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HMV woes, Internet shopping and the future of retail


pap
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Seems HMV is in some major bother.

 

In one sense, it is a surprise. They have very little competition on the High Street.

 

In another, it's no surprise at all. They're still charging 14quid for CDs that you can buy for 7UKP online. Also, they have too many stores. They've got two shops in Liverpool which are about 400 metres away from each other.

 

In a broader sense, it'll be interesting to see the impact of online shopping on our High Streets. With very few exceptions, notably apparel and food, what can you actually get in a shop that you can't get online?

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Have any of these shops thought about doing something along the lines of a 'download station.' Either a plug in and go, or WiFi link where they can pay for songs/albums on site?

 

Obviously iTunes can be used on iPhones/Pods when in a WiFi area (and if the 3G signal is strong enough) but for more 'limited' MP3 players surely it could be a good revenue source?

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Short trading has been the major driver behind the slump in the share price. They have more shares out on loan than anyone else. I took a bit of a hit, but then recouped some that by buying back in at 27 and selling at 32, but won't be gambling again with it. They will be releasing their financial statement on 15/1 and it'll show they are in profit, but declining profit. Todays IMS was intended to soften the blow. They have diversified into clubs and they own Waterstones which they have turned around, but there doesn't seem much potential for growth.

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I'd be gutted to see HMV go - far more than Woolies.

 

They won't go. They are a profitbale business despite the impression people are getting.

 

Profit Forecasts (in Millions)

 

Year Ending

 

30-Apr-11 40.41

30-Apr-12 39.81

30-Apr-13 38.30

 

As pap points out they have too many stores with many within yards of each other - madness.

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HMV can only blame themselves for their downfall. They have failed to recognise the direction of the market, which started changing 10 years ago as Amazon and other online companies like CD Wow grew in prominence. As soon as these companies started taking their market share they should have joined the online market - properly. Their own online version is pants, and isn't advertised nearly enough.

 

Factor in as mentioned above, the price of CD's - which are a joke, unless it's the most recent X-Factor album. They also should have thought about the digital market a lot more, and have been overtaken by Apple in this respect.

 

I would really hate HMV to go, as like many others, it's a symbol of my youth, growing up and my adult life. It would feel like a little erosion of your life, more than Woolies but less than Fosters :-) (which funnily enough was where HMV is now!).

 

BUT, it really is their own fault. Woeful attention shown to how the market was moving, and now it's probably too late.

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HMV can only blame themselves for their downfall. They have failed to recognise the direction of the market, which started changing 10 years ago as Amazon and other online companies like CD Wow grew in prominence. As soon as these companies started taking their market share they should have joined the online market - properly. Their own online version is pants, and isn't advertised nearly enough.

 

Factor in as mentioned above, the price of CD's - which are a joke, unless it's the most recent X-Factor album. They also should have thought about the digital market a lot more, and have been overtaken by Apple in this respect.

 

I would really hate HMV to go, as like many others, it's a symbol of my youth, growing up and my adult life. It would feel like a little erosion of your life, more than Woolies but less than Fosters :-) (which funnily enough was where HMV is now!).

 

BUT, it really is their own fault. Woeful attention shown to how the market was moving, and now it's probably too late.

 

To be fair to them, the likes of Amazon and CD-WOW must have seemed like a gamble when they launched. Amazon didn't turn a profit for years. The Internet used to be the province of bearded geeks and Star Trek fans. Noiw everyone is on it, and it has matured enough so that people are confident about shopping online.

 

HMV probably perceived the internet retailers as upstarts, maybe still does. A lot of companies continue to do things because "that's the way we've done them in the past", and making changes in a big retail firm would have been difficult on both a political and financial level. Ultimately though, you're right. They missed the boat, they're treading water and unless someone has an extremely cunning plan, they're going to drown.

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Hmv get hammered on two fronts. Firstly as mentioned above, online and secondly the supermarkets who sell "top 40" albums at very discounted rates. The supermarkets have also hit the book sellers in the same way. They only offer the most popular books / cds without having to stock all the back catalougue or the more eclectic stuff. The high street record shop is doomed in the medium term.

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The Internet used to be the province of bearded geeks and Star Trek fans.

 

ha ha, you're spot on with that observation. When I was at school I had no interest at all in computors and used to bunk off computor classes. These were the domain of the same people who spent their lunch break in the chess club and their free time playing wizard games.

