Mixed signals: buying records on your high street

Barely a fortnight after Sainsbury’s announced that it will stop selling CDs and DVDs in the face of streaming services dominating media consumption, and just a few days after the second Record Store Day ‘drop’ for 2021, dear old HMV has celebrated its 100th birthday by announcing that it is planning to 10 new shops this year.

While this is hardly a raging endorsement of physical media continuing to enjoy rude health, it at least is a positive sign that the oft-predicted death of such formats is being kept at arm’s length. Sainsbury’s said that its decision was the result of consumers increasingly getting their music and films online, although conversely it added that it would continue to sell vinyl records in some stores, a reflection of vinyl’s hipster appeal amongst everyone from teenagers to the middle-aged getting back into the format and succumbing to impulse buying while out doing the weekly grocery shop.

Notably, Sainsbury’s supermarket competitors are continuing to sell CDs and DVDs, so the decision isn’t necessarily the shock headlines might suggest. There is no denying that CDs, DVDs and even Blu-ray Discs are in long-term decline: I’ve blogged before about the minor conflict this has placed me in, having worked for Philips on the consumer electronics industry’s launches of DVD and Blu-ray Disc, the company having co-developed the CD with Sony in the decade before, starting the rise of the 12cm ‘optical’ disc as a multi-faceted carrier of digital entertainment and media content.

But, progress is progress. The irony of all this is that the CD and its various offspring were meant to kill off the vinyl record, and yet that format has enjoyed a resurgence, with UK salesreaching 4.8 million in 2020. Indeed, the BPI says that LP sales will eclipse CDs this year for the first time since the late 1980s. “Demand [for CDs] has been following a long-term trend as consumers increasingly transition to streaming,” a BPI spokesperson told the BBC. “Resilient demand is likely to continue for many years, enhanced by special editions and other collectible releases. If some retailers now see the format as less of a priority, this will create a further opportunity for others, such as independent shops and specialist chains such as HMV, to cater to the continuing demand.”

While I rarely buy a Blu-ray edition of a film or a box set these days (I now share a house with my family and don’t have the space for masses of media as I had in my single days, so online services make a lot of sense) I do still buy music, with a combination of vinyl, CDs and digital copies, depending on my mood, collectability (e.g. special editions) and even whether I’m purchasing an album on spec, as opposed to a must-have I might want to have on display. I wouldn’t be the only one who sees vinyl collecting as much as an Instagram fetish as about music appreciation. I am also of the High Fidelity mentality, one of those middle-aged men who still derive pleasure from rifling through racks in musty independent shops staffed by ever-so-slightly intimidating cooler-than-you types. It’s an age-old tradition and long may it continue.

There is, though, still a place for the HMVs of this world. When the chain went into administration in December 2018, threatening anyone with entertainment media on their Christmas lists, it cast a pall over the future of buying and owning records. One of HMV’s attractions, from a mass consumer point of view, was that it made ‘supermarket’ shopping for entertainment easy, with multi-buy bundles (e.g. “2 for £10” offers) a cunning ploy to part cash for more than you might have entered a shop in search of. My CD collection is certainly the beneficiary of deals like that (along with regular holiday raids to American chains like the now defunct Tower Records and Amoeba, particularly during the days of more favourable dollar-pound exchange rates).

News that HMV will open 10 new outlets this year is a glimmer of hope on a couple of counts: firstly, COVID-19 has hit the ‘non-essential’ retailing sector hard thanks to high street lockdowns over the last year and a half. This has been accompanied the double- or even triple-whammy of media sales shifting to core online retailers like Amazon for home delivery convenience, along with the continuing growth of streaming services. Doug Putman, the Canadian entrepreneur who bought out the HMV brand from administration in 2019, and has since reopened 107 sites, has warned that the future of on-premises retailing in the UK is still not guaranteed.

Doug Putman
Picture: Joe Fiorino/Canadian Broadcasting Company

Putman says the government needs to urgently fix business rates, which are based on property rates but are notoriously slow to adjust to market levels, resulting in retailers and other high street businesses continuing to pay very high costs in the face of rising competition from online services with a lower cost base. “If the government doesn’t fix the rates, high streets are going to see a lot more vacancies,” says Putman. “Business rates just don’t make much sense. You can pay zero rent and not make a profit on a store as rates are too high.” 

As seen recently by announcements by Gap and other fashion retailers, in-store shopping is facing an existential crisis, and the pandemic hasn’t helped, even accelerating its demise. It is sad, says Putman. “Outside of the illness, when you look at people’s lives, a big part of that is walking outside and going to the high street and doing some shopping. When you see bookstores and coffee shops, and HMVs, closed and everything online it is not as much fun as it used to be. Hopefully people have seen this world where everything is Amazon and it is not all that great.”

