Blu Ray

HMV

His Master's Lost His Voice
Spotted in Soho in 2014

A few thoughts on the new difficulties faced by HMV. 

In part this is response to some utter nonsense I’ve read online, and some of the news reports surrounding HMV heading into administration for the second time in five years. 

There are undoubtedly structural problems with how music is sold in 2019, but I think there are multiple reasons for HMV’s failure – regardless of any mistakes or management decisions taken by their owners. 

I’ve tried to examine each of these in turn. 

Music Models 

We’re obviously moving away from a music ownership model to a rental model, although I’m still unconvinced that this is sustainable in the longer term.  

Firstly, it is not yet profitable for the businesses that are doing it. OK – that might not matter for Apple or Google who have vast income streams from other parts of the business that can prop them up, but it does matter for companies like Spotify and Tidal. Indeed, even Apple or Google will shut down a division that simply doesn’t make sense after a while.  

The lack of profitability might be a temporary thing, and perhaps the business models will improve over time. But let’s put it this way, I wouldn’t even begin to attempt to get into the streaming market right now. And will Apple or Amazon at some point stop even selling downloads? (Thank goodness for Bandcamp!) 

However, as I’ve argued previously, the current music rental model simply doesn’t work for a large proportion of the population.  

Consider my father. He buys or gets given one or two CDs a year. In all probability any discs he buys come from a supermarket – for him, the only easily accessible physical outlet for music now. He listens to those CDs a fair amount. But there’s no way on earth that he’s going to spend £120 a year on music. Nor are an awful lot of people. Certainly, Spotify has a free tier, but that’s ad-funded, and my father no more wants to hear ads interrupting his music than anyone else does. The alternative is that perhaps the majority of the population stop purchasing music altogether!  

The most recent RAJAR Midas survey suggest 24% of the population listen to on demand music services, while Ofcom’s Technology Tracker suggests it’s closer to 29%. Either way, that’s 70% of more of the population who don’t use such a service. 

So, we need some level of music ownership. That means an ability to buy music. 

Lazy Reporting 

One of the things that frustrated me was a report that used vox pops of various people standing outside the Oxford Street branch of HMV explaining how they hadn’t bought a CD in years and that they streamed everything now. 

Vox pops are, to my mind, nearly always useless. They are completely unrepresentative of the population, and more often than not, just colour a report to say what they the reporter hoped that they’d say. We never know how many vox pops were gathered and which ones made the cut. Think of it this way, if you stood in the street ahead of election day, asked two people how they were likely to vote, and got the same response: “I’m voting Green!” You wouldn’t then go on air and suggest that the Greens were going to win with a landslide (Unless you were in Brighton). 

Physical sales have undoubtedly fallen as streaming revenues have risen, but the IFPI Global music report 2018 still attributed 30% of recorded music revenues coming from physical sales (CD and, to a very small extent, vinyl) compared with 38% for streaming and 16% for digital.  

In the UK, we know that sales are falling. The BPI says that 2018 saw 32m CD sales down 9.6m year on year. But if 70% of the population don’t have an account with Spotify or its peers, then there still needs to be a way to allow listeners to buy The Greatest Showman soundtrack or George Ezra’s latest CD (the biggest two albums of the year). 

Physical music sales are still worth £2bn, and HMV accounts for 31% of all physical music and 23% of DVDs and Blu Rays. 

So, there are plenty of people still buying CDs. Indeed, I note that recent deluxe boxsets from both The Beatles and Kate Bush are only available in physical form. The streaming versions of both sets have significantly fewer tracks. That said, these are clearly aimed at collector/completists and the cynic might think that the labels are wringing as much cash as possible out of those now distinctly middle-aged fans. 

Most people aren’t streaming their music, and while they don’t buy as much as the keener music fans, these are consumers who still need to be reached – selling rather than renting them music. 

The Vinyl Fallacy 

Hitherto, the best place to buy music has been a record shop. Yes, there’s Tesco. And yes, there’s Amazon. The former has a very limited offering – and no, I don’t really care about the cool vinyl selection your big Sainsburys superstore has. That’s “cool” because it knows its customer. In the DVD aisle you’ll find boxsets of Airwolf and The Persuaders. All of these are because they’re serving a generation that got old, and buys these things for nostalgia reasons.  

The vinyl resurgence is all very well, but while the percentage increases might have been massive (the growth was much smaller in 2018), but they are still dwarfed by CD sales. Don’t just use revenues as your comparator, since vinyl invariably costs more than the equivalent shiny disc.  

