Historic UK music retailer HMV collapses due to digital surge

December 28, 2018 by Dario Thuburn
HMV can no longer compete against a streaming onslaught in music and film

British music retailer HMV, which was launched by English composer Edward Elgar in 1921 and helped propel the Beatles to fame, collapsed into administration on Friday as consumers switch to digital streaming in droves.

His Master's Voice (HMV), which is known worldwide for its iconic logo showing a dog listening to a record player, is the last major music retailer in Britain and has been suffering for years from the decline in physical sales of CDs and DVDs.

Hilco Capital, a restructuring company which rescued HMV when it previously entered administration in 2013, said that the board of HMV had decided to appoint administrators but its 125 stores in Britain would continue trading for the moment as negotiations continue with suppliers.

The company employs around 2,200 people.

"It is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital service," said Paul McGowan, executive chairman of HMV and Hilco.

"During the key Christmas trading period the market for DVD fell by over 30 percent compared to the ," he said, adding that this decline was "unsustainable".

Signed The Beatles

Digital downloads overtook physical music sales in Britain for the first time in 2012 and since then platforms for music and film such as Spotify, iTunes, Netflix and Amazon Prime have grown further, undermining retailers.

His master's voice fading
"The switch to digital has accelerated dramatically this year, creating a void that we are no longer able to bridge," McGowan said, adding that the physical music market in Britain is forecast to fall by around 17 percent next year.

"As a result, the directors have concluded that it will not be possible to continue to trade the business," he added.

HMV opened its first store on Oxford Street in 1921 selling gramophones, radios and popular recordings.

It made history in 1962 when record label EMI, which belonged to HMV until 1996, signed The Beatles.

Since its last collapse, HMV had hosted a series of live events in store with musicians like pop star Kylie Minogue and grime artist Stormzy in a bid to increase footfall.

But McGowan also noted there had been a "tsunami of challenges facing UK retailers", including a raise in business rates—a tax on non-residential properties.

Hello Goodbye
'First victim' of Christmas slump

Brexit uncertainty and the growth of online shopping have hit British retailers particularly hard this year.

Consumer confidence in Britain fell to its lowest level in five years in December, according to the GfK institute.

"Poor Christmas trading has claimed its first victim," Richard Lim, chief executive of Retail Economics, told the BBC.

The electronics retailer Maplin, the British branch of Toys'R'Us and the discount chain Poundworld all collapsed in 2018.

The department store House of Fraser was also forced into administration while Marks & Spencer and Debenhams had to close stores.

Some 150,000 jobs have been lost in Britain's retail sector this year, according to an estimate by Britain's Press Association news agency.

Explore further: Adele, and her foe streaming, lift 2015 music sales

Related Stories

Digital music sales 'to nearly equal CDs next year'

August 18, 2009

Compact discs accounted for 65 percent of US music sales in the first half of 2009 but digital downloads are expected to nearly equal CD sales by the end of next year, market research firm NPD Group said Tuesday.

Beatles songs being made available for streaming

December 23, 2015

The Beatles are set to release their back catalogue on streaming sites including Spotify, Apple Music and Tidal for the first time from Christmas Eve, the band's website said Wednesday.

Recommended for you

In colliding galaxies, a pipsqueak shines bright

February 20, 2019

In the nearby Whirlpool galaxy and its companion galaxy, M51b, two supermassive black holes heat up and devour surrounding material. These two monsters should be the most luminous X-ray sources in sight, but a new study using ...

When does one of the central ideas in economics work?

February 20, 2019

The concept of equilibrium is one of the most central ideas in economics. It is one of the core assumptions in the vast majority of economic models, including models used by policymakers on issues ranging from monetary policy ...

Research reveals why the zebra got its stripes

February 20, 2019

Why do zebras have stripes? A study published in PLOS ONE today takes us another step closer to answering this puzzling question and to understanding how stripes actually work.

Correlated nucleons may solve 35-year-old mystery

February 20, 2019

A careful re-analysis of data taken at the Department of Energy's Thomas Jefferson National Accelerator Facility has revealed a possible link between correlated protons and neutrons in the nucleus and a 35-year-old mystery. ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.