British music retailer HMV, which was launched by English composer Edward Elgar in 1921 and helped propel the Beatles to fame, collapsed into administration on Friday as consumers switch to digital streaming in droves.
His Master’s Voice (HMV), which is known worldwide for its iconic logo showing a dog listening to a record player, is the last major music retailer in Britain and has been suffering for years from the decline in physical sales of CDs and DVDs. Hilco Capital, a restructuring company which rescued HMV when it previously entered administration in 2013, said that the board of HMV had decided to appoint administrators but its 125 stores in Britain would continue trading for the moment.
The company employs around 2,200 people.
“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 service,” said Paul McGowan, executive chairman of HMV and Hilco.
“During the key Christmas trading period the market for DVD fell by over 30% compared to the previous year,” he said, adding that this decline was “unsustainable”.
Digital downloads overtook physical music sales in Britain for the first time in 2012 and since then platforms for music and film such as Spotify, iTunes, Netflix and Amazon Prime have grown further, undermining retailers. “The switch to digital has accelerated dramatically this year, creating a void that we are no longer able to bridge,” Mr. McGowan said, adding that the physical music market in Britain is forecast to fall by around 17% next year.