A record shop in 2019 can’t really just exist by tapping a niche market like vinyl. Perhaps in a big city like London, but London has all kinds of shops that are unsustainable outside big cities. For example, there are shops where you can buy film processing gear. That doesn’t mean a largescale resurgence in film photography is likely. These places instead serve a diminished marketplace, but there are so few other outlets left that they mop up enough business to survive. 

Music is a mainstream art form, and it needs to survive in a manner that is accessible to all, regardless of their access to big cities. More and more, that probably does mean a combination of Amazon and supermarkets, with niche outlets filling a small hole. 

The Loss of Curation and Serendipity 

The real challenge for the true mainstream audience is music discovery. It’s all very well having a Spotify playlist, but for the “70%” who don’t use a streaming service, they’re probably relying on the radio (90% weekly reach recall), or perhaps mainstream TV shows like Graham Norton or The One Show.  

I’ve long argued that computer algorithms are still no match for a carefully curated shop display or the simple act of stumbling over something you didn’t even know you wanted. (A good radio station and/or presenter of course is massively valuable too.) 

One of the joys of a record shop, is the stumble-upon factor. You look at a shelf of new releases, or a thematic display somewhere, pulled together by someone who likes music. And in there, you find something that you didn’t know existed, or didn’t even know that you wanted.  

I’m not naïve.  I know that stores sometimes charged for those shelf-end displays or front of store racks, but either way, I can’t begin to think about how many times I just found something I didn’t know I’d come in for just by seeing it on a rack. 

Compare and contrast to every digital offering I’ve used, where the search box is the primary mechanism for digging into their warehouse. Yes, Amazon has more music than I can listen to in a lifetime, but they display it abysmally.  If I know what I’m looking for, I can [probably] find it. But nobody “browses” at Amazon.  

I recall spending many a lunch hour at the Oxford Street HMV browsing film soundtracks looking for obscurities and just seeing what they had. You’d find an Ennio Morricone compilation you didn’t know about or whatever.  

Over on Amazon, I can see what’s selling the most, but that’s about it. They probably have that exact same compilation, but unless I already know about it, I’m never going to find it.  

Maybe Spotify might lead me to it somehow. Maybe not. I find that most algorithmic playlists are far too constrained musically and don’t explore the wider breadth of what’s out there. You like this guitar-based rock-band? Here’s another guitar-based rock band.  

Browsing is one of nature’s delights, and it just doesn’t work on the virtual shelves.

The British High Street 

We all know that the UK high street is changing rapidly. In some parts of the country, they’re becoming ghost towns. When a larger store closes down, smaller stores follow, and shops get boarded up. 

On the other hand, store rents seem to sail inexorably upwards. The high price of rents is often quoted as a reason for store closures.  

It’s never entirely clear to me how this can be. There’s surely a dynamic market, and a landlord you would think would prefer something rather than nothing.  

But inevitably we hear that the real issue is that Britons are spending more money online and no longer shopping on the high street as they once did. Every year, the volume of shopping online creeps upwards, and big brands either fold altogether, get sold to Sports Direct owner Mike Ashley, or announce that they closing a number of branches.  

However, there are still some things that don’t quite add up. 

Over Christmas we heard that online powerhouse Asos had suffered from severe discounting across the market, which led to poorer than expected profits.  

And while online sales are indeed rising, reaching 21.5% of all retailing in November 2018, that still leaves an awful lot of sales that are not online.  

This suggests that even with a retailer whose majority of sales are in-store and not online, the growth of online can put the store part of the business into loss even though it still accounts for the majority of sales. Indeed, the volatility of some businesses to even small declines in sales would seem to back that up. Sometimes that’s because they’ve over-expanded and borrowed on the basis of sales that only head upwards. Or maybe it’s because the owners have grabbed a lot of money out the business… 

Anyway, this is just another reminder that next time a clothes brand on the high street shuts down, and you see a vox pop on the news with a contributor saying that, no, they don’t use the high street any more, and that they only shop online for clothes, in fact 78.2% of textile and clothing sales are not online. 

Conclusion 

There are no easy solutions to any of this. I truly hope that HMV continues in some form over the coming years. It’s just one of a narrow set of places that the more casual music consumer can actually buy music. I would hate to be limited to just what my local Sainsburys stocks.  

