Majors Labels To Rescue HMV?

The big three major labels are desperate to save the UK music retailer HMV and will offer discounted CDs to help the company revive itself. But is it already the beginning of the end for CDs?

Ultimate Guitar

Struggling music retail chain HMV could be saved by the major labels to stop it going bust.

The UK chain of HMV stores announced last week that it was going out of business, because of difficulty competing with online stores like Amazon and iTunes.

Now the big three major labels - Universal, Warner Music and Sony - want to offer discounted CDs and DVDs to HMV so it can revive itself.

The majors worry that the loss of HMV would leave supermarkets as the only mainstream music retailers, selling music at "cut-throat prices" according to NME. This means reduced revenue for the music industry, which is why they're keen to keep HMV on the high street.

"Most towns - small, medium-sized towns - aren't going to have any kind of record shop anymore," Everything Everything bassist Jeremy Pritchard told NME. "You can go to Tesco and buy the Top 10, but that is it. So there's not really a physical presence for the physical format on the high street."

If the major's rescue package fails, parts of HMV may be sold to other businesses who have expressed an interest. Otherwise, over 4,000 jobs are at risk. Some staff staged a sit-in protest last week when they discovered they might not be paid.

Another industry concern is that indie record stores will have to shut down, because major and indie labels have less need to print physical products now that HMV, the UK high street's only national music retailer, could shut down. In turn, struggling indie stores will have less access to new products which puts their businesses at further risk.

This may prove that many in the music business want physical products to survive, but they're clearly at risk. What do you think the future of physical music products hold? Is it just a matter of time before digital takes over? Let us know what you think in the comments.

