The demise of HMV
The UK’s one remaining high-street music chain faces administration – how did it all go wrong and what can be done to save it?
Philip Clark 12:26pm GMT 16th January 2013
HMV's website has been replaced with an administration notice as online trading has been suspended
HMV's classical music department as it once was - as advertised in Gramophone's pages in September 1987
I know as much about good business practice as I do about salmon fishing in the Yemen. Terms like ‘private equity’, ‘administration’ and ‘liquidity’ make my eyes glaze over. ‘Fiscal easing’ sounds like an acute medical throb that must be treated without delay, ‘asset stripping’ like a lowdown joint in Soho. And yet as HMV, the UK’s only remaining high-street music chain store, stares into a peculiarly grim abyss that is the lingo through which this sorry, fin de siècle tale will be expressed.
But let’s reclaim this story on behalf of the music lover – what does the possible demise of HMV mean for us? Of course our innocent pursuit of squirreling away as many CDs of Mahler’s Second as we can find has only become tarnished by business speak because of a devastating failure of the suits upstairs to engage with music consumers, to listen to what those of us who can still be bothered to schlep into town to buy a physical CD actually want.
Remember when you’d think nothing of paying £16 for a brand new release? That’s why in 2005 HMV was worth over a billion pounds and – oh happy days – was hauled over the coals in parliament because of its alleged anti-competitive business practices. Today the company is worth a mere five million quid, which, once wages and the rent has been paid on its Oxford Street premises, presumably barely leaves enough to cover the phone bill. HMV’s collapse has been brutal and humiliating, and yet to anyone who did something as old fashioned as go there to buy music the company’s predicament comes as no surprise.
Yesterday (Tuesday) I went into HMV’s Oxford Street branch for the first time in months to gauge the mood music. Rewind that sentence. For the first time in months? There was a time when I was hardly out of HMV, when I’d actually arrange to meet friends there (‘see you at 2.30 by the Ornette Coleman section’), when my Switch card (that dates it) was all too intimate with the HMV card reader. The last time I went into HMV, to buy an extra issue of one of the magazines I write for, probably at some point during 2012, I was told that they could no longer stock specialist magazines ‘because the stockists think we can’t pay for them’. (Gramophone ‘specialist’ in a classical music store?) That ought to have warned me, and yet yesterday I was seriously depressed by the shop floor carnage. The classical section piled high with TV drama DVDs; the muddle of seriously pricey box-sets rubbing spines against knock-off discounted stock; the same prison cell-gray decor I remember from 20 years ago.
But there was worse to come. Taking the escalator to the first floor, I found myself surrounded by Cheryl Cole calendars and related tatty reality TV junk; turning to my right, I found myself traversing a vast acreage of floor space given over to Beatles T-shirts. Are Beatles T-shirts really more profitable than Beatles CDs/vinyl?
The conclusions are obvious. At same point during the last decade the interests of HMV parted company with those of us who love music. There was a systemic failure to grab the initiative from Amazon, the new agenda setters. The company’s online presence was – and remains – pitiful, with anecdotal evidence aplenty of the wrong order delivered far too late. HMV came up with a new plan – they would sell iPods and headphones to make a quick buck. But did no one twig that every iPod sold was essentially a physical product customer lost? A parallel argument in bookselling – the wisdom, or not, of Waterstones involving themselves with the Kindle – continues to rage.
As trailed at the head of this eulogy, I’m no businessman. But that an organisation which for 90 years existed to sell music lost the faith, then diversified into desperate barrow boy tactics, selling products of only tangential interest to their core customer base tells its own story.
And not being business minded, I can’t know what watching their accounts fall through the floor was like. Desperate measures in desperate times. But instead of ripping the musical hearts out of their stores – pulverising classical and jazz sections; the history of Western music effectively reduced to a few Russell Watson and Jamie Cullum CDs – HMV could have, should have, made their stores more attractive for music nuts. As Amazon were offering customers a wider selection of music than ever before, HMV’s decision to offer less was a calamity waiting to happen. An upmarket, boutique-like HMV could have emerged, physical products tied into an exhaustive online presence. That was the time to call in favours from record labels, not a couple of years ago when the chips were really down.
