The music industry is in trouble today because people are not listening
to music in the same way as they used to. Before when people wanted to
listen to music they had to buy CDs or listen to the radio but now we are
living in a digital world and when someone wants to listen to a song they would
go search it on YouTube or buy it from iTunes. They can also stream the music
from Pandora or similar services.
HMV was a retail store that was selling music and movie CDs and
DVDs. It went bankrupt recently. Why did they fail?
Not entering the new world
of technology!
(Patrick Murphy "3 Things HMV's Untimely End Taught Us About Digital Marketing Strategy")
HMV wanted to stay traditional and focus on brick-and-mortar
retail stores. Apple’s iTunes and Netflix are two companies that only have
online stores. These two companies are leaders in music and movies online. I
agree that HMV should have tried to go online earlier. The reason that iTunes
and Netflix are successful is that they saw their customers’ needs and the
reality is that no one is buying CDs anymore and everyone is living digitally.
HMV was not alone!
(Patrick Murphy "3 Things HMV's Untimely End Taught Us About Digital Marketing Strategy")
HMV’s competitors had a totally different strategy. Their strategy
was matched more closely with the current, online world. While HMV was focusing
on it’s traditional strategy of selling in retail stores, its rivals became
bigger and bigger by having stores that are only online. Of course everyone would
rather download their music than put their clothes on, go outside, drive their
car, get to the store, buy the CD, come back home, and finally listen to their
favorite music. It is also cheaper to download because a single song can be
downloaded instead of buying the whole album and it doesn’t have other costs
like gas for the car or the time it takes to get to the store.
Change is a must even if
it’s scary!
(Patrick Murphy "3 Things HMV's Untimely End Taught Us About Digital Marketing Strategy")
HMV’s core strategy was being a retail store and selling CDs. I
think its true that HMV was afraid to change its core business. But I think
there might be other reasons. Maybe HMV wanted to keep its strategy and stay
unique by being one of the few companies that still sell CDs and it wanted to
keep its loyal customers. Also, because of trade-offs, maybe they thought they
couldn’t have a successful retail store and a successful online store at the
same time. They didn’t want to give up their retail stores and they might fail
online because of strong competitors.
Seeing the future is
critical!
(Patrick Murphy "3 Things HMV's Untimely End Taught Us About Digital Marketing Strategy")
I think this
is one of the most important things that all companies should keep in mind. The
problem with HMV was that they just focused on the current environment and
ignored the future. Companies like Apple with iTunes are still based on buying
music but successful companies like Pandora and Netflix went beyond that and
they are not selling individual songs or movies, they use subscriptions. So
maybe iTunes will be the next HMV!
But can HMV be
saved? I think the only way that HMV can be resurrected is if they become an online
only company. They can imitate their competitors but they could offer music,
movies, apps, etc in a one-stop shopping online store at lower prices. But this
would be really hard to do.
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