But we should also be wary of overly didactic reporting that suggests that “everyone” has moved to streaming. While the biggest music fans may well have done, the average consumer does not stream their music. The problem is that high street stores can’t rely on not getting their custom for 11 months of the year, before they pop in December to pick up an Ed Sheeran album. 

There seem to be more structural problems with the retail industry. Rents may be increasing, but many chains have over-expanded, and it would seem that even the smallest fall in sales can lead to dire consequences.  

Being a music snob doesn’t really help anybody. You may be lucky enough close enough to Rough Trade or whoever, and enjoy their brilliant curation. But most of the population doesn’t. London can support such shops. Small towns all over the country can’t.  

I’m not a muso although I do buy and listen to a reasonable amount of music. I have a streaming subscription, but I also buy CDs and mp3 downloads. The first record I ever bought was in HMV. I loved going there on Saturdays examining the singles chart in great detail, and later flicking through the albums. There was an independent music shop on the opposite side of the road that I also enjoyed. But the local department store also had a record section, as did WH Smith and Woolworths. All were part of my Saturday trawl.  

Later I would spend far too much money downstairs in HMV on Oxford Street, or upstairs in the DVD section.  

Just after Christmas I popped into an HMV in Norwich to pick up a Blu Ray of Leave No Trace a film I’d missed in the cinema but which has been popping up on loads of “Best of the Year” lists. I could have streamed it, but the quality of physical media is better, and the disc was actually cheaper than some streaming services. (It’s a fantastic film by the way, and fully deserves its plaudits). 

I will miss HMV if it is to finally leave high streets for good.

The Dark Ages of Film History?

I was recently talking to a some colleagues at work about one of my favourite films of all time, the classic Howard Hawks screwball comedy, Bringing Up Baby.

Made in 1938, it stars two of Hollywood’s biggest ever stars, Kathryn Hepburn and Cary Grant, both giving terrific performances in a classic of the genre.

How can we see this film I was asked by my colleagues? 

Both of them have Netflix and Amazon, and one has Now TV from Sky. Needless to say that Bringing Up Baby is on none of these platforms. It’s not available to buy in the UK iTunes Store, it’s not on the Google Play Store, and nor is it available to buy from Amazon’s streaming platform.

There is a DVD available on Amazon, but the price  has been fluctuating wildly. When I looked for it at the time of my conversation it was £26.89, and according to Camelcamelcamel has been retailing for as much as £30! It has now dropped back to £11.99.

That’s for a third party “Fufilled by Amazon” copy.

There are cheaper non-UK copies of the film on DVD, but they’re mostly NTSC, and are sometimes region-locked. That’s assuming that either of my colleagues still have a DVD player at all.

Bringing Up Baby is listed by the American Film Institute as one of the 100 Greatest Movies of All Time. But you essentially it’s incredibly hard to get a legal copy of it in the UK in 2018.

That hasn’t always been the case. That disc that’s being sold for nearly £27 was released by Universal Home Video in the UK in 2007, and for many years it sold for between £2 and £5. Judging from the chart at CamelCamelCamel, sometime around late 2014, the title went out of print at Universal and over time the dwindling remaining stock in circulation saw its price rise.

But in recent years, DVD sales have fallen off a cliff, and there are fewer and fewer retail outlets selling physical discs. Aside from Amazon, there are just HMV and Fopp left on the High Street – both with many fewer stores than in years gone by. Big releases still sell decent quantities via supermarkets. But with the exception of specialist mail order sites and labels, that’s about it. 

The answer should be that all these titles have moved to digital. And with the bigger budget blockbusters, that’s been the case. But significant chunks of the archive have not been uploaded.

They’ve not been leased to the streaming giants like Netflix or Amazon Prime, and nor have they been made available to buy from the Google Play Store or Apple iTunes Store.

It’s as though we’ve entered a “dark ages” period, where unless the title was made recently, it’s lost to us and is no longer available. It feels as though there are fewer titles available to watch than DVD and Blu Rays sales peak in 2007/8.

The chart above, based on data from a Netflix scraping website, shows you the number of films, by release year that Netflix UK offers subscribers. Obviously this data will change daily, but at the time of writing, of the 3,522 films with release dates (all bar one film), 73% were made 2010 onwards.

This second chart summarises this by decade. 

To be specific, there is one film from the 1920s on Netflix – Cecil B DeMille’s first version of The Ten Commandments. 

There are zero films from the 1930s, and the 17 films from the 1940s are nearly all war films, I believe mostly to accompany a 2017 three part WWII documentary from Steven Spielberg, Five Came Back. You won’t find any Oscar Best Picture winners from this period on Netflix.

