HMV To Go Dodo

When I was in London a few weeks ago, I visited a few marketing agencies and the big buzz was that there was a huge pitch for advertising and online work for music retailer, HMV. Business is bad for HMV, but my reaction was, “Why the hell are they talking to ad agencies? Will s an ad campaign or a cool site that will save them?”

The concept of the mega-music store in its current form comes from a pre-digital era: pile it high, twist the arms of record companies to pay for placement, limit stock. The digital music revolution came and went and HMVs and Virgin Megastores remained largely unchanged.

It looks like HMV is splashing about in their final death-throws. The Independent reports:

Alan Giles, HMV’s outgoing chief executive, said the retailer thought the internet would be “relatively modest” at less than 10 per cent of the market when it entrusted Amazon with selling its books online.

“We are now concluding that it will be bigger and sufficiently important to feel we want to bring that relationship with customers back in-house,” Mr Giles said… In the past 16 weeks, its music chain saw an 11.4 per cent drop in underlying sales.

What’s shocking is that HMV is going to go it alone to save their online sales. HMV is dropping Amazon to sell music direct. Their new system will only be a Microsoft based PC only one I was told when I was in London. Maybe they think they know a lot more about selling music online than Amazon ever did.

Another driving factor, surely, behind HMVs demise is the fact that record companies have been freed by the slavery of retailers and allowed to explore new routes - online and offline, conventional and unconventional. A CD in a coffee shop might sell far better that and a CD in a music shop these days.

The light to follow would be to go back to their roots and ‘curate’ music. Two of the most innovative music retailers in the US specialize in helping the customer find the music they want. The first isAmoeba Music - a pulsating warehouse of tunes armed with hardcore music fans ready to help you. The other retailer doesn’t come from music - it comes from coffee. Yes, while limited in their selection, Starbucks HearMusic stores make grand attempts at curation. The develop ‘Artist Choice’ products, Boards hover with suggestions about music, staff are on hand to help you (not despise you), you’re free to make your own music CDs and they plan to embrace digital music further by allowing direct sales to the iPod.

HMV’s plans? The Independent reports that they’re testing demand for cheaper CDs and DVDs in six of its stores, and have said the early results of the trial were “encouraging”.

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Site Visit: Hear Music