Give me a record store and I become an old Romantic. When I came to London nearly 20 years ago, I considered Tower Records, HMV, Virgin – and independent shops like Mole Jazz, Ray’s Jazz and Cheapo Records – to be a step away from heaven, to be palaces of learning. Since then the way customers consume music, and indeed what our godforsaken culture considers to be music, has changed utterly. There’s no going back. But perhaps it isn’t quite game over for HMV. Reports suggest that record labels are as keen as mustard to salvage something from the wreckage; that people recognise HMV as a brand name still of some value and are waving cheque books in its direction.
Perhaps expensive high streets are no longer the place for HMV? Perhaps the company needs to jump into bed with concert halls, to re-engage with the wider musical community. When Elgar opened the first HMV in 1921 on Oxford Street he praised the shop’s ‘palatial new premises’ and hoped that ‘the dissemination of good music by the gramophone will give us a new public which, while knowing nothing about the technical side of music, will know how to listen to music with true appreciation’. If a new HMV does emerge, it needs to return to those founding principles: to music.
And a postscript. Just as I’m about to file this blog, a tweet arrives from Rough Trade, the highly profitable East London record store clearly run by people obsessed with music. ‘A BIG THANK YOU to everyone who has tweeted/spoken/written kind words about us in the last day or so. It’s time to open more UK stores...’
Comments
My own experience of HMV online has been pretty positive. Mainly DVDs of films, etc, but often cheaper than Amazon or anywhere else – but also so much cheaper than the physical product in HMV stores themselves that their own website was a principal factor in my ceasing actually to buy DVDs in the shop! In the old days (going back, let's say, 10 to 15 years), I was never out of the flagship Oxford Street store and did my best to bankrupt myself with their offers on wonderful CDs. The magnificent classical room there also had one (in particular) of the most knowledgeable experts of classical music on CD that I've ever come across.
Well, the 'music lovers' were not spending. Simple as that. Perhaps it only seemed very different to you because it was so long since you last went there? Actually I think HMV did well on classical given the limited turnover. My local HMV always has a selection of new releases from major labels and from others - Hyperion, Chandos, Ondine, Brilliant - but I also notice that even such Gramophone-touted titles sold only slowly. They also had a fair selection of Naxos recent titles in a separate section. I think 'music lovers' (i.e. the small number of people who buy *many* more records than they can listen to) have long-migrated to mail order and then internet. So I think you are being a bit nostalgic and I don't really see what HMV could have done, although the real story is not what it was 20 years ago but the fact that two years ago it posted a good profit - so I'd quite like to know what changed in those two years. The fact you don't like a lot of the music they sell is not relevant - if they had Josef Suk instead of Cheryl Cole or Boulez' Ring instead of Lord of the Rings, I'm not sure the money would come flooding back in. Of course if you believe that you will set up your own store! ;-)
I visited the new SATURN in Köln when it opened a number of years ago and the place was hopping. I found every classical CD that I could think of; Lili Kraus on Music and Arts, The LaSalle Quartet on d'Orfeo, etc... Classical music nearly encompassed an entire floor and CD's were categorically organized under instrumental, vocal, piano solo, chamber music, orchestral, etc.. Then I visited the same store a year and a half later to find that the stock and inventory had diminished to almost nothing by comparison. However, I knew that I could shop for just about anything on ArkivMusic.com once I returned to the states.
It seems as if the same downturn is happening to book stores that sell strictly at retail prices. Coliseum Books at Columbus Circle in NYC was an institution before it eventually closed for good. As far as I can tell, the book stores and record stores that manage to stay profitable are those that buy and sell both used and new merchandise. The only exception that comes to mind is the boutique Harmonia Mundi at 15 Avenue de l'Opéra75001 Paris of which I feel obligated to mention has the best costumer service that I've ever encountered.
Spot-on, Philip, I think. Yes indeed, it must be hard to run a big franchise like HMV, especially when I've never once been part of the population (or wittingly known, though I've a good few music-loving friends) which apparently accounts for the 75-odd% of new music sales via download.
I suppose the big question is whether music shops could/can survive with 25% of the market, and whether that percentage might be higher if places like HMV hadn't wrongfooted themselves by abandoning those who do like to browse and buy CDs from the shelf.