There are fewer films from the 1950s than the 1940s – just 13. But they’re all minor titles with only Some Like It Hot and Touch of Evil being especially notable.

From there, things slowly improve, with more classics finding their way into the catalogue. But it’s a lean selection.

(I should again emphasise that I’m critiquing the UK selection. US reader may well have a deeper and better stocked catalogue.)

While as a Netflix subscriber, I can and will moan about the selection, they’ve never set themselves up as a classic movie service. And to an ever greater extent, they’re moving towards owning more of their own properties and relying less on renting catalogue material from studios. So I expect that the paltry fare currently offered will actually further diminish over time.

Now it’s true – there is the BFI Player. And while researching this piece, I came across FilmStruck which notably has access to the Criterion Collection (although the latter’s UK catalogue is vastly smaller than its US cousin). But today we learnt that Warner Media is shutting down FilmStruck. Whether on its own it was uneconomical, or whether this is more a move by TimeWarner ahead of it building a more singular streaming vision led by HBO; we don’t yet know.

Both the BFI Player and FilmStruck are/was rental offerings. And from the abrupt closure of FilmStruck, we can see the issue. A corporate change of direction and suddenly there’s no place in the market for classic films.

Also streaming services invariably don’t have the range or consistency of offerings. A film that there this month is gone next month. If I want to see The Maltese Falcon, I’m going to have search a lot of different services to see who has it available – if anyone.

Another operator who specialises in quality classic films, MUBI, goes out of its way to minimise choice to a rolling list of 30 films that sees one title added and one removed every day. Intelligent cinema, yes, but an incredibly limited choice. If I’ve got something in mind to see, these aren’t necessarily the places I’d go.

Films are less of an overall offering of the bigger free-to-air channels – BBC2 is more likely to be showing repeats of Bargain Hunt than an old black and white film. And while we have got the welcome addition of Talking Pictures TV, the quality of the prints they show can vary (Seriously! Get the Criterion Collection Blu Ray of His Girl Friday, or the Columbia Classics DVD. Don’t watch the “public domain” copy that Talking Pictures TV uses, or that can be found on Amazon), and they have a relatively low bit-rate for broadcasting which doesn’t help either.

Other channels tend to keep the same popular fare repeated on hard rotation. You’ll know when you hit ITV4 if you go channel surfing at 9pm.

The problem is that the retail model made sense for a lot of studios. Over the years, they dug deeper into their libraries and they released just about anything they thought they could sell. Costs were relatively contained, and even manufacture and storage costs were lowered as just-in-time manufacture of discs became more achievable. The Warner Archive Collection is a great example of this.

In theory, that should have followed through to the digital sales stores of iTunes, Amazon and Google. If you’ve gone to the ‘trouble’ of digitising a film you own the rights to, why wouldn’t you just upload copies to iTunes, Amazon, Google Play Movies and others? Set a price and watch those sales trickle in. 

Sure, nobody’s going to get rich overnight, but you’re working your assets, and fulfilling demand.

Yet for some reason, it doesn’t seem to have been worthwhile for studios to do any of this. It’s hard to understand. Unlike physical products, there’s no warehousing cost, or indeed physical manufacture of any sort. You take a digital asset, upload it to the sites and even if the film only earns a few dollars a year, that’s money that would be left on the table otherwise. But there are a vast range of films, including some relatively recent titles, that simply haven’t been uploaded to these services.

The trouble is that in the meantime, consumers have moved increasingly towards subscription models for all their entertainment. They rent their music, and they rent their TV and movies. And there isn’t necessarily room for all that many competing services. There is ‘subscription fatigue’ when you realise just how many things you’re subscribed to.

The real difference between the movie/TV model and music is that Spotify and Apple Music make all the music available (or nearly all, anyway). Now that just about all the biggest holdouts have given in, you don’t tend to see albums or artists drift in and out of the service the way movies do on Netflix. I know that I’ll be able to hear The Beatles on Spotify today, tomorrow and next year (probably).

What I don’t know is where I can watch Inception, or Star Wars, or Psycho, or Gone with the Wind, or Bringing Up Baby on any given day. Are they on Netflix or Amazon? Maybe. Maybe not.

For at least one of those films, I know it’s not on any of the services.

And that’s surely a problem. I shouldn’t have to wait until the BFI runs another screwball season to watch a film I want to see.

Dwindling Choices

A couple of weeks ago, Ofcom released its annual Communications Market Report. It’s always stuffed full of information about the UK media marketplace that can be fascinating to dissect.

