Things seem to just be getting worse for retailers as difficulties mount. In turn after unfortunate turn, the stories seem to end up with retailers shutting down. And this is especially true with retailers that sell DVDs, Blu-ray discs or CDs. Unfortunately, the broader entertainment industry is not doing much to help out. In fact, the finger of blame for much of the closing of these very important channels for entertainment companies can be pointed directly at…the content owners themselves.
Entertainment Retail is nearly dead and is gasping for air
In today’s news, Nipper, the loyal old dog that used to listen to His Late Master’s Voice, seems to have turned on all of his owners and has lived up to his name by biting one of the last surviving entertainment retailers in the UK. You see, HMV – the retailer with the logo of the cute little terrier listening to the gramophone, is pretty much a goner. The share price hit its lowest level ever during trading today and closed at 10.25 pence. Recently, in a not-so-amusing gaff, an important Englishman named George Osborne (he’s the Chancellor of the Exchequer) basically stated that HMV is just about dead.
After three profits warnings in the past four months and continually trying to sell different chunks of the business, the future does not look so good. They continue to fight for their life, but let’s just say that HMV is not a particularly appealing stock.
On our side of the pond, Best Buy in a recent press release talked about some not-so-good Q4 results. No, Best Buy is not going out of business, but their entertainment category might. In Q4, entertainment declined by low double digits. And their recent erratic behavior (buying the CinemaNow name to try to win its own Best Buy digital customers while recently doing a deal with Roku that hands customers directly to Roku and its content partners), indicates that they have no idea what to do.
Now try this: Think back to ten years ago. What retail stores did you go to in oder to buy your music? Name three stores. OK now think of today. What retail stores do you go to in order to buy music from your heyday? Not so easy to think of, right?
You get the evidence
So what is going on here? Sure, there’s the lame excuse about the economy, the proliferation of entertainment options, the shift to other ways of consuming. But, there is something else going on. I believe the content owners have been playing games that have led to the destruction of entertainment retail. As if on cue, Kevin Tsujihara of Warner Brothers Home Entertainment today announced a “Mega-App” that basically cuts retailers right out of the picture so Warner can go direct to customers.
How’s that for kicking a dog while it’s down!