To my mind there's little doubt that HMV went down this route. I was last there about a year ago, on a Saturday in search of a particular CD which was scheduled to be issued on the Monday. I'd paid a pretty hefty train fare and was prepared to pay more than what the disc would have cost by mail order. So imagine my pleasure that there the disc was - in fact a gleaming pile of them, all barcoded and ready to go out. Imagine my irritation, too, when the cashier told me, even as I waved the money under his nose, that he couldn't sell me one until Monday.
Perhaps smaller, independent shops can work round this kind of cumbersome protocol, and perhaps that's the way that things now need to go.
I feel sorry for the staff of many HMV stores, especially that of Oxford Circus, which although site of my anecdote (an unusual experience), often had great expertise and enthusiasm. Many a time I overheard staff there talking passionately about music (recorded and live), and advising customers quite dispassionately about the best recordings to acquire of this or that. Whether it's management or the economic circumstances to blame, many of them have certainly always done a good job of selling music.
I used to regularly enjoying browsing in HMV & Virgin shops in my closest towns (several hundred miles from London) and would regularly order there as well and generally got good service. Last summer I visited an HMV shop with a dismal display of classical recordings, asked to order a boxed set from Universal and was told they wouldn't take the order.
Needless to say I haven't been back, bought the recordings as a lossless download from Universal's site and burnt my own CDs.
Sadly, HMV didn't learn an obvious lesson of marketing - if you can't compete on price, compete on service. The booksellers, wine stores and DVD/CD sellers who are prospering do so because they have knowledgeable sales staff who know their products. I for one am willing to pay a little extra for good advice...
dco - tell us where you go. I have never been to a bookstore where the seller knew more about literature than me (hint: literature, not books) or to a CD store where the seller knew more about music (about music not about 'CDs'). Not by a long shot. And wine stores run by experts collapse - they trade poorly - I have seen several disappear round where I am very recently. I think all this discussion is nostalgic.
My local hmv was once zavvi, and before that Virgin. It's been a sad decline. Sir Richard certainly knew when to sell! Even in those earlier days of wide choice, it was easy to see why RB was so wealthy.
It is sad that a town like Peterborough which has a cathedral choir, several youth choirs and adult choirs as well as a symphony orchestra cannot support a record shop. The only source of CM is vinyl in oxfam (no cds there!)
Times have moved on, music is free on youtube, itunes or Amazon is where my teenage daughter and her friends get their music.
'Second as we can find has only become tarnished by business speak because of a devastating failure of the suits upstairs to engage with music consumers, to listen to what those of us who can still be bothered to schlep into town to buy a physical CD actually want.'
I couldn't agree more with this statement. I am a keen supporter of SACDs and if the suits had engaged more and thought about releasing the right titles and promoting SACD better we have enjoyed more amazing multichannel high quality listening experiences over the last decade than we have. I was always a regular in HMV Oxford Street, I loved exploring, but the titles and format I wanted just wasn't there anymore. Their other high street stores seemed to sell mainly the cheaper classical titles and music I mainly had, or the cheesy pseudo classics as advertised on TV which the suits thought we wanted, errr sorry no thank you. So the record labels might not want HMV to vanish, but they have done little I feel in terms of product to get me to go to the stores and explore. That said, I will not be moving to online downloads out of choice I do and always will prefer the physical format it offers something tangible that I own and flexibility of use. I also want quality of sound. So I hope HMV does not go under, but the suits of the record labels need to think how they can help them with good products, not just cash and dmore downloads!
well we know they got something wrong, but what would work to give them a surviveable strategy? Is it just the emergence of downloads? Exceptional classical stock, knowledgable people and well designed stores is what we say we want, yeah?...but actually I think people here generally agree that's what they used to have but (as Dmitri hints) progressively clearly it didn't work. This is what's happening on the High Street more generally and increasingly retailers won't compete with on-line where rock bottom price is accompanied by rapid delivery and a no quibble service guarantee.
Ironically, one of the things HMV got badly wrong was their website - ugly site, difficult to fathom, high prices and generally uncompetitive when compared with Amazon and even the major labels. Here at least they could have invested in great quality and competitive prices, but give me Amazon every time.
