a while.  <\/p>\n\n\n\n

The lack of profitability might be a temporary thing, and perhaps the business models will improve over time. But let\u2019s put it this way, I wouldn\u2019t even begin to attempt to get into the streaming market right now. And will Apple or Amazon at some point stop even selling downloads? (Thank goodness for Bandcamp!) <\/p>\n\n\n\n

However, as I\u2019ve argued previously, the current music rental model simply doesn\u2019t work for a large proportion of the population.  <\/p>\n\n\n\n

Consider my father. He buys or gets given one or two CDs a year. In all probability any discs he buys come from a supermarket \u2013 for him, the only easily accessible physical outlet for music now. He listens to those CDs a fair amount. But there\u2019s no way on earth that he\u2019s going to spend \u00a3120 a year on music. Nor are an awful lot of people. Certainly, Spotify has a free tier, but that\u2019s ad-funded, and my father no more wants to hear ads interrupting his music than anyone else does. The alternative is that perhaps the majority of the population stop purchasing music altogether!  <\/p>\n\n\n\n

The most recent RAJAR Midas survey<\/a> suggest 24% of the population listen to on demand music services, while Ofcom\u2019s Technology Tracker<\/a> suggests it\u2019s closer to 29%. Either way, that\u2019s 70% of more of the population who don\u2019t use such a service. <\/p>\n\n\n\n

So, we need some level of music ownership. That means an ability to buy music. <\/p>\n\n\n\n

Lazy Reporting<\/strong> <\/p>\n\n\n\n

One of the things that frustrated me was a report that used vox pops of various people standing outside the Oxford Street branch of HMV explaining how they hadn\u2019t bought a CD in years and that they streamed everything now. <\/p>\n\n\n\n

Vox pops are, to my mind, nearly always useless. They are completely unrepresentative of the population, and more often than not, just colour a report to say what they the reporter hoped that they\u2019d say. We never know how many vox pops were gathered and which ones made the cut. Think of it this way, if you stood in the street ahead of election day, asked two people how they were likely to vote, and got the same response: \u201cI\u2019m voting Green!\u201d You wouldn\u2019t then go on air and suggest that the Greens were going to win with a landslide (Unless you were in Brighton). <\/p>\n\n\n\n

Physical sales have undoubtedly fallen as streaming revenues have risen, but the IFPI Global music report 2018 still attributed 30% of recorded music revenues coming from physical sales (CD and, to a very small extent, vinyl) compared with 38% for streaming and 16% for digital.  <\/p>\n\n\n\n

In the UK, we know that sales are falling. The BPI says<\/a> that 2018 saw 32m CD sales down 9.6m year on year. But if 70% of the population don\u2019t have an account with Spotify or its peers, then there still needs to be a way to allow listeners to buy The Greatest Showman soundtrack or George Ezra\u2019s latest CD (the biggest two albums of the year). <\/p>\n\n\n\n

Physical music sales are still worth \u00a32bn, and HMV accounts for 31%<\/a> of all physical music and 23% of DVDs and Blu Rays. <\/p>\n\n\n\n

So, there are<\/em> plenty of people still buying CDs. Indeed, I note that recent deluxe boxsets from both The Beatles and Kate Bush are only<\/em> available in physical form. The streaming versions of both sets have significantly fewer tracks. That said, these are clearly aimed at collector\/completists and the cynic might think that the labels are wringing as much cash as possible out of those now distinctly middle-aged fans. <\/p>\n\n\n\n

Most people aren\u2019t <\/em>streaming their music, and while they don\u2019t buy as much as the keener music fans, these are consumers who still need to be reached \u2013 selling rather than renting them music. <\/p>\n\n\n\n

The Vinyl Fallacy<\/strong> <\/p>\n\n\n\n

Hitherto, the best place to buy music has been a record shop. Yes, there\u2019s Tesco. And yes, there\u2019s Amazon. The former has a very limited offering \u2013 and no, I don\u2019t really care about the cool vinyl selection your big Sainsburys superstore has. That\u2019s \u201ccool\u201d because it knows its customer. In the DVD aisle you\u2019ll find boxsets of Airwolf and The Persuaders. All of these are because they’re serving a generation that got old, and buys these things for nostalgia reasons.\u00a0\u00a0<\/p>\n\n\n\n