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These shops - HMV, WH Smiths etc all rely entirely on convenience. HMV always seems to be packed when I go in there. There is no one else who does what they do now Zavvi/Virgin Megastores has gone. I've always had a pretty good shopping experience in there and thought their staff are although studenty, tend to be very helpful and keen. Not sure what they can do to keep going really! I certainly wouldn't want to be one of their directors.

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These shops - HMV, WH Smiths etc all rely entirely on convenience. HMV always seems to be packed when I go in there. There is no one else who does what they do now Zavvi/Virgin Megastores has gone. I've always had a pretty good shopping experience in there and thought their staff are although studenty, tend to be very helpful and keen. Not sure what they can do to keep going really! I certainly wouldn't want to be one of their directors.

 

There is no hope for HMV. Their profit forecasts for the next few years are a desperate attempt to protect the share price, just as their 'diversification' into stunts like in-store live entertainment was a desperate attempt to keep footfall levels high. Tower Records did what they do far better than them - as did Virgin. And they went ages ago. Zavvi was always a hopelessly lost cause.

 

HMV are in for a perfect storm. The megastore model for selling DVDs and CDs is an iTunes-inspired bust. And their Waterstones outlets will go the same way - again courtesy of iTunes, with a lot of help from Amazon.

 

The good news is we may see the return of smaller specialist shops - both for books and music. (This is already starting to happen around where I live.) Frankly, I won't be unhappy to see HMV and Waterstones go the way of the dinosaurs.

 

And dune, PLEASE put whatever you have left over from Desire into HMV. For me.

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And dune, PLEASE put whatever you have left over from Desire into HMV. For me.

 

Never have been in Desire. Took a bit of hit with HMV but am very happy with VOD, MKS, ITV and CNE and happy taking a gamble with NYO and CRND. Did very well with AGQ so that combined with buying back in HMV and jumping again more than recouped the HMV hit.

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Surely the massive elephant in the room here is that pretty much everything HMV tries to sell (at their inflated prices) can be torrented and shared online - it's the thin edge of the wedge for the entertainment industry generally.

 

I have no idea how they're still going other than peoples' grans buying Christmas presents in there because they don't know any better.

 

My sister-in-law had £50 HMV vouchers for Christmas 2009 and only got around to "wasting" them in November. Amusingly she has now been given £60 more.

 

I don't think I've bought anything in there that wasn't a £3 book for about 6 years.

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Surely the massive elephant in the room here is that pretty much everything HMV tries to sell (at their inflated prices) can be torrented and shared online - it's the thin edge of the wedge for the entertainment industry generally.

 

The industry still hasn't grasped the nettle on this one, funnily enough, much like HMV when the internet start-ups were emerging.

 

BitTorrent might be a bit of a challenge to monetise, but the Internet offers up limitless opportunities for funding entertainment. Instead, you have the likes of the RIAA and MPAA threatening to burn your dogs for downloading their media - as they assume (incorrectly) that we peons are thieving scumbags who'd pocket a turd if no-one was looking. It's an extremely simplistic viewpoint which demonises their own customers. Just because you can torrent, doesn't mean you will. I could have easily torrented the Expendables the other night, but rented it on Virgin Media instead.

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Verbal (the resident geek) won't be happy.

 

Games Workshop Group - Down 6.3%

 

Games Workshop lets ferocious armies clash without the drawback of actual bloodshed. Founded in 1975, the company designs and manufactures model soldiers, game systems, and accessories for tabletop wargaming. Popular game lines include Warhammer, Warhammer 40,000, and The Lord of the Rings. The company sells its products through about 320 of its Games Workshop Hobby Centres, its catalogues and Web sites, as well as over 4,000 toy and hobby shops globally. Games Workshop also publishes a monthly hobby magazine called White Dwarf available in five languages, and operates Sabertooth Games collectible card games and BL Publishing which produces novels, graphic novels and art books set in the worlds of Warhammer and Warhammer 40,000

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Verbal (the resident geek) won't be happy.

