HMV must adapt or die


HMVWhat was the most dangerous evil to come out of Pandora’s box? Classical texts point to greed, envy, and the relentless pursuit of power. Modern tabloids would suggest lust. I am convinced that of all the evils, Nostalgia exerts the most corrosive influence on human happiness. Nostalgia, or the false romanticization of the past, breeds an aversion to change. Of course, change may not always be good, but an unwillingness to at least be open to change is always bad.

Consider HMV. The high-street retailer, which offers CDs, DVDs and other entertainment products, has faced steeply declining profits as a result of competition from internet shopping and supermarkets. A couple of days ago, HMV secured a £220 million loan from lenders that included state-backed institutions such as RBS and Lloyds banking group. The loan in itself is not bad; the company can use this opportunity to dramatically reconfigure its business model and emerge in a more competitive form. If HMV once again becomes profitable, the shareholders, the lenders, and everyone else involved in the deal benefits. The dialogue surrounding the circumstances of the loan issuance, however, was worrying.

Romaticization began with puff pieces like one in the Guardian entitled ‘Would you miss HMV?’ which included maudlin reminisces such as ‘there is nothing like owning a record’ and ‘its been really sad seeing stores close down one by one—I don’t want HMV to be next'. There are some things worth preserving, but the sort of sentimentality that portrays HMV as a British national treasure is silly at best and destructive at worst.

Consumers clearly do not value HMV that highly. HMV is not going out of business because of a sinister-investment banker-driven-plot-to-destroy-all-that-is-good-and-wholesome-in-the-world. HMV is going out of business because the majority of consumers prefer to purchase their CDs/DVDs online at lower prices (or illegally download them) rather than travel to a store and pay more. Some people might prefer the latter experience, but not enough to support the current massively expensive operating model. Either HMV will have to downsize, streamline, and reinvent in order to serve this niche consumer base, or it must exit the market entirely.

The demise of HMV as we know it does not mean the end of entertainment, but rather a transition towards new forms of entertainment distribution and consumption, as demanded by the consumers. For the true CD lover out there, you will still be able to buy CDs, just as you can still buy a gramophone. Given the limited demand for gramophones, you have to shop online or in a specialty shop rather than in a massive gramophone complex on Oxford Street, but the option is still there. So it is with CDs. If consumers demand a good or service, the market will provide it – even if it’s obscure. But if they don’t, no one should be forced to subsidize its provision for the sake of nostalgia.