HMV’s next digital idea: click-to-collect plastic music

HMV will introduce in-store pick-up for online purchases, as it tries to hold on to a plastic music market it forecasts will shrink by a fifth this year.

“The directors expect this trend to continue over the next three years as both physical music sold by internet mail order and digital downloads continue to take market share,” the UK music and entertainment retailer said, as it announced 19.7 percent lower annual sales and a £16.2 million ($25 million) loss on Thursday.

HMV has operated its own HMVDigital download store, powered by 7digital, since it bought half of the retailer and white label provider in 2009. But it has never presented any figures showing any success. 7digital lost HMV £700,000 last year, though is set to hang on to the well-thought-of operator, whose importance to HMV must actually grow as physical diminishes.

The company now plans: “Developing HMV’s online and multichannel offerings, particularly in light of the removal of LVCR (low value consignment relief), which will assist HMV to compete on a level playing field with pure internet competitors, and to offer improved services such as click-and-collect in stores.”

The UK’s LVCR had allowed tax-tree imports of CDs from Channel Islands-registered startups, but was abolished this April.

But both online sales and of and in-store pick-up for music CDs are two variants of an overall market HMV knows is shrinking to vanishing point.

Mostly, HMV wants to continue its recent strategy under which selling entertainment devices like tablets and smartphones – themselves bundled with music – becomes more lucrative than selling music itself.

Music and movie studios rescued the struggling retailer in January when they agreed to take equity in HMV rather than call in its unpaid fees for their disc shipments.