HMV Struggles On With Digital, Apple Is The Roadblock


Music and books retail group HMV is abandoning its sleeping-with-the-enemy tactic of selling books via Amazon, relaunching its own retail site at Outgoing CEO Alan Giles told The Independent that Amazon had seemed a pragmatic solution after a failed web retail attempt in the late nineties. He’s hoping old-fashioned customer service will differentiate both Waterstones and HMV’s online services by doing things like including staff-written mini-reviews, and making web content from things like authors’ talks at book launches. This is despite a company culture where the web had been seen as a rival to the brick-and-mortar stores, and Giles himself admitted that the fickle fads of MiniDisc, laserdisc and DAT made him wary about new technological developments. He cautions: “People are buying music digitally and it is growing very rapidly, but it’s still only about three per cent of the market.”
HMV clearly sees Apple as an obstruction as the company tries to adapt to changing music consumption habits. The company’s annual report states that “the ubiquity of Apple’s proprietary technologies continued to constrain the remainder of the market for digital downloads, including HMV Digital.” HMV spent $6.6 million starting up, its digital jukebox, and is hoping to capitalize on the non-Apple share of the digital market by supporting devices such as iRiver and Creative Zen. It charges $28 per month for unlimited music downloads. Tellingly there’s no break down for digital in the financial results, but the report also said HMV felt its performance has been impacted by competition from supermarkets and by online stores; 2005-6 turnover fell by 2 percent to $3.4 million and pre-tax profit by 20 percent.
Related: HMV Declares Download Price War In UK With 39p Tracks
HMV and Virgin Launch Rival Download Services in UK

This article originally appeared in MediaGuardian.

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