HMV, the popular record store that was once a staple of the music industry, has announced it will close all stores in Canada by Apr. 30.
The music giant operates 102 stores across Canada and employs over 1,300 people, but has seen revenues decrease sharply in recent years as more customers switch to buying music online. Earnings for the company have declined from $266 million in 2012 to $193 million last year.
Everything is on sale at HMV's location at Square One in Mississauga as the store prepares to close by Apr. 30.
For customers, while the move comes as a shock, they recognize that the industry is changing. Amanda Stassi is one such customer taking advantage of last-minute deals at the store. "It definitely is the end of an era," she said. "I remember when hanging out at the record store was a favourite hobby, but now I haven't purchased an actual CD in years. It is simply easier to buy things online now."
The first HMV store opened in Canada in 1991.
The decline of a once prosperous company is indicative of larger trends within the music industry, which has seen the rise of digital content over physical sales.
Twenty years ago, sales of CD's in North America reached nearly 900 million copies. Since then, however, that number has declined to less than 300 million in 2013.
At the same time, the amount of music that consumers purchase online has moved in the opposite direction. Ten years ago online music sales accounted for only 360 million units sold. In 2013, however, that number had skyrocketed to over 1.6 billion. Instead of purchasing music at HMV, people are instead using online services like iTunes.
The rise in music purchased on the internet is reflected in the amount of money spent by consumers at record stores. At the start of the 21st century, over $13 billion was spent on physical record sales at stores like HMV. By 2013, however, that number had declined to just $2.5 billion. These trends in the music industry reveal just how difficult it has become for companies like HMV to survive in a marketplace that has become increasingly digital.
As stores like HMV continue to face the reality that the industry has changed dramatically and shut down, consumers will flock to digital providers. The sharp decline of this music industry leader is a symptom of a changing world in which online retailers are become the new normal for customers.
Source: Recording Industry Association of America. Retrieved from http://blog.thecurrent.org/wp-content/blogs.dir/9/files/2014/02/units-vs-dollars-riaa.jpg.