Music Retail
HMV
HMV was Britain's dominant music and entertainment retailer for most of a century, the famous record shop on nearly every high street. It moved to digital far too late, ceding CDs to Amazon and downloads to iTunes and then streaming to Spotify. It collapsed into administration in 2013, was rescued and cut down, collapsed again in 2018, and survives only as a fraction of its former self.
- Company
- HMV
- Started
- 1921
- Ended
- 2019
- Stores and jobs at its 2013 collapse, before shrinking to a niche
- ~240 stores
- Collapse speed
- Gradual
- Preventability
- Medium
- Lesson transfer
- Industry-wide
- Last reviewed
- 2026-07-24
Narrative
The story
The ambition
For most of the twentieth century, HMV was how Britain bought music. Founded in 1921, its stores and its His Master's Voice dog-and-gramophone logo were a fixture of nearly every high street, and for decades it was the country's dominant seller of records, then CDs, then DVDs, a cultural institution as much as a shop. At its height it ran around 240 stores across the UK and Ireland and defined how a nation discovered and owned music.
The rise
That dominance was real and long-lived. HMV was where new releases launched, where people browsed on a Saturday afternoon, and where the music industry expected its physical sales to happen. The brand carried enormous recognition and a store on seemingly every shopping street.
The cracks
The internet took HMV's business in stages, and HMV was always a step behind. First Amazon undercut its CD and DVD prices online while HMV under-invested in its own e-commerce. Then Apple's iTunes moved music buying to downloads, and by 2012, for the first time, digital stores sold more albums than any physical retailer. HMV's attempts to respond, a 2011 refit toward selling headphones and gadgets, selling off Waterstones and its live-music arm, all came late and small. It was left with the fatal combination analysts described: a place people browsed but bought elsewhere, and the crushing overhead of hundreds of stores that a shrinking niche of physical-media buyers could no longer support. By Christmas 2012 it was in breach of its bank loans.
The collapse
In January 2013 HMV, after 91 years, went into administration under Deloitte, with about 240 stores and roughly 4,000 to 4,350 jobs at risk. The restructuring firm Hilco bought it, closed unprofitable stores, and cut the rest down hard. But the disease had not been cured, only slowed: streaming from Spotify, Amazon, and Netflix accelerated the collapse of physical media, and in December 2018 HMV, by then Britain's last surviving national music retailer with about 125 stores and 2,200 staff, went into administration a second time in six years. Even holding roughly 31% of UK physical music sales, it could not make the economics work in a market shrinking further every year.
The aftermath
This time the rescue was smaller and stranger. In early 2019 the Canadian record-store entrepreneur Doug Putman, a self-described vinyl nut, bought HMV out of administration through his Sunrise Records, reopening a portion of the closed stores and even opening a large flagship in Birmingham built around experience, live stages, and the vinyl revival. HMV survives, but as a fraction of what it was, a niche destination for physical-media enthusiasts rather than the dominant retailer of a nation's music.
The lessons
Dominance in a format is worthless once the format dies, and moving late is almost as bad as not moving. HMV owned physical music retail and squandered the lead, letting Amazon take CDs, iTunes take downloads, and streaming take everything, while it clung to a vast store estate whose overhead a shrinking niche could not fund. Being the place people browse is not a business if they buy elsewhere. A retailer whose product is going digital must cannibalize itself early and shrink deliberately; wait too long, and the same footprint that once meant dominance becomes the weight that pulls it under, again and again.
