Editor: This week, HMV announced a controversial new plan to expand its store estate, opening 10 new stores including a search for a new London flagship site, following the closure of HMV’s Oxford Street store back in 2018 when the company fell into administration (‘HMV seeks 10 new store locations’).
Whether the organisation goes back into administration depends entirely on how willing it is to diversify and adapt. The reality is that any business – of any size and in any sector – needs to be agile and respond to changing market conditions. Rather than becoming complacent, businesses need to listen to their customers and look at the state of the current market if they are to understand how to keep pace with changing demands.
Frustratingly, HMV seems to have learned very little from its previous dabbles with administration. In 2013 and 2018, it was like watching a sequel of the video rental chain Blockbuster failing to identify Netflix as a threat and diversify.
HMV had the potential to utilise its heritage and leverage its brand recognition to create an online platform that competed with Apple Music and Spotify. Instead, it has chosen to romanticise the past by backing a 100-year high street status quo, which was clearly on the decline even before the pandemic.
CD and DVD sales have no future, shown by supermarket giants such as Sainsbury’s deciding to stop selling them amid competition from streaming platforms. Streaming is the way forward; Spotify is one of the most successful music services out there and has claimed 36% of the global streaming market. This comes down to the fact that consumers want quick, easy and accessible content.
One thing the online revolution has made clear is that customers want to feel a close connection with the brands they are aligned with. While vinyl has experienced a surge in popularity among younger and older generations, this popularity is not mainstream, but rather driven by a niche group of music fans who see it as part of a collector’s experience.
HMV’s decision to risk it all by backing the high street and vinyl sales shows a reluctance to learn from past mistakes and get with the times. Moreover, the fact HMV is not looking to sign any long-term deals suggests it is itself not 100% certain about the future of the high street, so the move seems like utter madness to me.
Neil Debenham, entrepreneur, investor and business troubleshooter
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