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Background on HMV UK

Background on HMV UK. First store 1921 Leading entertainment retailer in UK – 25% market share in audio and DVD 215 stores in UK & Ireland rising to 230 by Xmas 2004 Sales of £930m and Operating profit of £95m Core values of range, advice, service and value

austin-wilson
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Background on HMV UK

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  1. Background on HMV UK • First store 1921 • Leading entertainment retailer in UK – 25% market share in audio and DVD • 215 stores in UK & Ireland rising to 230 by Xmas • 2004 Sales of £930m and Operating profit of £95m • Core values of range, advice, service and value • Very strong retail platform, operational excellence and consumer brand for entertainment retailing Challenge to replicate in Digital

  2. How does HMV compete? Using our stores and educated staff, with a strong technical base and great range. Brand Store integration Brand Leverage In-store advertising In-store portable hardware offer In-store advice

  3. Store Integration Exclusive Content User friendly service Competitive Price Brand SERVICE SUCCESS FACTORS Critical Success Factors Customer Service back up Service Reliability Full Range SERVICE MUST HAVE’S

  4. Strategic Decision • Seek to develop a la carte and subscription download store • Develop Jukebox digital retail platform (Napster / itunes) • Seek technical partners (as skill set non core to HMV) • In-store MP3/WMA portable player offer with educational element • Longer term in store downloading and service integrated with HMV.co.uk (web based app), mobile play

  5. HMV Digital – Simple and Friendly Digital Permanent Downloads Subscription Service Jukebox Online Radio CUSTOMERS In-Store Jukebox Discs Digital Zone Portable Hardware Hardware Accessories

  6. Following 6 month due diligence process selected Microsoft and MusicNet to be our partners Microsoft: front end – build the jukebox MusicNet – digital warehouse – act as storage and delivery company for digital catalogue 9 month project to launch digital store on 5th September Implementation

  7. Consumer PC Latest released generation for best entertainment experience Windows XP Service Pack 2 Windows Media Player 10 ‘Janus’ plays for sure devices Client Application Windows Forms 1.1 Looking forwards, upgrade the framework, WPF, WMP11 Service Infrastructure Windows 2003 Server platform ASP.net 2.0 web site / web services SQL Server 2005 ISA Server 2005 MOM 2005 Integrates with existing WebSphere / DB2 applications via web services HMV Digital Platform

  8. Commercial terms with record companies – focus on Indies Catalogue acquisition and range check In store execution – new unitary, device manufacturers and education for consumers Marketing campaign PR and launch campaign Live / Launch Tasks

  9. PERMANENT DOWNLOADS SUBSCRIPTION HMV Digital Store Differentiation on pricing and product

  10. PERMANENT DOWNLOADS HMV Digital differentiators sell digital albums AS albums multiple retail price points Indie content new to digital

  11. HMV Live record performances and sell on HMV Digital

  12. In-store Launch

  13. In-store Launch

  14. OXFORD CIRCUS

  15. Results? • Very successful launch with amazing PR • In the market with a stable jukebox developed in only 9 months • Good platform to develop functionality and distribution channels • Developed internal knowledge base of MS technology and integrate with existing systems

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