January 5, 2011 6 Comments
HMV are, according to the BBC, going to close 60 stores nationwide, after Christmas sales are down and shares have plummeted. Interesting that the BBC notes HMV Group are having “trouble meeting the terms of a bank loan“.
Those of us who haven’t the slightest inclination towards business, but who are on the pulse and understand that the world has changed, could have told them this years ago. It doesn’t take a business person to realise that with the invention of the internet, approach to physical goods that can easily be made digital, had to change. Not so HMV. I used to go there every week when I was younger and I remember buying 12-track CDs for about £18. “We’re doing well now, so we’re fine” is the kind of attitude they took. “People are stupid so we can continue charging excessive amounts of money for things they can get free or cheaper elsewhere.” I stopped buying in HMV a long, long time ago and I get almost all of my music online, digitally.
It sounds ruthless and unfair of me to be so blasé and matter-of-fact about it – but business is ruthless and unfair. If you stand still and expect that customers will still be flocking to you when there are people selling music in more convenient and cheaper ways, then frankly, you deserve to fail for being so utterly short-sighted and ignorant of developing customer needs. My only surprise is that they have carried on for so long, blindly and arrogantly believing that once you get to the top you don’t need to fight to keep your place.
The bottom line is, and has been for a while: why pay for music when you can get it for free very easily, or at least pay just 60-90p per track?
Perhaps it is not HMV’s fault. Perhaps it is more the fault of the music business in general – and again I say, why did they not realise what I could have told them nearly a decade ago? Did they think that digital downloads and the internet would simply go away and stop being such an inconvenience? Did they think that people wouldn’t be creative and capitalise on the opportunities the internet presented?
Also, the bank loan. Why, why oh why are companies still taking out loans when they are as big as HMV – and I would imagine that is as big as you can get. This is exactly the kind of greedy attitude that got us into a huge mess in the first place. I watched a small part of This Morning, where a finance advisor was answering viewers’ questions. The top one was “How do I pay off my Christmas debt?” – I am astounded that people are still taking out loans. Have they been living under a rock for the last two years?
With regard to business, I’m all for making hay while the sun shines but have a back-up plan, and don’t expect that things will stay the same year after year. The world has changed, and continues changing – to run successful businesses you need to get creative, adapt and use technological advances to your advantage, instead of simply ignoring them.