 

Games Workshop Group - Down 6.3%

 

Games Workshop lets ferocious armies clash without the drawback of actual bloodshed. Founded in 1975, the company designs and manufactures model soldiers, game systems, and accessories for tabletop wargaming. Popular game lines include Warhammer, Warhammer 40,000, and The Lord of the Rings. The company sells its products through about 320 of its Games Workshop Hobby Centres, its catalogues and Web sites, as well as over 4,000 toy and hobby shops globally. Games Workshop also publishes a monthly hobby magazine called White Dwarf available in five languages, and operates Sabertooth Games collectible card games and BL Publishing which produces novels, graphic novels and art books set in the worlds of Warhammer and Warhammer 40,000

 

What on earth have you been smoking?

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Verbal (the resident geek) won't be happy.

 

Games Workshop Group - Down 6.3%

 

Games Workshop lets ferocious armies clash without the drawback of actual bloodshed. Founded in 1975, the company designs and manufactures model soldiers, game systems, and accessories for tabletop wargaming. Popular game lines include Warhammer, Warhammer 40,000, and The Lord of the Rings. The company sells its products through about 320 of its Games Workshop Hobby Centres, its catalogues and Web sites, as well as over 4,000 toy and hobby shops globally. Games Workshop also publishes a monthly hobby magazine called White Dwarf available in five languages, and operates Sabertooth Games collectible card games and BL Publishing which produces novels, graphic novels and art books set in the worlds of Warhammer and Warhammer 40,000

 

If Verbal doesn't want the job as resident geek, I'll take it.

 

GW is crap anyway. After the success of Dungeons and Dragons, which required pens, paper, a couple of books and your imagination - the GW guys thought that a much better business model would be to do away with the imagination bit and sell figurines instead. To be fair, it was a very good business idea - but their shops all smell of armpit.

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I bought my iphone FM transmitter in there for £49.99 when I could have got it for £20 online. That probably has kept them going another month. Yay me.

 

That was what I was looking for the last time I was in there, last January. I had one bought for me, but they did get a couple of £3 books out of me.

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The industry still hasn't grasped the nettle on this one, funnily enough, much like HMV when the internet start-ups were emerging.

 

BitTorrent might be a bit of a challenge to monetise, but the Internet offers up limitless opportunities for funding entertainment. Instead, you have the likes of the RIAA and MPAA threatening to burn your dogs for downloading their media - as they assume (incorrectly) that we peons are thieving scumbags who'd pocket a turd if no-one was looking. It's an extremely simplistic viewpoint which demonises their own customers. Just because you can torrent, doesn't mean you will. I could have easily torrented the Expendables the other night, but rented it on Virgin Media instead.

 

Which leads nicely into the fact there's a recession on and a LOT more people will be taking the cheap option.

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Which leads nicely into the fact there's a recession on and a LOT more people will be taking the cheap option.

 

Agreed, but if they didn't have the money to buy it anyway, does that really count as lost sales?

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Agreed, but if they didn't have the money to buy it anyway, does that really count as lost sales?

 

I think it's more a matter of "if they didn't have a free alternative would they choose to spend their money on CDs/DVDs instead" ?

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I think it's more a matter of "if they didn't have a free alternative would they choose to spend their money on CDs/DVDs instead" ?

 

Enticed as I am with the prospect of travelling into this alternate universe you've created, where freely downloadable media is merely the feverish dream of madmen, I'm going to remain staunchly "this-universe" - there is a free alternative.

 

So, if someone can't afford to buy DVD xyz, and they rip it off instead, it can't really be considered as a lost sale.

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Buying CD's and DVD's will just go the same way as vinyl, and HMV will disappear with them.

 

Downloading is cheaper and easier, I expect eventually books will go the same way.

 

Definitely. When I started building my DVD library, I thought "this is it - I can replace all those chunky VHS tapes". I'm not replacing my DVDs with Blurays. I'm past the point where I'm confident of digital downloads - I actually hate physical media. I'm getting rid of the lot of it.

 

Hopefully, the next batch of games consoles will be network only too.

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Definitely. When I started building my DVD library, I thought "this is it - I can replace all those chunky VHS tapes". I'm not replacing my DVDs with Blurays. I'm past the point where I'm confident of digital downloads - I actually hate physical media. I'm getting rid of the lot of it.

 

Hopefully, the next batch of games consoles will be network only too.

 

We may even reach a point where it will no longer be necessary, if we so choose, to touch our possessions.

 

 

 

 

Deep.

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