HMV's Closure End of An Era
TORONTO - April 30 may be remembered as the day the music died — physically speaking.
HMV is bankrupt. When the retailer closes its doors in three months, it marks not only the end of a once-mighty chain, but another loss in the bigger food chain known as the music industry.
As fewer people invest in CDs and DVDs, able to stream or download the music and movies they want, retail outlets such as HMV will continue to move toward extinction.
On Jan. 27, an Ontario Superior Court of Justice approved an application to place HMV Canada into receivership. The application was filed by HUK 10 Ltd., which is a subsidiary of the U.K. restructuring company Hilco UK, which bought HMV in 2011. The Canadian HMV has been a separate business entity since that date.
Despite making money through 2013, HMV stores in Canada saw falling sales thereafter. The heavily indebted retailer owes $39 million to the restructuring firm and has made no payments on debt in more than two years.
According to CP, court filings make it clear that to continue in business, the stores would need $2 million now and another $5 million every year in financial support, a situation described as unsustainable. Losses at the stores are estimated to be $100,000 a day.
An agent has been appointed to sell HMV’s remaining merchandise.
To a particular generation, the closing of HMV stores represents the end of an era.
It only took about 50 years for the public to move from the 12” vinyl LP — through 8-Track, cassette, CD and online purchase — to streaming via giants such as Tidal or Apple Music.
And the endless supply of ‘free’ music to consumers has obviously played a role in the end of retail sales.
What happens next is always interesting. Just as streaming sounded an eventual death knell for paid downloads, technological advances continue to put the music industry in a situation of market cannibalization. Each new thing grabs a portion of the old audience, leaving musicians and record label executives in the background scrambling to figure out how to value artists’ work and make a living.
Ironically, vinyl albums are one entity in the world of recorded music showing an uptick in sales in recent years.
Maybe it’s nostalgia.
Maybe it’s the need to own one’s own library versus the potential impermanence built into streaming services.
Even Apple founder Steve Jobs himself didn’t like streaming, and once said that people want to own their music, not ‘rent’ it.
Those still interested in that ownership will find HMV clearing their remaining stock through April 30, the date when 102 Canadian stores will close for good.Read More..