In 2016, ownership of DVD players (including Blu Ray and games consoles with DVD functionality) was 67% of UK households. This year, it’s just 63% of households. That’s still most homes, but it’s indicative of the way that physical media is in decline as consumers move to streaming services.

Then yesterday, Amazon announced that it was closing Lovefilm. You may recall that Lovefilm was originally the UK’s version of Netflix in that it was a DVD rental by post business (Yes – that was Netflix’s original model too). Their basic service saw users renting films for a flat monthly fee and then posting them back when you’d watched them. In time, Lovefilm added a movie streaming service, so that by the time Amazon swooped in to buy them, it was the streaming service that Amazon was really interested in. That morphed into Amazon Prime Video, but the Lovefilm postal service remained.

And it still worked well, because unlike streaming services, customers had the ability to watch just about any film or TV series released on disc. That included classic films, genre titles and world film titles that never make it onto major streaming services.

And there’s the rub.

We have ownership of machines to play discs falling, and yet digital is not a direct replacement.

It’s all very well have a Netflix or Amazon Prime Video account, but those do not represent a full range of choice. In a Guardian piece bemoaning the death of Lovefilm, the author likened the film selection on the streaming services to the DVD selection in a petrol station. A handful of decent titles – all of which you’ve seen – and a load of trash you’d never want to watch.

That’s a little harsh, but it’s not far from the truth. Yes, the catalogues are slowly improving, but the reality is that on any given day, it’s hard for anyone to actually know what films are available on what services.

Distributors package up groups of films – some are good, some less so – and licence them to the online streamers for certain periods. That period might be measured in months, or it might be measured in years. By and large, the same film is unlikely to be streaming on both Amazon Prime Video and Netflix at the same time. So which do you buy? Both?

The reality is that the all-you-can-eat streaming services offer a fairly meagre range considering the vast breadth and wealth of cinema history. There are a few choice morsels alongside a lot of filler.

Furthermore, you can’t be certain on any given day, that a service you subscribe to will have the film you want to watch available to you.

Ah, but that’s OK. I can get everything else I want to watch from iTunes, Amazon Video (the rent-per-film part) or Google Play Video!

Well, up to a point Lord Copper.

If the film was pretty popular and released in the last twenty years or so, then yes, for around £4.49 for a rental, you probably can stream a copy, with luck in HD. But I think you’ll find there’s an awful lot missing.

Older films, classic films, mid-list films, genre films, TV series and many more.

Question for Film Distributors

If you’re a bit of a film fan like me, then from time to time you suddenly have the urge to watch a film. Assuming you don’t have your own Blu Ray or DVD copy to hand you head to the streaming services and search for it. Only to find it’s not there.

Why in 2017, is not a distributor’s entire catalogue online?

It seems to me that if you own the rights to a film, then you’re deliberately leaving money on the table if you do not at least make it available to purchase digitally in places like the iTunes and Google Play Video stores.

I’m not talking about things you’re holding back to repackage in various ways for maximum revenue – Disney, I’m looking at you!

I’m talking about average films, that if I wait long enough will pop-up once every couple of months on FilmFour or BBC2 anyway. I’m talking about solid mid-range titles, that once upon a time, I could happily find in physical format in a largish branch of HMV or the Virgin Megastore.

Here are a handful of films that I have genuinely wanted to stream but not been able to find on streaming services when I looked, all from within the last thirty years, and all currently or previously released on physical media.

  • Truly, Madly, Deeply
  • The Grifters
  • Rambling Rose
  • Enchanted April

If I started searching for older films then the list would get much longer much more quickly.

What I really don’t understand is that the costs of making catalogue movies available on these services is surely basically nil. You don’t even have to worry whether HMV will give up shelf space to a title, or Amazon warehouse space. You just list the film and let the money run in (or at least trickle in).

In 2017, if you’re a bit of a movie buff, then while the streaming services might sate your appetite a little, you’re not getting the full picture.

What you can’t do is draw an analogy with music. Spotify has a catalogue of ~30m tracks, so perhaps you could ditch your physical music collection and rely solely on their service (I wouldn’t personally, but many do). The same simply isn’t true for films, and we don’t seem to be close to that point.

Indeed if you don’t own a DVD or Blu Ray player, you’re limiting yourself enormously. And that’s before getting into the lack of extras that most streaming or download services offer.

As a consequence of all this, my physical film collection continues to grow.