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'Difficult' market weighs on HMV

BBC Entertainment News

 

Entertainment retailer HMV has warned that tough trading conditions mean its annual profits are set to come in at the bottom end of forecasts.

It added that while efforts to improve sales are "working effectively", group like-for-like sales fell 1.3% in the 12 weeks to 28 September.

 

Like-for-like sales - which exclude new stores - at its bookseller Waterstone's also fell 3.7% during the period.

 

HMV warned that conditions would remain "difficult" for the rest of the year.

 

"We now expect full year profits to be towards the bottom of the range of market expectations," HMV said in a statement.

 

The group blamed a decline in the overall value of the UK DVD and music markets for some of its current troubles.

 

According to HMV, the total value of the UK music market, including digital downloading, fell 14% between October and November.

 

The company said its international businesses had increased market share in both music and DVD, but added that like-for-like sales at HMV Asia fell 3.8% while HMV Canada's sales dropped 3.4%.

"We recognise that we face very tough and rapidly-changing markets and have to work hard to offset this," said chief executive Simon Fox.

 

However, the group's online businesses did offer some more positive news.

Sales at hmv.co.uk were up 200% on the same period on last year while waterstones.com had made "good progress" since its launch on 28 September.

 

Are any of you surprised by this news or not?

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Now that HMV sell most chart albums for £8-£10, it's not surprising that their profits have decreased.

 

That said, I'm sure they've still made huge amounts of money. They're at the bottom end of forecasts - they may have been forecasting a £1billion profits!

Also there's always a massive pre-Christmas slump. Articles like this prove nothing...apart from the sales up 200% part which is the only truth in the story. All it means is this has been a big year for record sales (albeit earlier in the year) and we should all feel very secure about the future of the record store (although I wish independent stores could register the same stats).

Now that HMV sell most chart albums for £8-£10, it's not surprising that their profits have decreased.

 

 

Yeah, Chart albums....great.... <_< They offset the discounts there by totally ripping off the folk who are into specialised music - Metal, Dance, World Music, Hip Hop, etc, if you look at the costs of the average CD in these sections it's £15 quid ffs.... Most people are wise to it now and are buying online.... Fukk HMV...And Virgin....

my sentiments exactly, Scott... not everyone is interested in chart fodder.... I refuse to pay more than £12 for a single CD, and most non-chart releases are easily £15 :blink:

my sentiments exactly, Scott... not everyone is interested in chart fodder.... I refuse to pay more than £12 for a single CD, and most non-chart releases are easily £15 :blink:

 

Thing is though, if you actually added up ALL the people who listen to the specialized music of all categories (all the Metallers, all the Dance fans, all the Hip Hop fans, all the Punk/Alt fans, all the Jazz fans all the World Music fans...), the total would actually probably be greater than those who only listen to chart fodder... WE specialist music fans are the majority and we are being ripped off.... :angry:

 

Yeah, Chart albums....great.... <_< They offset the discounts there by totally ripping off the folk who are into specialised music - Metal, Dance, World Music, Hip Hop, etc, if you look at the costs of the average CD in these sections it's £15 quid ffs.... Most people are wise to it now and are buying online.... Fukk HMV...And Virgin....

But they've reduced most of the back catalogue and non-chart albums in my HMV to £13. Even imports cost about that now.

 

Still dear for a CD but cheaper than they were. HMV used to charge £14 for chart CDs and £17-19 for the others.

Edited by Tim

Surely they're more expensive because, as you say, they are specialist CD's, and to me, when I hear the word specialist it means that it's of a higher class, therefore it would be more expensive, non? :unsure:

Surely they're more expensive because, as you say, they are specialist CD's, and to me, when I hear the word specialist it means that it's of a higher class, therefore it would be more expensive, non? :unsure:

 

Pardon my French, but the whole idea of "Specialist Music" is just a pile of absolute Corporate c**p Kelly... It's marketing, nothing more.. "Oh, we'll call it 'specialist music' so we can hike the price up a few quid even though per unit it doesn't actually cost us anymore to buy from our suppliers than the new 'Generic Boyband #101' album does..." I know someone who works in Virgin megastores and they told me that....

 

 

Pardon my French, but the whole idea of "Specialist Music" is just a pile of absolute Corporate c**p Kelly... It's marketing, nothing more.. "Oh, we'll call it 'specialist music' so we can hike the price up a few quid even though per unit it doesn't actually cost us anymore to buy from our suppliers than the new 'Generic Boyband #101' album does..." I know someone who works in Virgin megastores and they told me that....

Oh I see I was just trying to justify why the price might be heightened, I wouldn't necessarily call it specialist music, but you did, so I just analysed what you said. :lol: I agree with you though, they shouldn't be ridiculously priced, don't you always find that if you go to purchase part of an artists back catalogue they're like £17 as well? -_- It really annoys me, I was looking for Madonna CD's and most of them were hugely expensive, so I bought most of them for about £4 each in Music Zone. :lol:

the best music chainstore for me is Fopp these days - loads of corking bargains, and their chart stuff is pretty reasonable, too, except on DVDs.

Completely agree about the specialist sections and some of the back catalogue section too. Way too over-priced, that goes for the compilations albums in the back catalogue too, some of them are £18!!!! Disgraceful!

 

 

 

"Oh, we'll call it 'specialist music' so we can hike the price up a few quid even though per unit it doesn't actually cost us anymore to buy from our suppliers than the new 'Generic Boyband #101' album does..." I know someone who works in Virgin megastores and they told me that....

