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Blockbuster, HMV, and the Death of the High Street

Last week, I heard someone say they were surprised by the news that Blockbuster had gone into administration – surprised, because they didn’t know Blockbuster was still going. Very tongue-in-cheek, but then what isn’t funny about the impending closure of a major high street retailer, the loss of thousands of jobs, and a further move to consolidate online retailing in the hands of a select few business megaliths?

I am very willing to admit, however, that Blockbuster did suck. There have been stories about them going into administration for over three years. It seems their business was set up for the subscription model from day one; they had the postal and email addresses of a database of people who rented movies regularly before most of us had even considered eCRM; the potential was there. They could have made a very successful and relatively painless transition to online distribution. Yes, it still would have moved away from physical stores (slowly), but it needn’t have gone out of business. Instead, they diversified by continuing to rent DVDs and Blu Rays, and selling off old second-hand stock at rock bottom prices.

Clever.

HMV is a tricky one for me, because while I rarely shopped there, I did enjoy their presence. I liked being able to go in and browse box sets of obscure TV shows. And where can you buy DVDs now? Supermarkets and megastores will carry the latest releases, but otherwise we’re looking at a pretty small market for specialist DVDs. I’ve heard people say, though, HMV’s online retail experience was terrible and their customer service sucked – most do in comparison to Amazon – and apparently this is enough to warrant them a damning to bankruptcy.

So maybe that’s what we’ll be left with: megastores and online marketplaces.

The most troubling thing for me, though, was a comment made by the guitarist from Mogwai: “With all of HMV’s high street rivals gone, they should have cleaned up. People just don’t want to pay for music alas.” The collapse is perhaps not indicative of fewer people shopping in physical chains, but of the lack of value perception endemic in the music industry.

The message here is not new: the high street isn’t immune to collapse, and businesses need to adapt in a digital age. Every time I hear another story of high street chains closing, I want to rush down to Waterstones and buy several hundred books in the hope I can prevent a similar thing happening in the book trade. As publishers, I know we’re all aware of the possibility of high street collapse of chains and independents, and that it’s something we’re actively trying to prevent where we can (with the majority of books still being bought in physical spaces, I would say it’s an intelligent thing to try to stop).

But as much as we can try to help as producers and suppliers, we can’t force people to shop there. If consumer behaviour is being permanently transformed, as I would argue it is, then we also need to be looking toward where they want to shop, and how these businesses who are so central to the reading culture will survive that transition by shifting their business model, as Blockbuster has not.

Some of the greatest innovations I have seen in recent years have involved publishers selling direct to consumers. These are generally by smaller, independent publishers – the Amber Books Military eBooks app is a fantastic model for how niches can gain a foothold in a difficult market. This isn’t just Amber books, I should mention; the app stocks titles from other independent military publishers as well in a collaborative effort.

This is something high street retailers have the power to do, as well: aggregate content online in a meaningful way, while protecting the perception of value in digital content. Again, the message and idea isn’t new. But it seems to be taking a few too many years of people saying ‘your site’s search doesn’t deliver me what I’m looking for’, and a few too many high street chain closures for us to get it.


Felice Howden

Felice Howden had opinions before she knew what the word 'opinion' meant. She wrote for the publishing and ideas blog Socratic Ignorance Is Bliss, and has had short stories published around the place. She graduated from the University of Melbourne in 2008 with a degree in English and Philosophy, and now spends her time typing code and hatching brain eggs for the future of publishing in a major publishing house.

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