Steven Wilson launches his album To The Bone at the HMV store in Oxford Street

One of HMV’s priorities will be to restore its flagship to London’s Oxford Street. The retailer opened its first HMV shop in 1921 when, as the Gramophone Company (which became EMI in 1931), it took over an old clothing shop at no 363. The shop was closed as part of the administration process at the end of 2018, but Putman has said he would like to find a new location in Central London. The prospects of that, however, amid continuing schism in both domestic and foreign tourism to London, might make it unlikely in the short term, given that the cost of commercial property in the city is driving retailers out, rather than drawing them in.

The other challenge for HMV will be market dynamics. While Sainsbury’s might be getting out of CD and DVD sales in the face of slowing turnover for the formats, others, like Tesco and Asda will continue to take “market share” by undercutting traditional music retailers - be it HMV or the independents. Industry writer Graham Jones has noted that supermarkets stick to a narrow choice of CDs from popular chart acts like Ed Sheeran, rather than back catalogues and more eclectic fare. Indeed, in 2008 Jones discovered an independent record shop buying bulk copies of the latest Coldplay CD from Morrisons, rather than wholesale from the record company because the supermarket offered them for less.

Speak to more hardcore music consumers, as opposed to impulse shoppers, and the love of physical media continues to drive behaviour. One of the pillars of CD and vinyl buying to begin with, over streaming, is the belief that it’s always available, a point that does suggest continuing Luddite sentiment that the Internet can go down, or that titles can disappear due to licensing windows ending. This conveniently ignores the fact that lugging 12-inch records and even CDs around isn’t so convenient if you don’t have anything to play them on. But there’s no denying the emotional bond that people - yes, like me - have to the physical format. “I can't imagine a world where media is not in your hands and not yours,” one seasoned consumer recently told the BBC in response to the Sainsbury’s news.

There are, then, two issues at work when it comes to HMV expanding, a little further, as it tries like so many other bricks-and-mortar retailers to remain afloat on the high street. Firstly, there is the inexorable rise of online shopping - regardless of the pandemic - which is a convenience that is now just an established fact. And secondly, in HMV’s case, there is the cultural shift away from physical ownership as the shift continues to digital.

“People obviously love going out shopping,” Doug Putman told the BBC this week. “They like touching and feeling and that’s something that online is not going to replace. He remains sure that the high street, despite increasingly gloomy predictions, will not become one long parade of charity shops and coffee chains, as so many have become. “I’m still very optimistic on the [HMV] business and business as a whole on the high street,” Putnam added. “I still think the high street is just something so special.” He has a point, but it’s one that flies in the face of convention, and that high streets have become centres of the service economy rather than the destinations of discovery they once were. I do know that if HMV were to open up round the corner from me I’d probably be forever in it, but I suspect that I - and perhaps my vinyl-loving teenage step-daughter - would be the exception.

Deserting island discs

It used to be that you knew you were getting older when policemen appeared to be getting younger. Now it is technology which might still seem new but has aged incredibly quickly. Over my career in tech PR I've seen technologies rise, arc and disappear in what seems like the blink of an eye: as part of the Philips PR machine in the '90s and Noughties, I was involved in launching several consumer electronics formats, including the DVD, the recordable CD, the recordable DVD, the Digital Compact Cassette, Digital VHS, CD-i and, latterly, Blu-ray Disc. Most, it has to be said, have either been superseded or didn’t survive infancy, even though their patents - lucrative in some cases - have been absorbed into the revenue streams of the companies who created them.

Today, Philips no longer invests in consumer electronics, preferring to be a healthtech concern, presumably because the margins on capital equipment like CT scanners for hospitals far outstrip the meagre profits to be made on a TV (for such a major purchase, you'd be amazed how little the manufacturer makes on it...), although brand licensing has ensured the Philips name has remained in the home entertainment space. The reality, however, is that, 11 years after Apple introduced the iPhone, the smartphone has largely replaced TVs, video players and hifi systems amongst young consumers. Look at Apple’s marketing of its latest iPhone, even making a virtue of bigger screens and better speakers purely to appeal to those who prefer to watch movies on something barely bigger than an old fashioned cheque book.

Given that streaming via platforms like Netflix, Amazon and iTunes, plus broadcasters’ on-demand and catch-up services, has become as commonplace today as terrestrial TV and Blockbuster video rentals were 30 years ago, it’s not surprising to, this week, see news from the John Lewis department store chain that it is drawing the curtain down on the DVD player, having seen a 40% drop in player sales over the last year. While this isn’t necessarily a vital-signs indication of the health of DVD itself, the revelation - contained in the 2018 John Lewis & Partners Retail Report - is a sign that one piece of technology beneath the living room television is in decline. What this doesn’t say is that sales of Blu-ray Disc players - the ultra-high definition disc format that was developed (by a consortium of technology companies including ‘usual suspects’ like Philips and Sony) largely to succeed DVD - are still relatively healthy, even if, like most ‘high-volume electronics’ devices, price erosion has brought down the cost of a Blu-ray player from around £1000 in 2002 to as low as £70 for a basic box today.

