HMV – A casualty of the digital age?

Like many of my contemporaries, I’ve spent many happy hours browsing round HMV and leafing through CDs and DVDs and checking out new releases so I was saddened to hear that they’d called the administrators in this week.  However, it seems we only have ourselves to blame, as although many of us may browse in-store, more and more of us then go online and download or order a cheaper copy and as HMV has been lacking a coherent digital strategy we use a competitor more often than not.

Our Ipsos MediaCT Tech Tracker suggests that I am not the only one who uses digital more and more.  We have been tracking the rise of digital for the last couple of years and in November 2012 28% of us claimed to have bought a physical CD and 26% had downloaded some digital music in the past year. Digital sales have been slowly rising over the past few years, while buying hardcopies has seen a similar slow decline. The same seem to be true for movie consumption. 30% of people might have said that they have bought a DVD in June 2012 but this is still 15% less than it was January 2010. So what happened?

Not only is the internet now nearly a universal commodity (nearly nine in ten of us can now access the internet) but the rise of Smartphones has made downloading music and films something that can be done from anywhere, not just available in store or at home using your PC. We have become increasingly used to being able to download audio or video content without having to enter a store and often also without having to wait for something to arrive via post. With the arrival of 4G last year downloading music or films has become even faster for some smartphone owners. Unsurprisingly our Tech Tracker found that  listening to music and watching movies are the two activities that owners said they would engage in more with 4G.  And with huge back catalogues, we don’t have the problem of our album choice being out of stock and having to be ordered!

Additionally there is also the price aspect. In a time of recession where we are all bargain hunters, the internet offers a nearly inexhaustible choice of retailers. More often than not buying a DVD or CD online or as a digital copy is cheaper than going into a store to do the same. This even goes for the websites of actual retailers like HMV.

So in the end HMV’s troubles might be a direct effect of the rise of digital and the freedom it brings the consumers but that does not make it any less of a shame. What remains to be seen is where the future for the music retail industry lies.  Although it’s not necessarily over for HMV yet, many commentators are talking about an evolution, which may offer a much needed boost for independent record shops who will become the grazing ground for those of us that enjoy a browse around the record shop.  I hope this is the case as I for one would miss it if I could only buy my films and music online or at my local supermarket.

You can find the latest Tech Tracker report here.

Written by Gavin Sugden, Research Director, Sarah Gale, Senior Research Director and Ronja Damian, Marketing Assistant at Ipsos MediaCT. Follow Ipsos MediaCT on Twitter @IpsosMediaCT.