By Caleb Fox, Heather Gunn, and Michelle Guthrie
Photos: Heather Gunn
Media giant HMV Canada was recently placed into receivership, with all stores to close by April 30th, 2017. The chain, which sells music, movies and pop culture merchandise has seen a heavy decline in sales over the past few years.
HMV is a household name for most Canadians, so the announcement of the closures came as a shock to many. Streaming platforms like Netflix and Spotify are mainly to blame; more and more people are opting for online media as opposed to buying physical CD’s and DVD’s, mainly out of convenience and affordability. Technology is a huge factor, with a majority of people owning tablets, smartphones, and laptops that allow easy access to services that provide movies, TV Shows, and video game content. These services often give unlimited access to huge digital libraries for a low monthly fee. Leaving retail giants such as HMV with what some consumers see as an unsustainable business model.
Employees were also surprised about the news; most found out along with the general public, leaving many worried about what their futures may hold. Megan Clark, a sales associate who’s worked at the West Edmonton Mall HMV for nearly four years, said “We didn’t see it coming. But we weren’t getting some of the new artists, and then we were having problems getting stuff from Disney suppliers, I thought that was weird.”
Loyal customers and collectors are having a hard time accepting the announcement. “I notice it’s the older population who’s going to have a harder time with it because they don’t do a lot of online stuff. And everyone wanting to collect their movies and everything are having a hard time dealing with this,” said Clark.
Along with closing the stores, the company abruptly shut down its “HMV Pure” points program, which allowed customers to accumulate points on every purchase and redeem those points for free rewards merchandise. Rewards members were blindsided to learn that they are no longer allowed to use their points, as the company has deleted all points from member accounts. “To be completely blunt about it, they handled it really poorly. If they gave actual notice or something like that, I’d be more inclined to give them a pass, but I ended up finding out about it through someone on Facebook who just happened to learn about it.” said Chris Ranta, a long time HMV customer.
With the chain due to close within a few months, storewide sales have already begun. Most merchandise is between 10 and 30 percent off, upsetting customers who are looking for bigger discounts. “Initially, everything was on sale, including the
two for whatever stuff. On Saturday [Feb. 11], I stopped in and all of their two for whatever stuff went back up to that regular price,” said Ranta.
Running a sustainable business as a media retailer in this day and age is a difficult task. Movies, TV series and albums can all be bought online through sites like Amazon, driving customers away from physicals stores. Getting rid of video games, which is still a big retail market, was a mistake for HMV, according to Clark. “Bring back video games. People would come for video games. They couldn’t really increase prices because that wouldn’t of made people happy,” she said.
Consumers still buy music, but they’d rather opt for streaming subscriptions (Apple Music, Spotify), or buy with one click on iTunes. When asked about if anything could have been done to save the stores, Ranta said “With the way the market is working right now, I doubt it. I’m sure if they wanted to, they could start up a streaming service, but with Netflix and iTunes, what’s the point?” Furthermore, digital media allows users to amass a large collection without leaving any environmental footprint: no packaging in the garbage, no old discs tossed away, rendered inoperable due to scratches, and no clunky wooden media cabinet full of dusty blu-ray cases.
The closing of the chain is a marker of a huge shift in the increasingly digitized media market. Vinyl has enjoyed a resurgence in popularity in recent years, however that market has been mostly dominated by small, independently owned record shops such as Blackbyrd on Whyte. Chains such as HMV have struggled to find ways to remain relevant in the current marketplace.
A few years ago, the company seemed to have found a solution to the problem. It was announced that the flagship HMV store in Toronto would open a live music venue in its basement, something that Ranta thinks could have been a big boost for the chain had it been down nationwide.
Reimagining part of the store space as a place to showcase live music would have allowed opportunities for local artists to perform, and given the store a way to make extra money, as well as getting people in the doors, said Ranta. He adds that it would have also given the company a way to remain unique, offering something an online retailer couldn’t; instead it’s just a missed opportunity.
Whatever the key to running an economically sustainable entertainment media business is, HMV certainly didn’t have it. Time will tell if other retailers find a solution and take its place, or if we have truly moved into the digital age for good