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  1. #1
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    Default HMV saved by the Film and Music Industries






    For a few years now, HMV - the UK's only national chain of dedicated optical media stores has been struggling to stay afloat. A few weeks ago it looked as though the banks were about to pull the plug on the struggling chain. However, the film and music companies suddenly woke up to just what a serious loss for them HMV would be should it disappear.
    Accordingly Sony, Universal, Paramount, Disney, and Warner Brothers have all obtained a total of 2.5% equity into the firm. In return they get to shoulder the risk for stock.
    Currently 180 million in the red, HMV reckon they can now halve this in 3 years and that does not include the upcoming sale of the live entertainments division which could net them 75 million and reduce this debt even more considerably...

    Personally I am glad to see HMV survive as the High Street would be the poorer without a dedicated outlet for optical media.
    Lovers of their steelbook exclusives will also be delighted by this news and with the film industry buying into the chain big time, I think it is not unrealistic to expect to see a lot more of these items.


    http://www.ft.com/cms/s/0/bc4a4df0-4...#axzz1k5RIEVY3

    http://www.gizmodo.co.uk/2012/01/hmv...film-industry/


    To me the below is where HMV went wrong - in store pricing compared to the online outlets (including its own!) was simply ridiculous:


    http://www.filmdetail.com/2011/08/27...l-amazon-fopp/

    Hopefully more realistic in store prices going forward now.
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  2. #2
    Thanks Limey, very interesting news.

    Last year I visited a friend in Croydon (near London) and we went together to a HMV shop. Damn high prices! I went out finally with some cheap DVDs for my daughter.....

    My opionion, sooner or later they will be bankrupt anyway, sadly.
  3. #3
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    Quote Originally Posted by Noibeli View Post
    Thanks Limey, very interesting news.

    Last year I visited a friend in Croydon (near London) and we went together to a HMV shop. Damn high prices! I went out finally with some cheap DVDs for my daughter.....

    My opionion, sooner or later they will be bankrupt anyway, sadly.

    It looks as though they have a breathing space of at least 3 years at this stage. The backing and investment from both the Film and Music Industry is salient though because it looks as though they do not want to let them go out of business full stop. The banks have given them better terms for their debts as a result and the share price has nearly doubled with the announcement of this deal.
    HMV seem to be diversifying their business anyway - their streaming site is now up and running and they are looking to go into hardware such as ipods and head phones in a big way too - a dedicated store to those items has already opened.

    They have to sort out their in store pricing though, maybe now that the suppliers are shouldering the stock risk, this will allow them to reduce prices accordingly.
    They had certainly better do so...
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  4. #4
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    Looks as though this time the saviour is Hilco in tandem with the industry:

    Restructuring specialist Hilco has taken effective control of music and DVD retailer HMV.

    Hilco, which already owns HMV Canada, has bought the debt of HMV from the group's lenders, Lloyds and Royal Bank of Scotland.

    The debt deal paves the way for Hilco to gain full control of HMV.

    HMV's administrators Deloitte said they were working closely with Hilco as they "continue to seek a positive outcome for the business".

    "Stores continue to trade and at this time we remain hopeful of securing a long-term future for HMV as a going concern," said Nick Edwards, joint administrator at Deloitte.

    HMV has been hit by competition from online rivals, supermarkets, and illegal music and film downloads.

    'Viable' business
    HMV's estimated debt was about 176m, but Hilco is believed to have paid much less than this to acquire it because the retail chain is in administration.

    It is understood that the debt had to be purchased as a prerequisite to taking full control of HMV.

    Hilco said in a statement: "Hilco UK confirms that it has acquired HMV's debt from the group's lenders. It has not bought the business itself.

    "Hilco believes there to be a viable underlying HMV business and will now be working closely with Deloitte who, as administrators, are reviewing the business to determine future options."

    An industry group of music labels and film studios, including Universal Music and Sony, were reported on Monday to favour a buyout of HMV by Hilco.

    Hilco bought out HMV Canada from parent HMV group in 2011 for 2m, and this history means suppliers are likely to give a Hilco-owned HMV in the UK more favourable credit terms.

