HMV’s owner Doug Putman has spoken to Music Week about the future of the chain and physical music following its reopening.
In the latest issue, Putman calls on the music industry to back HMV as it tries to regain some momentum after lockdown – and warns on a possible change to the product mix if suppliers don’t fully support him.
HMV stores were able to open from June 15, in line with other record shops. The entertainment chain introduced strict safety measures, including social distancing signage, screens and sanitiser.
Shoppers returned to HMV and Fopp from last week, and Putman is confident that vinyl fans will accept the new normal.
“I think that's just the culture, if you love being in an HMV,” he said. “We just have really great customers.”
HMV also launched a new personal shopper service, which enables customers to leave a list with staff, who could also provide recommendations.
“In this day and age, you have to be what Amazon isn't,” said Putman. “Amazon is really easy to order from and just get your product from. So what HMV has to be is everything that they're not – a brick-and-mortar store, which has very knowledgeable staff.
“When I bought the chain 16 months ago, the one thing I heard from everyone, whether it was customers or suppliers, was that HMV had super knowledgeable staff. A customer can talk to one of our staff and they can give a quality recommendation that fits in to what the customer seems to like and want. And that's just something that I find almost no one else can do.”
People will still want to buy a physical format, whether it's a CD or vinyl
Physical sales have bounced back to their pre-Covid market share with the reopening of stores, although retailers had already made up some of the lost ground during lockdown with online sales.
With the market moving to streaming, CD sales for the overall market were still down 47% year-on-year last week. But, based on his experience at Canadian chain Sunrise Records, Putman believes the format still has a future.
“I always tell a story that seven years ago, when I bought Sunrise, the buyer of CDs at the time said, ‘You know, the CD has been dead for 10 years, that's what they tell me,’” said Putnam. “So I think it's one of those things where sometimes we're too quick to say, ‘iTunes is going to kill it’; then we're too quick to say, ‘streaming is going to kill it’. What we're seeing is that, in my belief, nothing really ends up killing it. People will still want to buy a physical format, whether it's a CD or vinyl, and I think they will continue to do that.”
Vinyl has suffered less during the lockdown, although Official Charts Company figures show a 32% year-on-year decline in units for the overall market last week. But the week-on-week sales increase for vinyl last week hit 28%.
“Vinyl has always performed really well for us,” said Putman. “Catalogue outperforms [the market] for HMV, so catalogue has still been really strong. CD is similar in that new releases are strong, but really catalogue drives our business. It’s the same when we look at our studios and visual suppliers: new releases are good but catalogue is HMV’s really great sweet spot.”
Putman admitted that the business had been hit, following a decent Q1 for HMV before the pandemic.
“Look, it's never good to take a pause, because of the momentum that we had,” he said. “But I do believe that the customer is going to come back. Streaming for the labels is very important, clearly it's where they're making a lot of their money.
“HMV may take a backseat and be less relevant and less important to them from an overall business standpoint. [But] from a physical standpoint, I still believe HMV is very relevant and very important – not just to physical product but just to the high street.”
While streaming has become more significant for artists during the pandemic, with physical releases pushed back, Putman still sees HMV as a linchpin of many campaigns.
“HMV is still really important for most artists to hit the No.1 spot,” he said. “And we're really good at helping discover new artists that maybe people haven't heard of. Does Taylor Swift need HMV? No, of course not. We have to be realistic on where we're really good as a company, and where we add value to our suppliers.”
In the new edition of Music Week, Putman voices concern about the support of some suppliers for physical music. But he stressed that the industry has backed HMV during the pandemic.
“HMV suppliers have been fantastic since I've owned it,” said Putman. “As a general rule, they've been great, but you know in every bunch there's always one or two that are tougher than others. As a whole, I I've been really impressed and throughout Covid, 95% of them have been really, really helpful, and we couldn't have done it without them.”
To read the Music Week magazine interview with Doug Putman, subscribers can click here.
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