His master's void: profit gaps responsible for possible closures (Image: bm.iphone)
This manages to be even less surprising than the Blockbuster bankruptcy filing in the United States: according to The Daily Brew, HMV may be looking at closing some—or even all—of its Canadian stores. As sales of CDs and DVDs stumble, HMV’s search for other options hasn’t paid off:
The closures will likely be announced before an April test of its borrowing rules, which are expected to be tight. And, while the HMV Group will apparently seek to end its leases in shopping malls across Canada, an imminent exit altogether isn’t seen as likely.
HMV introduced a “store of the future” format three years ago, which was designed to make locations more browsing-friendly with an enhanced selection of books, electronics and video games. Computer hubs were also set up in some locations to encourage social networking, online research and on-the-spot downloading.
The problem for stores like HMV—and other music retailers—is that the music industry may be even more doomed than we already thought. The good people at Business Insider look at the last 30 years of data from the recording industry, and when the data is crunched, some troubling facts (and hilarious graphs) come out.
- When adjusted for inflation, the music industry is making less money than any time since the CD was introduced.
- When adjusted for inflation and population, revenues are lower than any time since 1973.
- People are spending about one-third as much on recorded music today as they did 10 years ago.
And there’s good reason to think all of these trends are going to get worse, not better. Basically, the music industry relies (or, perhaps, relied) on full-length album sales, and while iTunes has opened up some new money, it’s largely helped revive the single. The download hub hasn’t helped (and may have harmed) album sales.
HMV won’t be the first retailer to fold (remember Sam’s? Music World? A&A?), and with numbers like that, it probably won’t be the last.
• HMV considers closing Canadian stores this spring due to shrinking sales [Daily Brew]
• The REAL Death Of The Music Industry [Business Insider]
John,
February 25, 2011 at 1:14 am | by James NoorieYou seem to delight in the struggles of this retail chain. Did you even think to ponder the impact of store closures on Canadian artists, employees and the music industry itself? Because let’s be fair – writing pithy little columns for Toronto Life magazine is not exactly the launching pad to journalistic success is it (and you wouldnt want me to take glee out of your sad situation right?). I could also point out the factual inconsistencies in your column, never mind the dubious sources you have used (the ‘Daily Brew’ isn’t exactly the G&M).
As a person who actually STILL BUYS(!) entertainment products, I can never find the particular blu ray or CD that I want at my local HMV. If I just want to buy a mainstream title, then every other store that competes with HMV will have it at about $5-$15 cheaper! Gee what a shock that HMV can’t stay in business… Normally, less competition means the other retailers can gauge the public if they want, but illegal downloading makes that kind of pointless.
February 25, 2011 at 10:51 am | by HMV SucksNot surprised – HMV was always my last choice of outlet when Sam’s, A&B, A&A, Discus, Music City were around.
Whenever I buy physical CDs (which is always more frequent than downloading) I usually end up at amazon.ca – the prices are better (about 30% less) and the selection is something I never got at HMV, even during the CD boom years.
February 25, 2011 at 6:22 pm | by flamingduckEveryone almost rejoices at another closure, which is always odd but consider the following facts.
Another business going under in Canada ups the unemployment rate.
HMV is one of THE last record stores, if not THE last one. Yeah sure, iTunes is out there but iTunes isn’t local. A lot of HMV’s cater to local needs… unlike your walmart, future shop, best buy, amazon.com and the such. HMV’s have helped local bands get recognition in markets where no one else could even order their cd. Sometimes for those artists, it’s as simple as phoning and asking.
It sucks that Sam, A&A, A&B Sound, Musicworld all went under, but it’s not HMV’s fault, everyone just blames that guy who’s left.
HMV might have higher prices but the people at HMV tend to know a bit more than the Amazon search or especially the Walmart employees.
I hate sounding like a fanboy, but seriously, the last thing we need is another business going under in Canada, and if Walmart is the only place left to buy video games… I’m going back to using my imagination.
February 26, 2011 at 12:02 am | by The IconThe last time I was helped at HMV, none of the titles I was lookig for were anywhere to be found. I was looking for some King Crimson and the latest Uriah Heap. The manager (this was in Halifax), told me they don’t stock them because people were downloading them. I suggested it were stocked, I wouldn’t have to look elsewhere such as a mail order or a download.
When I got home, I looked up the #1 download on the ‘net, Black Eyed Peas. Of course, HMV had that CD.
CD Music stores have to realize one thing: Everyone who walks into their store, wants to buy something. If they don’t have it, they’re going to look elsewhere, and after a while, downloading may be the only alternative.
I have the answer for this, however. Put computer terminals in the store hooked up to a printer and a data base of music. Let people pick and choose of the data base, or net and allow them to make a CD of their choice, right in the store. The sooner this business model is adapted, the sooner everyone can continue shopping for music of their choice.
