Realist, not conformist analysis of the latest financial, business and political news

HMV Had A Double Strike Against It – Selling Old Technology Using Old Technology

That HMV has gone into administration for the second time in only 6 years should not come as all that much of a surprise. For the company was selling an old and outdated technology using an old and outdated technology. That is not – not normally at least – a path to wealth and riches. So it has proved as once again the equity holders have lost all and it’s only the creditors who might be able to pick something from the carcass.

That’s the way it’s supposed to be as well. Equity gets all the profits if things go well, they lose all in failure. We do call the system capitalism for a reason.

Still, this shouldn’t be all that much of a shock:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] HMV is about to appoint administrators for the second time in six years, putting more than 2,200 jobs at risk. The music and film retailer will call in administrators from KPMG after sales slumped over Christmas. It said sales of DVDs across the whole market had plunged by 30% on last year and retailers of all types were facing “a tsunami of challenges”. [/perfectpullquote]

The first problem was that the company was selling an outdated technology. Physical media upon which we’ve a copy of a set of digital data. That’s been superseded by varied forms of streaming and downloads. Sure, there are oldsters like us here but the general movement is away from having a physical copy of music, movie, game at all, and having just those bits and gaining them through some form of download.

The second strike against them is that they were using an old technology to do the selling. That physical bricks and mortar thing is, again in this age of the internet, an old technology. Retail services today are increasingly delivered online.

This might look like the same point, HMV was killed by digital. But there’s still a useful distinction there. What they were selling has gone from physical to online, the more general method of selling anything has gone from physical to online.

HMV had two strikes against it, it was well behind the curve in both technological senses. It’s not a surprise that it went down therefore really, is it?

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Morpork
Morpork
5 years ago

Altogether now

Morpork
Morpork
5 years ago

Altogether now: Digital killed the HMV store…
Think Buggles.

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