The vinyl resurgence is all very well, but while the percentage increases might have been massive (the growth was much smaller in 2018), but they are still dwarfed by CD sales. Don\u2019t just use revenues as your comparator, since vinyl invariably costs more than the equivalent shiny disc.  <\/p>\n\n\n\n

A record shop in 2019 can\u2019t really just exist by tapping a niche market like vinyl. Perhaps in a big city like London, but London has all kinds of shops that are unsustainable outside big cities. For example, there are shops where you can buy film processing gear. That doesn\u2019t mean a largescale resurgence in film photography is likely. These places instead serve a diminished marketplace, but there are so few other outlets left that they mop up enough business to survive. <\/p>\n\n\n\n

Music is a mainstream art form, and it needs to survive in a manner that is accessible to all, regardless of their access to big cities. More and more, that probably does mean a combination of Amazon and supermarkets, with niche outlets filling a small hole. <\/p>\n\n\n\n

The Loss of Curation and Serendipity<\/strong> <\/p>\n\n\n\n

The real challenge for the true mainstream audience is music discovery. It\u2019s all very well having a Spotify playlist, but for the \u201c70%\u201d who don\u2019t use a streaming service, they\u2019re probably relying on the radio (90% weekly reach recall), or perhaps mainstream TV shows like Graham Norton or The One Show.  <\/p>\n\n\n\n

I\u2019ve long argued that computer algorithms are still no match for a carefully curated shop display or the simple act of stumbling over something you didn\u2019t even know you wanted. (A good radio station and\/or presenter of course is massively valuable too.) <\/p>\n\n\n\n

One of the joys of a record shop, is the stumble-upon <\/em>factor. You look at a shelf of new releases, or a thematic display somewhere, pulled together by someone who likes music. And in there, you find something that you didn\u2019t know existed, or didn\u2019t even know that you wanted.  <\/p>\n\n\n\n

I\u2019m not na\u00efve.  I know that stores sometimes charged for those shelf-end displays or front of store racks, but either way, I can\u2019t begin to think about how many times I just found something I didn\u2019t know I\u2019d come in for just by seeing it on a rack. <\/p>\n\n\n\n

Compare and contrast to every digital offering I\u2019ve used, where the search box is the primary mechanism for digging into their warehouse. Yes, Amazon has more music than I can listen to in a lifetime, but they display it abysmally.  If I know what I\u2019m looking for, I can [probably] find it. But nobody \u201cbrowses\u201d at Amazon.  <\/p>\n\n\n\n

I recall spending many a lunch hour at the Oxford Street HMV browsing film soundtracks looking for obscurities and just seeing what they had. You\u2019d find an Ennio Morricone compilation you didn\u2019t know about or whatever.  <\/p>\n\n\n\n

Over on Amazon, I can see what\u2019s selling the most, but that\u2019s about it. They probably have that exact same compilation, but unless I already know about it, I\u2019m never going to find it.  <\/p>\n\n\n\n

Maybe Spotify might lead me to it somehow. Maybe not. I find that most algorithmic playlists are far too constrained musically and don\u2019t explore the wider breadth of what\u2019s out there. You like this guitar-based rock-band? Here\u2019s another guitar-based rock band.  <\/p>\n\n\n\n

Browsing is one of nature\u2019s delights, and it just doesn\u2019t work on the virtual shelves.<\/p>\n\n\n\n

The British High Street<\/strong> <\/p>\n\n\n\n

We all know that the UK high street is changing rapidly. In some parts of the country, they\u2019re becoming ghost towns. When a larger store closes down, smaller stores follow, and shops get boarded up. <\/p>\n\n\n\n

On the other hand, store rents seem to sail inexorably upwards. The high price of rents is often quoted as a reason for store closures.  <\/p>\n\n\n\n

It\u2019s never entirely clear to me how this can be. There\u2019s surely a dynamic market, and a landlord you would think would prefer something rather than nothing.  <\/p>\n\n\n\n

But inevitably we hear that the real issue is that Britons are spending more money online and no longer shopping on the high street as they once did. Every year, the volume of shopping online creeps upwards, and big brands either fold altogether, get sold to Sports Direct owner Mike Ashley, or announce that they closing a number of branches.  <\/p>\n\n\n\n

