HMV and Blockbuster Go Into Administration

Blockbuster HMV logos
The current economic downturn and the ongoing evolution of the gaming, video and home entertainment industry has claimed another two victims this week. HMV has gone into administration after over a hundred and ten years of trading. High street video outlet Blockbusters has also confirmed it will be closing. Between the two, potentially ten thousand jobs could be at risk. From a human perspective its all very sad. Losing your job is never a good thing, especially in the present financial climate. Yet the reality is that the changing markets have left no place for these businesses and that the ongoing move from local to online retail will certainly claim more scalps before the year’s end.

It is on occasions such as these that a lot of forty something journalists get all misty eyed about the past and waste column space in the press with tedious eulogies to days gone by. However, like most forms of nostalgia it doesn’t hold up to much scrutiny. Do people really want to have to drag their arse to a local shop with limited stock and even more limited discounts? No of course they don’t. Love Film, Netflix, and numerous other forms of VOD have killed Blockbusters dead simply because the public votes with its pocket. HMV cannot compete with the likes of Amazon who have no premium property overheads to worry about in expensive locations. As for the games rental and trade in markets, then there are plenty of other outlets that will take up the slack.

HMV RIP

Now it is true to say that there are certain social economic groups who aren’t able or willing to make the change to online retail services. Usually this is age group specific or based around access to specific instruments of payment, such as a debit or credit cards. People such as my eighty three year old Father will always prefer to go to a store to buy items for cultural reasons. I’m sure many grand parents bought Christmas present recently from their local stores, unaware or unable to benefit from the discounts they could have enjoyed online. It should also be remembered that here in the UK we have an ageing population. However, this particular group of consumers where obviously not the core customers of HMV or Blockbuster or else the receivers would have been kept at bay. The reality of the situation is that these businesses failed because their consumers deserted them and they did not do enough to win them back.

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