On Friday HMV Canada was placed into receivership and outlined its intent to close its 102 record stores in that country. HMV stores in the UK are not affected. According to a report by the Financial Post, HMV owes its major suppliers, including music labels and movie studios, about $42.6 million as of Dec 31.
If ever there was an indication that streaming is taking over as the main music distribution method worldwide, this is it. Canada is the world’s seventh largest recorded music territory, and the sixth biggest for CD and vinyl sales, which generated more than a $100 million last year. The HMV store closings are sure to impact that number as Canadians will find fewer places to purchase physical product even if they want to.
HMV was actually purchased by restructuring experts Hilco in 2011, but that company hasn’t been able to turn it around in an industry where fewer consumers care about physical product anymore. As a result, the company has suffered losses of around $20 million every year since .
Once again we see how technology has changed the music industry. Most every time a new more convenient (that’s the key) format is introduced, the industry and music consumers adopt it. This goes back to the days of piano rolls, followed by shellac records, vinyl records, cassettes, the CD, MP3s and now streaming. Sound quality doesn’t matter, its convenience that the consumer cares about. It’s simply easier to have access to tens of millions of songs on your phone than it is to own music anymore. Plus the inconvenience of going to a store to buy it (although many record aficionados claim that’s one of the best parts) is not in sync with the way most goods are purchased or consumed these days.
It’s a shame to see these stores close, but it was only a matter of time. The public knows what it wants and when it comes to music, its not something that you buy in a brick and mortar store.