HMV Says If You Can't Beat 'em, Join 'em!

I reported yesterday on our news Website, that "music" retailer HMV has decided to carry iPods and related accessories in many of its stores across Canada. I say (or rather, type) "music" in quotations because, although historically known as a store that sells CDs, DVDs, and the odd audio accessory, like CD cases and cheap-y headphones, the company has managed to evolve alongside the changing face of the music industry. And this is a good thing.

Rather than cry the blues that digital is taking over, or sit tight hoping that this digital music craze will eventually blow over, HMV has simply adjusted its business plan to fit in line with new consumer wants. CD sales are down? HMV added other entertainment products to offset the loss in sales, including video game consoles and game titles. And now, rather than admitting defeat in the music category compliments of the mighty iPod and its partner-in-crime iTunes, the retailer has jumped on board. They're sending out a loud and powerful message: if you can't beat 'em, join 'em. Good on HMV.

Advancements in technology do not have to translate to a battle between the old and new. People will record music onto the hard drives of their portable devices...just like many of us used to record radio or TV onto blank cassette and VHS tapes (come on, admit it. You know you did!) People will download music from the 'net instead of purchasing a physical CD. Instead of trying to tell customers what they want, why not listen to what they're telling you they want? This seems to be a large part of HMV's focus, and I've gained a new-found respect for the retailer because of it. It explains why HMV has survived in a game where many have fallen flat.

As for the adjusted strategy, it's also possible that, as each HMV customer pops in to buy the new iPod touch, he might just be enticed to pick up a few impulse CD buys...hey, you never know.

Music World to Succumb to Digital Downloading

Sadly, Music World is the latest music retailer to succumb to the growing popularity in digital music downloading. According to a report from the Globe & Mail, the company has filed for bankruptcy. Earlier this year, Sam The Record Man closed the doors to its iconic downtown Toronto Yonge St. location, leaving many a nostalgic baby boomer teary-eyed.

Although it's sad to see the effects that digital downloading is having on traditional music retailers, there's also a positive side to this story. Remember, it isn't that consumers are no longer purchasing music; it's that they're purchasing it in a whole new way. Through digital download Websites like iTunes and Puretracks. Through mobile carrier services that let you download a song straight to your mobile phone. Through custom-made CDs that are played back on a home theatre system and streamed throughout the home. Through satellite radio. Through streaming Internet radio. Through portable devices like the Sonos music system. The list goes on and on, and the opportunities at both retail and the manufacturing level are endless. We're not losing interest in music: it's just the platform for which we access and purchase it that's changing.

It is unfortunate that retailers like Music World and Sam The Record Man are feeling the brunt of this change. But there are others who manage to persevere through the storm, mainly by not focusing solely on music. Like HMV, which has managed to remain strong by expanding its offerings to include things like video games and consoles, and a massive selection of movies at varying (and often attractive) price packages. In August of this year, the retailer dropped the price of some CDs by as much as 33%!

Others have made bold moves to keep music sales up: Wal-Mart, for example, offers CDs like the new number-one Eagles album Long Road Out of Eden, at price parity with the U.S. Even non-traditional music outlets, like Starbucks, are managing to remain in the music game. Coffee house Starbucks has built digital music download stations in some U.S. stores where customers can listen to tracks, and create and purchase a custom CD while they're sipping a latte.

There is a way to stay alive in traditional music retailing: it just takes some really creative thinking outside of the box, and an entirely new business plan.

Music World stores are said to close by early next year. As of today, the company's Website simply brings up a Music World logo, but no content. It's a shame, because I did find the store a great destination for tough-to-find DVDs.

In the words of popular rock band Queen, another one bites the dust...