55 comments sorted by best / new / date

    HMV kills independent music stores, Internet kills HMV, what will kill the internet?...
    I really hope that digital music doesn't take over! I buy CD's because I enjoy owning the physical product of an artist I love. I don't see the point in purchasing a wavelength. It's a shame that physical revenue has been lost so much, it's sad that people don't put into the industry they long to be apart of.
    I guess you could always buy the physical CD from Amazon instead of just the download. Does suck that that is becoming our only option tho ...
    If hmv gets revived and offers cheap CDs that could rival amazon prices I would literally buy something new every week.
    Sorry for posting up here, but I buy loads of CDs a month, so far this month I have bought 15, and most of my purchasing comes through amazon, new but mostly preowned (Zoverstocks on Amazon UK is awesome, most albums for 1p then pay 1.26 postage.) Originally I built my collection from HMV but it's become ridiculously expensive to purchase a CD. 15 for American Idiot, 15 for the Arctic's first album etc. When those albums albeit very popular have been around a few years now and should be cheaper to pick up not more expensive than they originally were. However, it's because HMV has no competitors that they can drive prices up. I don't class a lot of independents as competitors as their prices are as expensive and they are few and far between these days, the one in my town is pretty expensive and I try to buy as much as I can from them but it's just too much for so little e.g.25 for a vinyl picturedisk in a plastic sleeve. However a 40 minute drive from me is another independent store which gets a lot of business on CD and vinyl just down to the fact that it has vinyl dirt cheap (new and old releases) and does several good offers (Albums for 3.99/$6, 3 new albums for 20/$30) which is a real competitor to HMV. Independents can be great but it's few and far between and people are willing to go and buy CDs over download. HMV just has been out of touch with it's customers for ages and would rather sell few albums at a high price than a lot at a lower price.
    If they get bailed out, they'll need to adopt a better business plan to compete with the internet, unlike a while back when they were given a couple million to brave the economic storm and wasted it by sticking to their old policies. They should also reduce their prices to more reasonable standards, not 15 for a single cd that barely anyone in their right mind would purchase
    I totally agree with this. CDs are just too much in HMV. Here's my process when I go into HMV: 1. Look at CDs 2. Pick up about 5 that I want to buy 3. See price tag. 4. Check Amazon, see that it's half the price 5. Don't want to wait for delivery 6. Download instead So instead of buying 5 CDs (which I totally would every time I went into HMV if they were actually a decent price) I buy none.
    in Austin, there is still a successful record store that has been around for years. they compete so well because the CDs are so cheap, and they have an enormous collection of used CDs that can be bought for half amazon or iTunes prices. for example I bought soundgardens five disc box set for 15$, used but in perfect condition
    Used CD's don't benefit the industry though, only that individual store. The artist won't make any money from their CD being sold used.
    I find that in Canada many bands I want to listen to don't have CDs in HMV so I have bought A LOT of stuff on iTunes. Mainly bands that haven't made it big yet, or have since made it big.
    I wish there was a HMV store near me or some other kind of big CD store. The only one I know of where I live is bloody Tesco, and I think we all know what kind of crap 'music' they sell there.
    I'd be curious to see how vinyl sales are comparing now to CD sales. For the collectors who want a physical copy in their hands, vinyls offer a lot more to those people.
    but hardly anyone these days owns a record player
    More people own them than you think, especially amongst collectors and audiophiles. And with CD's, other than people who are still using them in their car stereos, they've been rendered obsolete by both vinyls and MP3/streaming (just like what happened to cassettes a decade earlier).
    Vinyl is usually considered as "merchandise" rather than album sales. Downloads, CD's and T-shirts still sell better and are more profitable per sale than vinyl is. Lots of people do talk about vinyl and it's "trendy" but it's nowhere near as popular as people seem to think. Also, vinyl requires making a separate master due to its technical limitations, and good quality vinyl is more rare and expensive today than before, which ultimately makes it more of a hassle than it's worth for most bands.
    Why exactly would they revive HMV? Nostalgia? Because the reasoning that there's very few music stores out there is stupid. Also, if I've been reading UK UG'ers right, they failed more due to the fact that their prices are too high than due to competition with rivals.
    Danjo's Guitar
    Prices are a competition thing though. I mean HMV might be stupid, but they might also feel that they can't offer stuff any cheaper, so if labels give them cheaper stuff, they could lower their prices to be more competitive. Or they could be dumb and just keep the same prices and die.
    I'd save HMV for the DVD's... There's no way HMV can compete with a 4.99 album on iTunes. Sometimes HMV have 2 CD's for 10.. but even at that I could buy two albums for cheaper on iTunes.
    link no1
    Remember, it costs a bit more to release a physical album than a digital one. If they where selling CD's at a more reasonable price then I would buy them every week. The extra cost is trivial when I take into account that for a little more I have an actual copy (which I can also make digital) They don't need to compete with the prices of iTunes. If they sold albums for (alot) less than their usual 15 I am pretty sure a noticeable amount of people would buy the hard copy.
    I'd like to see a digital/physical hybrid. I like physical copies as I like owning the CD, the artwork etc, but digital is just much more convenient. I know that it's easy enough to rip the CD to your computer but I think it would be pretty cool if each CD had a unique code inside that you could scan with your smartphone and it would add that album to your Google Music or something..
    Quite a few records actually come with download codes so you can have a digital version as well as the vinyl.
    "This will lead to less money for the music industry." Good. Maybe then it will pull its finger out and actually work to make quality rather than quantity.
    I have a decent sized DVD collection (700 films and tv series) and nearly 100 Xbox 360 games aswell as older classic games, and have nearly 200 cds (not enough, but I've only really just started buying them properly instead of downloading) and it makes me gutted that these probably sooner than lately are going to be pointless. I think collections look great and there's nothing better than opening a new DVD and especially CDs and ganmes when you could read inserts. I honestly think games are going to last longer as physical copies because of collectors editions and stuff. Hmv need to stop overpricing stuff then they will succeed. It's not necessary for a DVD like walking dead seaso2 to be 30 quid or albums to be 15 quid
