SVI Magazine

It was predicted that it would be harder hit than any other town in terms of retail outlets being boarded up during the recession – and already Woolworths, Officer’s Club, The Pier and Adams have gone (there are even reports that Clinton Cards may be wobbling). So, imagine my dismay, being a music lover of the CD not download variety, when the (small) HMV suddenly closed and was boarded up. But, and here’s the amazing thing, on closer inspection the HMV branded poster in the window didn’t say “Thanks for all your custom over the years, but this branch has now closed so please use our Website”, but instead read “We’ll be open again when we’ve installed a lift to get you to the new first floor of our expanded shop”. Let’s read that again: “expanded shop” – who would have thought that, in the middle of a recession, on a street in a town that Bill Bryson might refer to as Amalgam, the local record shop, of all shops, would be expanding its retail operation!

hope for the high street
Things are looking quite good for the country’s leading high street music retailer, and we should be encouraged by this and the potential knock-on effects it could have for our industry. The UK as a whole saw a decline of 3% in volume terms for the recorded music market, but HMV outperformed the market by growing sales by 5%.

What’s a little more to be expected, though, is the shift in relative sales of music versus other entertainment formats. In 2007, music accounted for 37% of HMV’s sales; in 2009 that had declined to 28%, with the difference being taken up by gaming products (up from 14% to 24%). Vision sales have also gone up (7% compared to a market growth of 2%), and have maintained a pretty constant share of sales at around 45%. The advent of Blu-ray has seen this new format now account for 20% of all HMV’s vision sales.

So, why this fixation with HMV? It is pretty well the only national high street retailer of the things that bring our Hi-Fi and home cinema systems to life, and so I think we should pay careful attention to how it is performing and what it's selling. As long as HMV are selling 5-inch silver discs (of any variety), then we have a market and the potential for getting new people into what we do. I think it’s particularly encouraging that the download phenomenon hasn’t managed to totally kill off physical purchases yet. But let’s not rest on our laurels – we know the end of CD is coming, and we need to be ready for it.

In his presentation to the massed journalists at the BADA press conference (held just before the Association’s AGM), Chairman Simon Byles said, “They (dealers) will need to be most capable of guiding customers through the new technologies. Our technology is more complicated than the plug-and-play MP3 market – and more rewarding. Our equipment is software-upgradeable. HiFi is changing. Dealers need to know how to get the most out of it. A software-driven future. It is no longer just about mechanical engineering.”

going software
A software-driven future might be a scary concept, particularly if you make CD-players, but it’s going to happen. George Peterson, a US-based, 24-year industry veteran, who owns a record label and music publishing company, made the observation that, “The new format is no format. What the consumer would buy is a data file, and you could create whatever you need. If you want to make an MP3, you make an MP3. If you want a DVD-Audio surround disc, you make that." Interestingly, another record label has recently confirmed that it won’t be pressing CDs anymore – all its new releases will be made available as download files or, wait for it, vinyl!

A software-driven future also refers to the equipment we produce and sell, and how it works. Simon said it’s no longer about mechanical engineering and that is very true already – just look at the plethora of products that run software and the regularity of software updates that come out to make them do new things (or simply work in some cases!). The market is shifting and we must shift with it. BADA sees the future of our industry as one of 'productive cooperation', with all interested parties working closely together to ensure the prosperity of the industry and those who work in it. We can’t afford to let Hi-Fi become a quirky side show, and so we must work together to make things better and prepare ourselves for what’s around the corner. Or to put it in the chairman’s words, “We have to be better – offering better standards, better knowledge, better reliability, better communication and better distribution policies.”

BADA will play its part in preparing for tomorrow by creating a repository of information about the new technologies that will be accessible to its members via the Web and through the introduction of new training courses. Indeed, as I write, the new Salescraft course is up and running and is going down a storm with those who have attended it, whilst the technology-based Visioncraft course will be launched shortly. Following hot on their heals will be a marketing course to equip retailers with new skills to help them to reach new customers, and we have plans for networking and other IT-based training courses.

We’re doing our bit, but to paraphrase Lord Kitchener, “Your Industry Needs You”, so why not join us and together we can work to maximise our potential during the remaining plastic disc years and get ready for a brave new world.

Information on joining BADA can be obtained by emailing: .(JavaScript must be enabled to view this email address) or calling 020 8150 6741. We look forward to welcoming you.