With the recently announced sale of HMV Canada to a British restructuring firm for slightly more than $3 million, experts are predicting the worst. Speculation on the future of the retailer’s 121 stores began earlier in the year amidst slumping sales and a poor holiday season. Hilco UK is expected to pour $25-million into HMV Canada to help it transition into digital content. But is it too late for the retailer to change its tune?
As Holly Shaw wrote in the Financial Post, “Industry experts say … that digital media has won the format war, and the era of buying and renting CDs and DVDs at retail megastores is over.” She speaks to Rick Broadhead, a technology analyst, who questions how HMV can compete with the download-at-home model established by digital titans such as iTunes. Joseph D’Cruz from the University of Toronto’s Rotman School of Management said that the sale may as well be the retailer’s obituary. “The stores will be eventually be picked up by other retailers.”
In the Telegraph, analyst Sanjay Vidyathi shares skepticism about HMV’s plans to revive sales by going digital. “They say it seems customers are willing to pay more in store. But is that consistent with a reality where digital is a much bigger issue? They’ve been most hit in music. The next wave is going to be DVDs — people are using Netflix and Skype.”
Music expert Alan Cross called the sale good news, expressing some optimism about HMV Canada’s survival. On exploremusic.com, he wrote, “The last thing the Canadian music industry needs is for an important outlet like HMV go the way of Sam the Record Man. And A&A Records. And Tower Records. And Virgin Records. And—oh, you get the point.”