But it does cost them more to keep stock that's not going to sell.

There's a greater risk for them in ordering it - they're not guaranteed the sales in return.

In order to cater to all audiences, they have to store maybe one or two copies of hundreds of CDs that will sell in very small quantities so they need to have bigger stores and pay more in rent. They also have to print more labels, print more headerboards, employ more staff to stock more shelves.

 

Some of these albums just sit there for months at a time. So when someone does buy one, they want to charge more to make stocking it in the first place worthwhile.

 

A chart album will be in and out of the store in a week. They can order (and sell) the items in larger quantities, reducing the costs per item. So they charge less.

Edited by Tim

But it does cost them more to keep stock that's not going to sell.

There's a greater risk for them in ordering it - they're not guaranteed the sales in return.

In order to cater to all audiences, they have to store maybe one or two copies of hundreds of CDs that will sell in very small quantities so they need to have bigger stores and pay more in rent. They also have to print more labels, print more headerboards, employ more staff to stock more shelves.

 

Some of these albums just sit there for months at a time. So when someone does buy one, they want to charge more to make stocking it in the first place worthwhile.

 

A chart album will be in and out of the store in a week. They can order (and sell) the items in larger quantities, reducing the costs per item. So they charge less.

 

Well, they aint gonna sell it if they charge more than a fukkin' Internet CD company like Play or Amazon does are they.....?? Where's the logic..? If the CDs are just 'sitting there' as you put it, perhaps these idiots should be asking themselves why....

 

I'm sick of listening to people trying to justify 'rip off' Britain... <_< The facts are Virgin and HMV are charging more for their product than similar big chain stores in Europe and the US does, AND IT ISN'T ON!!!! Fopp manage to charge a fair price for imports and the more 'specialized' markets, and frankly, the independent, specialist stores in Camden market offer a better deal as well...

But it does cost them more to keep stock that's not going to sell.

There's a greater risk for them in ordering it - they're not guaranteed the sales in return.

In order to cater to all audiences, they have to store maybe one or two copies of hundreds of CDs that will sell in very small quantities so they need to have bigger stores and pay more in rent. They also have to print more labels, print more headerboards, employ more staff to stock more shelves.

 

Some of these albums just sit there for months at a time. So when someone does buy one, they want to charge more to make stocking it in the first place worthwhile.

 

A chart album will be in and out of the store in a week. They can order (and sell) the items in larger quantities, reducing the costs per item. So they charge less.

 

That's not true, Tim...I worked in HMV for many years, and the reason chart stock is cheaper is because record companies discount chart releases to make the shops buy more copies.... more copies = bigger displays = more exposure to Joe Public.

 

They do this with any old tat that is supposedly in the 'charts'... they GIVE you lots of 'chart' singles, just to get the c**p displayed on the racks.

 

The reason more leftfield stuff is more expensive is simple - it's not considered 'priority' to the record companies, so they don't discount the cost price, and the same with the shops - they know people will buy the obscure stuff because they may be the only shop in town who'll have it.... and at the risk of NOT having it, the customer will pay whatever it costs. The shops are more likely to sell those 5 copies of some obscure album the Observer Music Monthly recommended at £17.99 than they are to sell 50 copies of the latest boyband album which the record company has bunged them for £2 each and they're selling for a tenner.....

 

It has nothing to do with shop space or shelf-fillers....it's record company and retailers politics - and, frankly, they stink.

The main reason why 'specialist' CDs are often more expensive is purely becuase when record stores buy a chart album - they will usually buy it in a bulk of say 1000 copies, and thay means the cost of each unit will work out substantially less, as opposed to buying a less commercial CD in which the record store would probably ship in less than 10 copies, meaning the cost per unit will be so much higher. Also, independent label - who usually specialise in niche marketed music - can't match the buying deals their major label peers can, so it's a double-edged saw really.
I bought shakira's Spanish oral fixation album last year from there and it cost me around £15 ... over pricing ..

That's not true, Tim...I worked in HMV for many years, and the reason chart stock is cheaper is because record companies discount chart releases to make the shops buy more copies.... more copies = bigger displays = more exposure to Joe Public.

 

It has nothing to do with shop space or shelf-fillers....it's record company and retailers politics - and, frankly, they stink.

I didn't know that the record companies sold the stores chart stuff cheaper. Learned something new - Thank You.

 

That said, a store like HMV will have much higher costs than the music department of a big supermarket. And they're responsible for stocking more whereas Tesco can just sell 70 CDs at a time and no-one will complain.So that's why they'll charge more.

Edited by Tim

Well, they aint gonna sell it if they charge more than a fukkin' Internet CD company like Play or Amazon does are they.....?? Where's the logic..? If the CDs are just 'sitting there' as you put it, perhaps these idiots should be asking themselves why....

 

I'm sick of listening to people trying to justify 'rip off' Britain... <_< The facts are Virgin and HMV are charging more for their product than similar big chain stores in Europe and the US does, AND IT ISN'T ON!!!! Fopp manage to charge a fair price for imports and the more 'specialized' markets, and frankly, the independent, specialist stores in Camden market offer a better deal as well...

All I was doing was saying why they charge more. I'm not justifying it. They charge more because they can (i.e. because the people that go trekking into town for that one CD may not quibble about paying a few pounds more) and because I thought they had a reason (though Russ says I may be wrong about that.)

 

I'm not trying to justify the price hike for certain CDs at all. I think CD prices should be standardised.

Edited by Tim

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