However, there are still some things that don\u2019t quite add up. <\/p>\n\n\n\n

Over Christmas we heard that online powerhouse Asos had suffered from severe discounting across the market, which led to poorer than expected profits.  <\/p>\n\n\n\n

And while online sales are indeed rising, reaching 21.5% of all retailing in November 2018, that still leaves an awful lot of sales that are not <\/em>online.  <\/p>\n\n\n\n

This suggests that even with a retailer whose majority of sales are in-store and not online, the growth of online can put the store part of the business into loss even though it still accounts for the majority of sales. Indeed, the volatility of some businesses to even small declines in sales would seem to back that up. Sometimes that\u2019s because they\u2019ve over-expanded and borrowed on the basis of sales that only head upwards. Or maybe it\u2019s because the owners have grabbed a lot of money out the business… <\/p>\n\n\n\n

Anyway, this is just another reminder that next time a clothes brand on the high street shuts down, and you see a vox pop on the news with a contributor saying that, no, they don\u2019t use the high street any more, and that they only shop online for clothes, in fact 78.2% of textile and clothing sales are not <\/em>online. <\/p>\n\n\n\n

Conclusion<\/strong> <\/p>\n\n\n\n

There are no easy solutions to any of this. I truly hope that HMV continues in some form over the coming years. It\u2019s just one of a narrow set of places that the more casual music consumer can actually buy music. I would hate to be limited to just what my local Sainsburys stocks.  <\/p>\n\n\n\n

But we should also be wary of overly didactic reporting that suggests that \u201ceveryone\u201d has moved to streaming. While the biggest music fans may well have done, the average consumer does not<\/em> stream their music. The problem is that high street stores can\u2019t rely on not getting their custom for 11 months of the year, before they pop in December to pick up an Ed Sheeran album. <\/p>\n\n\n\n

There seem to be more structural problems with the retail industry. Rents may be increasing, but many chains have over-expanded, and it would seem that even the smallest fall in sales can lead to dire consequences.  <\/p>\n\n\n\n

Being a music snob doesn\u2019t really help anybody. You may be lucky enough close enough to Rough Trade or whoever, and enjoy their brilliant curation. But most of the population doesn\u2019t. London can support such shops. Small towns all over the country can\u2019t.  <\/p>\n\n\n\n

I\u2019m not a muso <\/em>although I do buy and listen to a reasonable amount of music. I have a streaming subscription, but I also buy CDs and mp3 downloads. The first record I ever bought was in HMV. I loved going there on Saturdays examining the singles chart in great detail, and later flicking through the albums. There was an independent music shop on the opposite side of the road that I also enjoyed. But the local department store also had a record section, as did WH Smith and Woolworths. All were part of my Saturday trawl.  <\/p>\n\n\n\n

Later I would spend far too much money downstairs in HMV on Oxford Street, or upstairs in the DVD section.\u00a0\u00a0<\/p>\n\n\n\n

Just after Christmas I popped into an HMV in Norwich to pick up a Blu Ray of Leave No Trace <\/em>a film I\u2019d missed in the cinema but which has been popping up on loads of \u201cBest of the Year\u201d lists. I could have streamed it, but the quality of physical media is better, and the disc was actually cheaper than some streaming services. (It\u2019s a fantastic film by the way, and fully deserves its plaudits). <\/p>\n\n\n\n

I will miss HMV if it is to finally leave high streets for good.<\/p>\n","protected":false},"excerpt":{"rendered":"

A few thoughts on the new difficulties faced by HMV.  In part this is response to some utter nonsense I\u2019ve read online, and some of the news reports surrounding HMV heading into administration for the second time in five years.  There are undoubtedly structural problems with how music is sold in 2019, but I think there are multiple […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,12],"tags":[811,938,730,937,936,250],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/posts\/7482"}],"collection":[{"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/comments?post=7482"}],"version-history":[{"count":4,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/posts\/7482\/revisions"}],"predecessor-version":[{"id":7487,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/posts\/7482\/revisions\/7487"}],"wp:attachment":[{"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/media?parent=7482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/categories?post=7482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.adambowie.com\/blog\/wp-json\/wp\/v2\/tags?post=7482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}