February 27, 2011 at 11:51 am | by philPop music (the main source of revenue for most record labels and record stores) captial s sucks.
When music is of good quality, it sells. Quel’le suprise.
March 4, 2011 at 8:18 pm | by CaracticusPop music (the main source of revenue for most record labels and record stores) capital s sucks.
When music is of good quality, it sells. Quel’le suprise.
March 4, 2011 at 8:18 pm | by CaracticusWhen I usually buy any type of physical entertainment media, the first couple of stores that comes to my mind are, BestBuy/FutureShop, and Wal-Mart. In my opinion whenever I walk in HVM and browser around everything seems more expensive. A recent experience reminded me why I would never go to HVM every again to make any purchase. My girlfriend works at Fairview Mall (Toronto) and one day I brought in a BestBuy flyer to do a price match for the Inception Blu-Ray ($19.99) while they were selling it for $29.99. Before I showed the sales person the actually flyer, I ask if they do price match (he says yes), told him BB was selling it $10 less (he just laughs and thought I was nuts). However, when I showed him the flyer he refused and said it is below their cost and told me to pick it up at BB. Yes I did end up going to BB Scarborough Town Centre to pick it up and a couple more BR movie that I wasn’t thinking of getting. Now reflecting back I think HVM policies and their sales people are a joke, it could be only this specific store, but it has left a bad after taste.
March 7, 2011 at 2:46 pm | by DaveNot surprised. The bosses must still be living in the last decade as evidenced by the shitty prices on movies and games and not to mention the lack of stock of catalogue titles while overpriced new releases are over abundant. Best Buy, Future Shop, Walmart, Zellers, Amazon… they all sell for cheaper and mostly have stock.
HMV = FAIL
March 8, 2011 at 2:14 am | by lmao at hmvThe Internet has levelled the playing field for new artists, and independent labels because they can upload their music directly to iTunes and about 1000 other sites which pay them directly!
Compare this to the old model whereby an independent artist had to:
1) get noticed by a record label
2) get signed
3) record an entire “commercial” album that will appeal to the masses
4) have massive sales, because if you don’t they can’t pay all of the executives at the record company. You cannot start over again, because once you’ve done this, they won’t give you another chance.
Nowadays, THIS is how it works, and why HMV and the record companies can’t figure out how to compete:
1) scrounge together a computer, a few mics, or a friend with the equipment and knowhow to do a recording
2) record, mix, and master your song, or album
3) post it online
4) tell your friends and promote your music online
5) if you don’t have a lot of sales, go back to step 1
Good luck with trying to do that with the traditional system.
March 8, 2011 at 10:04 am | by RonI download music, but the problem is, there is no sound quality in those compressed files.
March 8, 2011 at 2:21 pm | by FrançoisI would be very sorry to see HMV disappear in Canada. They are a great store and I use them frequently for DVD purchases. Their selection and pricing is very good and I like the store layout too.
It would be a significant loss if they disappear, I for one think they do a great job and wish them the best of luck during difficult times for the industry.
March 12, 2011 at 11:41 am | by Nigel WinterbottomI do not rejoice in any business closing up but on the brighter side maby the mom and pop music stores which are still around can compete now. HMV has had a major monopoly on the scene for years. I called it they were in trouble a while back when I saw how much ”other” products they starting getting in that weren’t CDs etc.
March 27, 2011 at 1:46 pm | by LawrenceI’m not surprised HMV is closing in Canada. Even 10 years ago their prices were higher than Sam’s, Music World etc. I knew they were “toast” when they started to sell t-shirts, books and video games a couple of years ago. Bye, bye HMV you’re done!
Their video games are at least $10 more than everywhere else. In fact, Shoppers Drug Mart sells Nintendo games cheaper than HMV (and that’s saying something about how out of touch HMV are with consumers)They held on to the outdated business model of raking the consumer for as much money as possible without realizing the power of downloading. They also jumped aboard the DVD bandwagon in the late 90′s and put all their eggs in that one basket and then DVD gave way to Blu Ray, Netfix, downloading etc. Greed is what killed them.
March 31, 2011 at 4:00 pm | by joeboActually, since Sam’s went under, HMV has improved much of its pricing policies, with many CDs selling at 2 for $20. The staff is quite nice, too. But if you want to talk about gouging, Sunrise is the place to go to. The Yonde / Dundas store was selling the Beatles mono set for $500 which was illegal, as it was being sold above list price. And many of its store sales, promos etc. have been misleading and often their prices for Cds are more than at HMV. At the end of the day, Soundscapes is the best new store for buying CDs but HMV is overall not too bad, either. It would be s shame if it were to go under especially if Sunrise records were still left standing. And as someone who buys physical Cds and doesn’t download music, any retailer going under is bad news.
April 3, 2011 at 1:59 pm | by Shlomo