I appreciate the sentiments of many of the commentors who regretted what happened to HMV. It is conceivable that a more imaginative management could have allowed HMV to have a better outcome. But basically, I see HMV's fate as something more or less inevitable and out of its control. It's fate was sealed by the universal revolution in the arts early in the 20th Century.
For 500 years the purpose of music had been to serve patrons, audiences and worship. Acceptance of this role was eloquently articulated by Haydn, Beethoven, Tchaikovsky, and Grieg. Chided by a German musicologist for not composing weightier works like symphonies, Grieg responded (approximately) "I leave it to Beethoven and Brahms to build the great temples of music. I am content to create more humble abodes in which my countrymen will feel comfortable".
Everything changed as Schoenberg, Bartok (in his fierce modernist phase), post-Petruchka Stravinsky, Varese, pre 1930 Aaron Copland, and other avante-garde composers tore down the tonal, harmonic and other principles upon which music's powerful role in human life was built. By the end of World War II the avante-gardists completed takeover of the music establishment.
Contemporary composers could choose almost any style or form of music and gain respect and recognition - serial atonal music, "dissonant counterpoint", where dissonance and consonant combinations changed places, sounds created by unorthodox use of musical instruments (e.g. hammering on piano cases with mallets), microtonal music with effects like the scratching of fingernails on a blackboard, music based on mathematics or electronic modelling, aleatoric (random) sound production, etc.
The only kind of music that was unacceptable was that which appealed to general audiences.
Although more "in-your-face" confrontational styles declined with time, and "neoclassical" or "neoromantic" styles became acceptable, I've discerned that one thing is still not allowed to credentialed composers: composing music designed to communicate with audiences. That's considered "derivative", or "poular", the kiss of death when applied to a composer's work.
Some composers use tonal styles no more radical than styles found in Liszt and Mahler. But as I follow the structure of these works, I find that they typically set up musical expectations but inevitably veer off in new directions instead of consummating the buildup with satisfying or memorable resolutions. There are never, never musical themes that people remember.
As pointed out by Nicolas Harnoncourt, audiences before the 20th Century always demanded new music that spoke to their times. Now, as we all know, the repertory of "classical" music performance groups dependent on on the public is inevitably dominated by older works. Contemporary compositions are barely tolerated except for a small circle of aficionados.
In the U.S. the kind of knowledgeable nonprofessional music lover that formerly abounded has largely died out. Audiences are cowed. They have been told so often that obscurity in music signifies profundity, that they are reluctant to express too much enthusiasm for new music that may have interesting turns, lest they display their low level of musical sophistication.
If the above has any echo in your own experience, isn't it obvious why classical music's role in society - cut off from new works that are meaningful to nonprofessional audiences - has dwindled to cultural-historical concert or recorded experiences?
What can we do about this? Well, that's a fascinating topic for another time.
i have never been to a concert of the Rite that was not sold out. When I went to Ades Tempest it was sold out. At your end of things, Katherine Jenkins and Alfie Bo sell out stadiums. Two years ago HMV showed a profit even though it was selling Bartok. The Proms are 97% full over the whole season. And people are curious about what is new and interesting. I think the problem would come if the people who 'like a good tune' started to get their way and Bowen and Bax replaced Boulez and Birtwistle (who both sell out, in my experience).
Not sure that its true that the internet killed classical retailing: there was always a healthy competition between the many mail order firms (some of whom were also shops and larger retailers). I recall in Dublin in the late 80s and when I was at university in the early 90s, no less than 3 very respectable classical depts - as somebody rightly describes - the quiet, store-within-a-store oasis. What made them different was knowledgeable staff and attention to customers. HMV in particular had a staff member who'd just graduated from a music dept of nearby university a couple of years previously, and knew exactly the kind of customer who was buying - not just the music lovers with (as I remember watching enviously from my frugle student budget) big piles of CDs, but institutional buyers. Niamh won many of these over by customising the way they did business to these buyers. She was rewarded quickly and last I heard - only after maybe 5 or 6 years was sent to South Africa as a senior regional manager, having utterly transformed her stores business here.
I might stress the point that she was a music graduate, by the way, not a business graduate. As somebody who transitioned careers and has skills (and qualifications) in both fields, I can't help notice how, like so many of the household retailers who have (and continue to) go down the cistern in recent years, the commodification of their businesses have chased the presumed mass user at the expense of the niche or intelligent consumer. This isn't just the case in music, but in literature, cinema, furniture, wallpaper, magazines, newspaper, cameras, TV of course - where its assumed that targeting the middle of the crowd will somehow hit a larger average than looking for what customers really want.
