Interview: HMV: We've never sat comfortably with digital | Mobile Payments | Mobile Entertainment

Interview: HMV: We've never sat comfortably with digital

Interview: HMV: We've never sat comfortably with digital
Zen Terrelonge

by

Payments / Commerce / October 18th 2013 at 3:25PM

The music retailer's MD reveals to ME how that's about to change with the launch of its new mobile music stores and a 2014 roadmap that also spans vision and games.

UPDATE: Apple attacks HMV and demands new music download app leaves App Store

HMV has been a key part of the British retail space since 1921, but that looked to end at the start of this year when it entered administration.

For years, the company was famed for stocking music, films and games, but then attempted to fight against the threat of online sales and digital downloads by filling stores with audio equipment, mobiles and tablets.

It was argued that gadgets weren't what consumers went to HMV for, with phone shops providing the technology and expertise the public wants, and that the retailer had lost its way somewhat.

The company, of course, is a shareholder in digital music specialist 7digital – an ME Awards finalist – but HMV Digital managing director James Coughlan makes a rather frank admission to ME.

"The words HMV and digital have never really sat comfortably in the same mix, but I'm in the driving seat to ensure digital works. We have a big focus that gets the buy-in throughout the business, right the way down to the staff, the stores and back up the chain."

HMV plans to turn around digital with the launch of mobile music download stores for iOS, Android and HTML5, which is obvious acknowledgement that the company is making a play for the juicy mobile commerce market to give its revenues a jumpstart.

Coughlan has only been with HMV since August, but he is the man in charge of all things digital for the UK, Ireland and Canada, reporting in to Hilco – who bought HMV – and HMV CEO Paul McGowan.

He joins having served time at Vodafone for five years, where he led music downloads and product marketing.

"My focus has been to take everything back to basics without complicating things when bringing new media to market. The goal is to go back to what HMV stands for, promote the experience offered in store and to learn from what happened during the bad stage earlier this year.

"Ultimately, it's about creating a digital experience that enables customers to build a bridge between the retail experience and digital."

Coughlan is keen to highlight that the launch of the music apps are part of "phase one," insisting the new releases "aren't bells and whistles that start and end here, this is a baseline for us to build on and our 2014 roadmap looks very exciting."

It's clear that the company wants to get back to its musical roots, but the digital chief adds that "vision and games are coming." It's interesting that the company has focused on mobile as a priority, with Coughlan revealing the new desktop site will launch next week.

Just this week, data found the UK leads Europe for m-commerce and that one in ten Brits prefer shopping via their phones instead of shops.

He describes the new service as an "à la carte MP3 download store, which is created in conjunction with long-term partner 7digital."

Of course, Apple is incredibly precious about who gets to do what on iOS, and Coughlan adds the launch wasn't without long conversations with the iPhone maker who will have undoubtedly been concerned about a potential iTunes threat.

"HMV is a trusted voice and a trusted source, so everything digital in the future will use 'HMV Recommends' as a brand, which will allow us to concentrate on content curation rather than just leaving music scattered around for consumers to get lost in.

"It's about building the relationship from the ground up, and we're going to offer clear pricing, top albums, top tracks, bestsellers and more, whether they're from a small indie label or a large one.

"Excitingly, we're also bringing mobile pre-ordering to market, which is a big thing for us and the industry. iTunes is the only one to offer that natively, while Amazon's service is web-based, so we'll be the second to market with mobile.

"Up until now, nobody has been able to allow any MP3 downloads via a native app on Apple products unless they go through iTunes – we're bringing that to market as a first."

While HMV can push artists of its choosing to users, they can also search for content themselves, and beyond standard keyword search box, there are two notable innovations that allow them to do this – sound search and image search.

"It's very important that we can focus on educating customers about digital music services, and HMV image search and HMV sound search are the two features that will help us plug into our bricks-and-mortar side of the business."

Within the app, users can use image search when in stores and scan album covers, which will redirect them to a full list of tracks and 30-second previews with the option to buy the album. The feature can also be used on ads in papers, at bus stops and so on.

Sound search allows users to detect the music playing around them in true Shazam style, though 7digital partner SoundHound is powering the solution, acting as a new school listening station. As with image search, users will be encouraged to download music once it's detected.

"Digital ambassadors have been appointed in every region of the UK to act as a channel between my team, store staff and customers to ensure digital isn't too daunting for them," Coughlan said.

The cloud-based formula used in the app means that any songs downloaded from the HMV service will sync across all devices through My HMV, which is a spin-off of 7digital's existing locker solution.

Meanwhile, it seems as though sales will be the main moneymaker at present, with no plans to introduce any in-app advertising at present.

"It's not on my radar at the moment," responded Coughlan. "We want to create a destination for content consumption and not third-party messaging. You go to Spotify for example and you're flooded by ads about cars and all sorts. I understand why they do that, but that's not our business plan."

That said, subtle sponsorship opportunities could be on the horizon.

Coughlan noted that it's not all about albums and explained: "We're putting a big focus on singles and there will be a forthcoming partnership that shows our commitment to that market.

"Streaming is a great route to discovery, but if we do explore it then it certainly wouldn't be mirroring existing services. There is no one size fits all approach.

"We decided to launch in Q4, which is peak season, to weigh and measure performance to determine where we go with our vision and gaming plans for 2014. Times have changed and we're competing with startups.

"The team recognised digital is being led by mobile and there's been a massive shift in education and understanding over the past five years. We're now in the right place to bring in a mobile focus."

On the topic of 7digital's pricing sometimes sitting higher than iTunes and Amazon's, Coughlan explained it's not a competition.

"We're not in a pricing war. We will use 7digital pricing for the app, which will help our physical business in some instances. You'll have options where a physical disc may be £5.99 and a digital copy may be £7.99, in which case the shopper will elect to buy in store. As long as they buy from one channel then we don't mind which they use."

Coughlan finished off by saying: "We're certainly going to ruffle some feathers across the industry, but it's about putting a focus back on the physical high street, making people realise physical can sit in the same mix as digital. With phase one we're going to show how that works like only we can."