Causal timeline
Failure Anatomy
- 1921
A nation's record shop
Founded in 1921, HMV became Britain's dominant music and entertainment retailer, with around 240 stores at its height and the famous His Master's Voice brand on nearly every high street. [2]
- 2012
Late to digital
HMV under-invested in e-commerce as Amazon undercut its CDs and DVDs and iTunes moved music to downloads; by 2012 digital stores sold more albums than any physical retailer, and its late responses (a 2011 gadget refit, selling Waterstones and its live arm) came too small. [1]
Failure to adaptStronger competitor - 2013-01-15
First administration
By Christmas 2012 HMV was in breach of its bank loans, and in January 2013, after 91 years, it went into administration under Deloitte with about 240 stores and roughly 4,000 to 4,350 jobs at risk; Hilco bought and cut it down. [3]
Unsustainable economics - 2018-12
Second administration
As streaming accelerated the collapse of physical media, HMV, by then Britain's last national music retailer with about 125 stores and 2,200 staff, went into administration again in December 2018, still holding about 31% of UK physical music sales. [4] [5]
Unsustainable economicsStronger competitor - 2019
A smaller survival
In early 2019 Canadian entrepreneur Doug Putman bought HMV out of administration via Sunrise Records, reopening some stores and opening a large Birmingham flagship around experience and the vinyl revival, leaving HMV a fraction of its former self. [6]
Structured analysis
What Went Wrong
Root causes
Too slow to digital and online. HMV under-invested in e-commerce and moved late to digital, ceding CDs to Amazon and downloads to iTunes, then streaming to Spotify, as physical music sales collapsed. [1] [4]
Store overhead a niche couldn't fund. HMV kept the crushing overhead of hundreds of stores as physical-media buyers dwindled to a niche, a place people browsed but bought elsewhere. [2]
Contributing factors
Amazon, iTunes, streaming. HMV was outcompeted in sequence by Amazon on price, Apple's iTunes on downloads, and Spotify, Amazon, and Netflix on streaming. [1] [4]
Immediate trigger
Two administrations. With physical sales collapsing and its bank loans breached, HMV went into administration in January 2013, and again in December 2018 after a Hilco restructuring failed to fix the model. [3] [5]
Visible symptoms
Browsed but not bought. By its 2013 collapse, HMV had become a store where people browsed and then bought online, unable to convert footfall into sales. [2]
Warning signs
Digital overtakes physical. In 2012, for the first time, digital music stores sold more albums than any physical retailer, a clear signal HMV's core market was disappearing. [1]
Affected groups
Evidence
Claims & sources
Every numbered marker in the analysis links to the claim it rests on, and each claim to its sources.
- [1]
HMV under-invested in e-commerce and moved to digital far too late, ceding CDs and DVDs to Amazon on price and music to Apple's iTunes downloads; by 2012, for the first time, digital stores sold more albums than any physical retailer.
- [2]
HMV, at its height around 240 stores, became a place people browsed but bought elsewhere, and the overhead of hundreds of stores could not be sustained as physical-media buyers dwindled to a niche.
Moderate Reported explanation Why Focusing On Digital Sales Won't Save HMV Amazon-bashed HMV calls in administrators, seeks buyer - [3]
By Christmas 2012 HMV was in breach of its bank loans, and in January 2013, after 91 years, it went into administration under Deloitte with about 240 stores and roughly 4,000 to 4,350 jobs at risk; Hilco then bought and cut it down.
- [4]
Streaming from Spotify, Amazon, and Netflix accelerated the collapse of physical media, and HMV, by then Britain's last national music retailer with about 125 stores and 2,200 staff and about 31% of UK physical music sales, went into administration a second time in December 2018.
- [5]
HMV entered administration a second time in six years in December 2018, unable to make the economics work even as the last surviving national music retailer in a shrinking physical market.
- [6]
In early 2019 Canadian entrepreneur Doug Putman bought HMV out of administration through his Sunrise Records, reopening a portion of the closed stores and opening a large Birmingham flagship around experience and the vinyl revival, leaving HMV a fraction of its former self.
Sources
HMV goes bankrupt after 91 years in the disc-selling business
Engadget · 2013-01-15
Amazon-bashed HMV calls in administrators, seeks buyer
The Register · 2013-01-15
Why Focusing On Digital Sales Won't Save HMV
Forbes · 2013-01-16
HMV Bucks The Trend With The Opening Of Europe's Largest Record Store
Forbes · 2019-10-14