The HMVs vs the iTunes

Brick-and-mortar retailers will need to keep evolving to battle the increasing presence of digital stores.
Written by Eileen Yu, Senior Contributing Editor

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.

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