Citing “unsustainable” market conditions in the face of declining package media retail, venerable United Kingdom home entertainment retailer HMV filed to appoint administrators (a form of bankruptcy) at the end of December – the second time in the past six years.
Specifically, HMV (His Master’s Voice) said sales of DVD movies and TV shows declined 30% over the Christmas holiday period compared to the previous-year period.
“HMV has clearly not been insulated from the general malaise of the U.K. High Street,” chairman Paul McGowan said in a statement. “Even an exceptionally well-run and much-loved business such as HMV cannot withstand the tsunami of challenges facing U.K. retailers over the last 12 months on top of such a dramatic change in consumer behavior in the entertainment market.”
The 97-year-old retailer operates 125 stores and employs more than 2,000 people, accounted for 31% of all U.K. music CDs sales, in addition to 23% of all DVD/Blu-ray Disc sales in 2018.
“It is disappointing to see the market, particularly for DVD, deteriorate so rapidly in the last 12 months as consumers switch at an ever increasing pace to digital services,” McGowan said.
Indeed, the U.K. continues to see burgeoning growth in Netflix and Amazon Prime Video subscribers at the expense of pay-TV. Ofcom, the U.K.’s communications regulator, last summer reported that over-the-top video (15.4 million) for the first time surpassed pay-TV (15.1 million) in subscribers.
“The switch to digital has accelerated dramatically this year creating a void that we are no longer able to bridge,” McGowen said.