Musicmetric: HMV Failed to Adapt to Online Sales

HMV Signage

Global music sales analyst says retailer's limp internet efforts brought catastrophe.

Beleaguered retailer HMV has its limp response to online sales to blame for falling into administration, according to music sales analyst Musicmetric.

Following today's earlier announcement by the nationwide retailer that the company was preparing to call in administrators, putting its 235 stores and 4,350 jobs at risk, Musicmetric CEO Gregory Mead placed the blame squarely at HMV's slow response to the digital marketplace.

"It's a sad but inevitable fate for a much-loved stalwart of the music industry," Mr Mead commented.

Comparing the media retailer's response to the internet to that of department store John Lewis', the executive stressed that the latter company adapted to the online marketplace with its Click and Collect service.

He continued: "HMV simply failed to adapt to the changing tastes of music fans and the seismic shift we've seen as everything has gone digital."

Following today's earlier announcement, HMV issued a statement to Eurogamer pledging that this move to administration would not be the company's “final chapter”.

"The plan is to carry on trading with a view to finding a buyer or to at least develop some options that will allow us to take the business forward," spokesperson Gennaro Castaldo explained.

These moves follow on from the company's latest financial results for the 26 weeks ended October 27th 2012, with a decline in total sales by 13.5 per cent and an after tax loss of £36.1 million.

According to HMV, games make up 17 per cent of its sales mix, with the Entertainment Retailers Association reporting that 7 per cent of the entire video games market moved to digital distribution from 2011 to 2012 alone.

Their figures show that gaming is the largest represented media group in digital sales, generating £552.2 million in 2012 - larger than music and video combined.

Sources: InvesegateEurogamerHMV GroupHMV GroupERA

image: © yoppy

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