    "This will lead to less money for the music industry." 'Good. Maybe then it will pull its finger out and actually work to make quality rather than quantity. ' No, it doesn't work that way. If they have less money, majors will invest in artists who will bring them money and cut the 'smaller' bands. Record companies make their money with album sells, so they won't take the chance with smaller bands. If they don't have a lot, they will put all their money in what's selling the most.
    I personally don't want HMV or other music shops to close. I own CD's. I like CD's and the artwork, the liner notes etc that you get with a physical product. I also have an iPod for being on the move, gymn etc - but its more of an extra than an alternative. An iPod is great in having an entire library at the touch of your fingertips...but it just isn't the same! ...To me anyway. Also, without a physical presence on the high streets, people are less likely to learn of a new album being released, hence people won't buy music, music industry dies a slow painful death. And to think a certain Mr.Ulrich was given some much shit for predicting this a decade ago, who was right!? If HMV get their prices right, get into the digital market and just sort themselves out they could easily survive...hopefully...
    Ummmm, do you realize your saying this using the most useful information distribution and promotion tool yet devised by man?
    The death of HMV is not the death of the physical product; it's the death of the high street. Physical sales on online stores are still going strong. And let's face it, when was the last time you went into HMV and they actually had what you were looking for?
    I don't see this happening. For them to go from bankruptcy to being bailed out in so little time doesn't leave them an opportunity to revamp their market strategy. Honestly, unless they get into digital music they look pretty much screwed. I think our high hopes of HMV making a turn around and selling vinyl to all the hipsters is a far fetched notion at best.
    The problem with HMV is that so little of the store is now dedicated to selling physical CDs. It's mostly about DVDs and video games, so saving HMV seems a little futile for these major labels especially as the number of CDs on the shelves was dwindling. I love going into HMV and browsing through the 2 for 10 deals that they always have going on but sadly only applicable to limited stock. For me, seeing a 15 price tag on a CD is inexcusable and sometimes feels like a slap in the face, especially as you can pick it up for at least half the price on Amazon. I think if they sold CDs in store for 6-10 it would be more reasonable. Also, Amazon charges an arm and a leg for downloads - 89p per song - that feels like another slap in the face. I bet a load more people would legitimately download a lot more stuff if tracks were in the 50p range and perhaps HMV could profit from undercutting their big rival? Not sure how viable that is though. I guess it comes down to the cut that the majors are taking... Its a sad day indeed, I still want to purchase physical CDs but the choices are fading by the day.
    It would be nice if HMV were rescued, but as most people have said they would need to change their price plan. Also, in the last couple of years the metal and world music sections got very small in my nearest shop. Surely, having all genres covered would increase sales. Am I making it too simple?
    link no1
    The HMV's I've been in are around the same regarding metal sections. My 'local' HMV has around a 7x7 album length shelf with about 2 CD's per row. Most of the CD's are just Black Sabbath, nothing wrong with Sabbath but would love some more variation rather than 1/3 of the section being the same band. It's also rather strange that they have such little choice considering there is a pretty large amount of metal fans around where I live. I would say the best HMV I have been in for metal was in Manchester. Not a massive section but they had quite alot of less popular bands, not just Sabbath and Metallica...infact, I don't think it had any Sabbath or Metallica o.O
    How is this going to revive HMV? They couldnt keep afloat selling at regular price so the solution is to lower that price? Get real. 1 out of 10 cds i buy is available in stores around me. Be a gent and go to the label's website or the band's website and buy it directly from them, even if it does cost another couple bucks. Goddam kids these days...
    I really don't think like "I have to get that exact album" I just happen to go in to the store with some money, then I see something good and buy it. I couldn't do that if I had to buy everything from the bands own website.
    link no1
    How will it revive them? *sigh* Example: There are 10 people and 2 albums. Both albums are exactly the same other than the price and seller. Album 1 is 15 from HMV whilst album 2 is 5 from GTFOmusic. 1 person buys 'album 1' from HMV, the others refuse to pay that price. HMV have just made 15. 6 people buy 'album 2' from GTFOmusic, 3 people didn't want the album and the other guy is pretty pissed that he paid 10 more for the same thing. GTFOmusic has made 30. If this doesn't make it clear to how lowering prices would help revive the shop then you're just stupid.
    Apparently they're allowing you to use HMV vouchers again on Tuesday
    I might not know much about music industry, but how does that sound? Record labels sell CDs cheaper > Record stores sell CDs cheaper > People buy more CDs
    Rule Britannia
    The Economist says that $3.4bn will be spent more on physical copies of music than digital copies of music this year. Maybe there's some thought going into this from Universal, WB and Sony afterall. Though I don't think these predictions are correct, the only thing going for physical copies is it's kinda cool to have a vinyl copy of something...don't know what kind of neanderthal uses CDs anymore
    That's... An interesting idea from the labels, and kind of cool at the same time. Of course, they'll probably refuse to supply anything that's not from one of their stables, but what the hell, I'd rather that than 4K+ jobs lost in all honesty.
    I get the feeling HMV will only sell shit cds from here on (maybe they already do?). Lowering the price is fine and dandy if you like the artists on these labels but I have to wonder if this is another way to screw the artist out of their money by the labels.
    link no1
    From what I understand (possibly wrong) if more people are buying CD's the record companys will be getting more money back to cover the cost of recording the band and make profit. Bands will still make money through touring + merch and won't have to pay back so much to the label for recording. But as I said, I'm possibly wrong on how that works.
    I was in the UK recently. I must say that the selection of interesting and obscure music in the HMV stores I visited was pretty pathetic. Of course this is down to death by Amazon and iTunes, but it was all the top 10, DVD's and a few select genres in the CD section. HMV cannot compete any more, simple as that. A crappy business model is just that. Unfortunately the times, they are a changing and a lot of businesses just wont be able to roll with it.
    Seriously, I'm old enough to remember the magic of waiting for a new album to be released and rush to the store in the morning to get it and listen all day... But: major labels just seem to not understand how things have changed. They'll need to figure out a new solution, and they'll need to do it pretty soon. This is the age of downloading, and everyone who really wants an LP or CD can always get it from amazon or elsewhere. Saving HMV won't save the industry.