HMV’s insolvency – bad company strategy or inevitable victim of digitalisation?

In these days, the news are filled with articles about the insolvency of HMV (e.g. here), which is facing British music culture. HMV was the record shop in the high streets. But with the digitalisation of music and new big players such as iTunes or Amazon, the high streets lost their significance for being the place to buy new records. Music fans listen to new music online and can buy music online, saving the effort to go to the city.

However, those who grew up in the 1990s and before might be unhappy about this development. Sure, it is easy to research and buy music on the internet. But the experience in the record shops is a different one. Unfortunately, HMV and other large record shops didn’t work on their strategy how to offer services and building values and emotions, which download shops and online traders cannot provide. Shops like HMV started to offer diverse products like phones, clothes, etc, which are not particularly connected to its core competence: music. I don’t blame offering DVDs or games, because this is entertainment, too. Anyway, these traders should have focused on personal emotional  connections to their customers, collective experiences, media experiences (which are not available in downloadshops). Maybe this can be compared with music events. Purchasing music at high street record shops should have been music events! In the past years, the live music experience on concerts, festivals and in clubs has become a growing instance in the music industries. These events cannot be copied and not consumed via Internet (of course, you can watch event videos, but certainly this is not comparable to being at the event).

Returning back to the news around HMV, fortunately, this doesn’t need to be the end of this legendary music shop. Deloitte is searching for new investors for the HMV. Maybe this insolvency is a wake-up call for high street record shops to improve their strategy, how to address potential customers better than online shops can do.

However, it is questionable if record shops can survive in the long run, when physical records sales are decreasing. I can imagine that physical records still keep some relevance as fan and collector’s item, because music still provides some identity building and representing to music consumers and digital music collections or the access to streaming services may not represent fandom as much as physical records can do.

Nevertheless, the insolvency of HMV is definitely bad news for all British music fans, who love to browse through physical records and buy them in record shops.

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