DVD does now date back to what is a lifetime in technology: when I started working for Philips at the beginning of 1995 there was already, in the finest traditions of the consumer electronics industry, a battle raging between competing technologies to be considered the 'standard' for a CD-sized disc that could store entire films in one go. In the blue corner was Philips and Sony with its Multimedia Compact Disc (MMCD) format. In the red corner, a collection of tech companies like Toshiba, Matsushita, Hitachi, JVC, Pioneer and Thomson who, along with their Hollywood buddy Time Warner (i.e. Warner Bros) were backing Super Density Disc (SD). While industry observers and trade media hacks lofted their eyes skywards at the prospect of another Betamax-v-VHS battle, a round of the sort of shuttle diplomacy normally applied to preventing actual wars brought peace to the world of digital video and, at a press conference at the IFA trade fair in Berlin in August 1995, declared their eternal love for each other. DVD was born.

The news that John Lewis is now, 23 years on, dropping DVD players from its shelves is no more than a reflection of its own stocking strategy, says Gill Hind of Enders Analysis, who points out that it's as much about the retailer's desire to keep its shelves full of the latest innovations which carry higher sticker prices and better margins. Beyond the headlines, the DVD itself, on the other hand, soldiers on, just.

"I think the bigger surprise is just how resilient the format continues to be," says leading home entertainment journalist Steve May. "Sales data from the British Association for Screen Entertainment, covering the first six months of 2018, reveals that DVD accounted for 64.7 per cent of video sales. Digital formats trailed at 22.4 per cent, with Blu-ray Disc following behind with 12.9 per cent. Streaming services "may be picking up subscribers at a rate of knots" says Steve, but those who want the best in picture and sound quality are sticking with the physical format of Blu-ray Disc. And the innovation cycle in Blu-ray goes on: “Blu-ray players replaced dedicated DVD players in terms of value some time ago," he adds, "just as the latest Ultra High Definition Blu-ray Disc players are now ousting regular Blu-ray decks.”

While the higher-end quality of Blu-ray remains popular with videophiles, DVD is hanging on, probably due to the combination of convenience, good picture quality (when we demonstrated DVD versus VHS it was the difference between a clean and dirty window) and, above all, dirt-cheap prices. No surprise, then, that one in two DVDs are sold as point-of-sale impulse buys at supermarkets, while 10% of DVDs get snapped up at supposedly 'non-traditional' retailers, such as garden centres and petrol stations, according to the British Association for Screen Entertainment. While streaming has clearly become the dominant vehicle for watching movies at home (accounting for more than four-fifths of the £2.7 billion UK video market last year) Steve May maintains that “there is plenty of life still in physical media”. For example, Christopher Nolan's Dunkirk sold 640,000 copies on DVD and Blu-ray combined, while last year’s most popular film release - Disney's Beauty And The Beast - sold 1.5 million copies across both 'physical' and 'digital' formats.

Standalone DVD players may be going out of fashion but “backwards compatibility” in the Blu-ray hardware standard has meant that Blu-ray players can still play all those hundreds of DVDs currently piling up in living room cupboards probably only a few feet from the TV. Which means that disc libraries will remain for some time yet. The question is, what these ageing, dust-gathering DVDs will look like. Many in my own library were bought at the time when they were first-generation transfers. Home video companies have been very canny in re-releasing titles as formats have been updated (I actually own four different copies of Heat and have lost track of the versions of The Godfather in my collection...). At the same time, TV sets themselves have evolved. A year after the DVD was born, Philips introduced the very first flat TV, a 42-inch gas plasma number costing 30,000 deutschemarks, roughly £13,000 in today's money. Now, you can buy a 43-inch LCD TV for less than £370. It's not an entirely accurate comparison, however. That first flat TV was, frankly, rubbish from a picture quality point of view, but that didn't stop Philips selling every single one they made, often to achingly-cool advertising agencies (and one particular radio DJ...) wanting to be the first to own a TV set you could hang on the wall like a painting.

Television and video formats have often leapfrogged each other, much like Trigger's broom in Only Fools And Horses (17 new heads and 14 new handles in 20 years...), but today there is a narrowing of technologies. With broadcasters and streaming services offering premium content like football and film channels with 4K quality and, at some point in the not-too distant future, 8K resolution, it's arguable that the optical disc that has lingered on since the CD (or, even earlier, LaserDisc) will be discarded to museums. I'll admit, as I spend an increasing amount of time on planes, having a library of downloaded movies on my iPad, with its Retina screen and Bluetooth headphones, is a convenient way of catching up with films and TV box sets. But nothing can beat the experience of watching at home on a big screen TV (70-inch is now the new normal, according to John Lewis, compared to only 36-inch in 2010), and with Blu-ray continuing to set the standard, the spirit of the DVD lives on through its successor. And you still have to get out of your seat to put it in the player, but then that was always part of the fun, wasn't it?