The Sad News about HMV was Inevitable because of the General Decline in CD/DVD Sales
People just aren’t buying CD and DVD’s in the volume they used to and the trend towards online downloads apace. Currently over 73% of all music is purchased online and HMV, despite its heritage, either didn’t see it coming or were unable to move quickly enough to reshape their business to take advantage of their customers changing behaviour.
With administrators now appointed it looks likely that HMV will quickly go the same way as Comet, Zavvi, Tower Records and Woolworths. HMV continues to trade but to all intents and purposes it really is a “dead man walking”. The 4,000+ staff who are currently employed by HMV must be expecting the worst. A sad day for yet another of the UK’s once famous brands!
Interestingly similar pressures and challenges have been bubbling around the promotional CD and DVD space for the last couple of years with a large number of CD and DVD duplication companies being forced to make fundamental changes to their business model or close. Many have closed voluntarily but just as many have been forced out of business.
The reasons for the demise of CD and DVD duplication companies in the promotional space is not so much because of the move to on-line (not yet anyway) but because the market has shifted to promotional USB memory sticks.
Until a few years ago if a company wanted to hand out an electronic version of their brochure, price list or wanted to provide prospective customers with media files (video clips, music files etc.) their only option was to make this available on a CD or DVD that was printed up with their company details/logo on.
In the last few years the rise in popularity of the USB memory stick coupled with falling prices, greater memory capacities and faster read/write speeds has seen the USB stick all but wipe out the demand for CD’s and DVD’s.
Although CD’s and DVD’s remain a cheaper option (albeit not by much) they don’t have the same impact when handed out, they’re considered a “bit old hat” and they don’t offer the recipient the same personal re-use capability that a USB stick does. Companies that hand out a 4GB USB stick for example can be reasonably confident that the stick will be used, any data on it will be viewed and ultimately the USB stick will be re-used to carry the recipient’s personal data. As such any brand printed or engraved on the USB stick will benefit from on-going exposure.
So, whilst todays news is sad for the staff of HMV the underlying move away from CD’s and DVD’s has had an equally devastating impact of significantly more businesses (and staff) that have built business on the supply of CD’s and DVD’s over the past 10 – 15 years.