The HMVs vs the iTunes

The HMVs vs the iTunes

Summary: Brick-and-mortar retailers will need to keep evolving to battle the increasing presence of digital stores.

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After what seemed like forever, Apple finally made available its iTunes Store in 12 Asian countries last week including Singapore, Hong Kong, Malaysia, Thailand and the Philippines.

In a report we ran this week, market watchers say Cupertino's media store will prove a growing threat to Asia's brick-and-mortar retailers which already face increasing pressures from e-commerce, illegal downloads and rising smartphone adoption.

iTunes Store also offers exclusive content which the industry analysts say will pose a threat to merchants in Asian markets such as Hong Kong and South Korea.

Retailer HMV, though, told us its business remains strong because it has evolved from being just a music store to one offering books, games, electronic goods, accessories and even fashion apparel. Michele Tan, a company spokesperson, said: "The future is definitely in digital formats but that is just part and parcel of the natural progression of entertainment. Vinyl and cassette tapes were replaced by CDs, and eventually CDs will meet that same fate be it by digital or another format."

Benjamin Cavender, associate principal of China Market Research, urged affected retailers to add new revenue streams or look at ways to offer convenient purchases and niche content not available online.

I think that's an important point. I have a soft spot for music stores, having spent hours in the past browsing through the jazz section, trying out new albums before deciding if they're worth buying. But, even a die-hard fan like me has been spending less and less time in a CD store. I've even taken to downloading tracks from iTunes Store, even though I know I have them somewhere in my CD collection but was too lazy to dig out, rip and add them to my playlist.

After reading the report this week, I decided to visit the nearest HMV outlet, spend some moolah and do my bit to help "keep the business going", I joked to my colleagues.

I also wanted to compare the prices of DVD titles and realized several were available in HMV but not iTunes Store. Newer releases such as Mirror Mirror and Toy Story 3 and classics like Breakfast at Tiffany's and Sunset Boulevard were on HMV shelves, but not available for download on iTunes. And the two classic titles were going for a low S$9.90 promotional price.

And when titles were available on both sites, prices differed. Crazy Stupid Love, for instance sold for S$16.90 in HMV but S$19.98 on iTunes, while This Means War was cheaper on the Apple store at S$19.98 compared to S$24.90 in HMV.

Whether or not its business is indeed still thriving, HMV is obviously doing what its darnest to stay in business. Its store offers various promotional items including DVD and CD which prices had been slashed by up to 50 percent, and Buy-2-Get-1-Free DVD titles.

More importantly, it stocks items such as old jazz albums and music videos I may not otherwise be able to find easily on other online music stores, which cater mostly to a mainstream audience.

If anything, that would be the one reason I'll continue to visit stores like HMV. However, it'll only be a matter of time before the likes of iTunes catch on to this and start offering exclusive content for different groups of consumers such as jazz music lovers and Korean wave fans.

Brick-and-mortar retailers will need to watch the space closely and keep evolving to stay relevant. It'll be interesting to see what the likes of HMVs will morph into then.

Topics: Emerging Tech, Apple, E-Commerce, Asean

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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3 comments
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  • Music retailers have been hamstrung by their own suppliers

    Music retailers know full well that they are losing against online sales, but they have been betrayed by their own suppliers, the media cartel. They operate in 1940's mode because they are still constrained to sell pre-packaged products (albums) with all of the attendant cost an inflexibility.

    There was a "store of the future" concept described a few years back, where customers could select from standard albums or on-demand CDs burned in the store. Kiosks could also copy selections to a memory stick, media device, or user account (like iTunes). Customers could interact with displays and kiosks, socialize and purchase accessories. Physical stock could be limited but diverse, allowing customers to simply scan the product with their smartphones to download all or part of an album.

    The cartels said "No. Hell no." They felt that Apple and Amazon could be "contained" and that if they restricted sales to pre-cut albums, it would keep average sales prices up. Apple wasn't looking for new competitors, so it actually agreed with the cartels not to participate in any "hybrid" sales models.

    So music stores ended up as victims. The discount stores (Walmart, et al.) sell the vast majority of physical units, and the few remaining specialty shops in the US aren't really music stores, they happen to sell music alongside clothing, electronics and assorted junk. The cartels complain about declining revenues and blame file-sharing, when in fact it is their own bad business decisions that brought about the situation. iTunes proved that people will pay for music online, and a closed-down retailing sector proved that consumers were not willing to be fleeced anymore. Time will tell what happens next.
    terry flores
  • The future depends on the consumer..

    I have switched to high definition music downloads because I am tired of the compressed audio that is available on-line. It may be fine in noisy environments and on cheap audio equipment but not on high end systems. Sometimes the difference is subtle, other times it is very noticeable. I still buy CD's and rip them as FLAC files, as a matter of fact I have to rerip most of my CD collection. (And I haven't even begun the process of digitizing my LP's)

    As for iTunes, I have not purchased anything there in a few years. I don't like the Apple philosophy nor the convoluted way I have to convert their M4P's to an MP3. The few MP3's I buy are from Amazon.

    So I agree that the Media companies have created this situation; but it started deteriorating well before the computer era took over. Remember tape recorders? Enabled people to borrow records and tape a copy. I can see Apple suffering the same fate when people start realizing that they are stuck in the Apple ecosystem and have no flexibility. Maybe everyone will go back to listening to music live. :-)
    Romas27
  • I Guess It's A Matter of Taste

    Ms. Yu says: "I have a soft spot for music stores, having spent hours in the past browsing through the jazz section, trying out new albums before deciding if they're worth buying."

    Okay, I suspect despite her credentials, I am older than Ms. Yu. Let's just say I'm old enough to have seen Herman's Hermits in a live performance.

    And I have spent MORE than my share of time in record stores, watching LPs give way to tapes, then CDs, and then finally seeing recorded media become...well, "medium-free."

    And there is NO WAY I could ever miss brick-and-mortar record stores, I don't care how "magical" they might have seemed at the time.

    For one thing, you go what some manager thought you should see in the bins, not necessarily what YOU wanted to see. Unless you happened to arrive on the scene before a fresh batch of "cut outs" (look it up, Millenials) had already been picked through, you typically didn't get to hear much in the way of "new music" the way any kid with a smartphone can access any time he feels like it (parental oversight permitting).

    I have been a Rhapsody subscriber since it first started as a streaming-to-your-p.c.-only service in the early 2000s. Over the years I've become MORE than accustomed to hearing virtually ANYTHING that happened to come to mind, immediately, without having to dig through stacks of records or figure out whom to borrow from, etc.

    I remember when you had Record Club of America, in the early 1970s. We kiddos thought that was a treasure trove! Nearly anything you could think of on LP (or even reel-to-reel or 8-track tape in some cases) was in their newsprint catalogue in tiny letters I was fortunately young enough to be able to read in those days.

    All you had to do was (1) Find the order form in the back and cut it out, (2) meticulously write in the order number on the form - better double-check to make sure you weren't accidentally ordering Doris Day rather than It's A Beautiful Day! - as well as all the other blanks, in legible hand in blue or black ink, (3) find an envelope and stamp and mail it off, and (4) wait six to eight weeks for delivery.

    Otherwise, as before, you were stuck with what some store manager at Musicland or Sam Goody, thought you should have available in his bins. Or he could special-order it for you, from his own extensive catalogue. Please weight 8 to 10 weeks for delivery. We'll call you.

    The past is often far more romantic in memory than in fact. Give me iTunes, Rhapsody, or anything other than the cut-out bins at K-Mart. PLEASE!!!!
    billaaa8