They do maybe temporarily - but the rewards are pretty much wiped out when they are replaced by a younger, prettier model who can dance even more wildly and shock even more. And the cost of their marketing and background shows are so gigantic and enormous that they don't really pay their way or the companies way and so suck up enormous resources for little gain. The industry has changed and the consumer has left the record company behind. And Kathrin Jenkins doesn't sell out stadia - its Wales rugby who sell the stadia and give her a nice little platform to perform on. Her little PR stunt over her fairly minor history of recreational drug use before Christmas shows how deep her career has stooped, and how desperate her PR now must be to keep her platform propped up. You don't see the world class talents around her having to do that to get their next gig.
The problem with HMV was twofold: firstly they bas****ized their material to denude as much non-mainstream stock as possible, making it less useful to a specialist buyer, then they replaced knowledgeable staff with 16 year olds who could be paid less than the minimum wage. And let them run the stores. All of these collapsed retailers suffered badly from the latter - at one point my then 19-year old sister was more or less managing a bookstore! Not only did this mean that the places were mostly very badly run, they also were symptomatic of a business model that refused to reward staff and relied entirely on short term cheap labour from the bottom of the market, thus ensuring a constantly low level of service quality (my local cinema does it too - they "forget" to turn on the lights when a film is finished, leaving patrons to stumble out in the dark) but a failure to really capture the customer - and failure to develop any kind of real internal talent.
Amazon, in any case, was never better for a lot of classical - the specialists still rule supreme for those, even on price.
And I might add, try looking up 5 of the top say, British mezzos or basses, and count their actual CD output - the record companies don't really help by under-recording some of the very best talent to such an extent that the only way to hear them is either youtube, or to travel to hear them live. One American mezzo who emerged in the late 80s has over 70 cd recordings under her belt - the British mezzos I regard as the finest, who arrived in the following decade - one has 24 CDs in the current catalogue, the 2nd, the better of the two, has her name on just 12 (and in some cases just a few tracks). If the best artists and music is/are not being recorded, well its not surprising that the retailers cannot sell it.
There has been a noticeable difference in the HMV classical sections in the larger city stores than in the provincial ones. Manchester HMV classical section, still pretty good (was there only two weeks ago). I'd say benchmark standard for what you'd expect, not massive on choice but wide enough. The Oxford Street one was the best physical product choice I've seen but Tower when it had the classical vinyl upstairs was very impressive in the mid-late 80's. Some rare stuff there - picked up the Cornelius Cardew memorial concert on double album.
Meanwhile your provincial stores have the usual - a few budget priced ranges and a few of whichever soloists are condsidered safe bets ie. 'crossover'. There's been a blatant policy as well of get a few in of something that's 'happening' - 6 of Bruckner 9 or whatever, but fast sell and don't replace, move onto the next one.
I wouldn't say the experience of shopping in an HMV was particularly enjoyable mind. I agree with the store within the store oasis in the larger ones, but overall the stores have had that 'modern', neutral, functional black decor, which together with the rows of budget product, speaks of commodity. Shift it rather than let people sift it. Overall, not quite there on customer cenredness.
To be fair though, I have picked up other music there of interest and not just CM, for example Nitin Sawnhey.
Times change as technology drives markets. Online shopping - what could be more comfortable - and i-tunes etc...have overtaken the large specialist store. What is worrying mind is that both the small independents and the larger specialist stores are going the way of all flesh so to speak...
Philip - you might not remember Dobells on Charing Cross Road. Early eighties. Jazz specialist shop (and folk). Wow! First month at Uni and came out of there with Coltrane's Giant Steps on vinyl...
Since you mention Manchester HMV please allow me to comment favourably about Michael (I don't know his surname), the very knowledgeable, good humoured and chatty Manager of the Classical Music & Jazz section. An avid concertgoer and opera attendee, Michael is a unique and invaluable asset to the store. It would be a crying shame to lose him if HMV were to close.
I couldn't help noticing, however, on my last visit how uncompetitive and highly priced many recordings were.