    In Canada, Hilco said the support of HMV's key suppliers had been of "critical importance" to the business's performance.

    HMV has 223 UK stores in total, and a workforce of about 4,000.

    On Monday, the administrators for HMV said that the retail chain would start accepting gift vouchers in stores from Tuesday.

    Deloitte, which had previously said that gift cards could not be redeemed in stores, said it had made the change after assessing HMV's financial position.
    http://www.bbc.co.uk/news/business-21141209
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  5. #5
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    It seems to me that all optical media high street stores are going out of business for good.

    The benefits of cheaper prices and convenience of ordering online are far greater than making your way through city traffic, a crowded store and wait in a long line to buy a high priced BD/DVD/CD.

    Downloading music from Amazon or iTunes makes it even more convenient still for people who are happy with the quality of 128kb MP3s. You can pick which tracks you want and you don't need to buy the whole album.

    If you know where to look on Amazon.co.uk or Amazon.com, the possibilties of how much you can save are almost limitless.

    I don't see this as a bad thing, but merely a reshaping of the industry. I don't understand why the music companies don't spend more money on data protection for their property. Piracy and illegal downloads have also greatly damaged the industry.
    Last edited by JSmith; 01-23-2013 at 07:38 AM.
  6. #6
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    See, HMV suffers from FYE syndrome: Selling at MSRP or as close to it as possible. This is the deal killer for a lot of people in the digital age now. That is the main reason why I no longer buy from places like B&N: I can get it cheaper off of Amazon. HMV suffers from that as well and fighting with itself (another case of Best Buy syndrome, where for years the store and online stores were 2 separate things all together...thankfully that ended in time).
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  7. #7
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    Some people may think I am not with the times, but I still prefer having an optical disc. I would not like to rely on having a solid broadband connection before I can get access to media. I think that optical discs will still exist even after stores like HMV are long gone, but probably only be available by mailorder.
  8. #8
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    Quote Originally Posted by JSmith View Post
    It seems to me that all optical media high street stores are going out of business for good.

    The benefits of cheaper prices and convenience of ordering online are far greater than making your way through city traffic, a crowded store and wait in a long line to buy a high priced BD/DVD/CD.

    Downloading music from Amazon or iTunes makes it even more convenient still for people who are happy with the quality of 128kb MP3s. You can pick which tracks you want and you don't need to buy the whole album.

    If you know where to look on Amazon.co.uk or Amazon.com, the possibilties of how much you can save are almost limitless.

    I don't see this as a bad thing, but merely a reshaping of the industry. I don't understand why the music companies don't spend more money on data protection for their property. Piracy and illegal downloads have also greatly damaged the industry.
    Well I think what has hurt the music industry a lot is that they didn't force the consumer market onto the DVD shortly before Napster.
    When the movie industry thought itself to be threatened by TV they went to widescreen. Later as widescreen TV's are now owned in most homes they went to 3D.
    The music industry has not had a comparative challenge like this since Napster and others. They failed to see the threat on the horizon and when they did they responded like idiots. That's what complacency will get you though.
    If they had thrown out the CD and replaced it with the DVD, offering both 5.1 tracks and 2.0, then I doubt Napster would've gained as much traction as it did. I have doubts that many people would've given up 5.1 and even if they thought they could try it the data pipeline at the time was too small for most.
    MP3's worked because of how relatively small the cd's were in data then you add the compression of the MP3 that most can tolerate and you can shoot it down the pipe. Consider trying that with 5.1 audio.
    As it stands now, every time a cd is being pressed, plastic is being wasted given how much more data DVD's can store. Shut down that equipment and move it all to DVD pressing and some to Blu-ray.
    In regards to HMV I hope they stay alive and move back here. I want them to truly be international, selling what they sell. They have them in England, Canada, Japan so why not America? Expand their catalog as well. Let me order the Miyazaki Blu-ray's from their Japan HMV store and ship it to the physical store in the United States.
    I mean one of you here speculated movie and other companies don't want the B&M stores like them to go away so don't the movie companies look the other way on imports with HMV? In fact, give HMV a silent nod that will be allowed.
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