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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

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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

  • Very strong retail platform, operational excellence and consumer brand for entertainment retailing

Challenge to replicate in Digital


How does hmv compete
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


Critical success factors

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


Strategic decision
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


Hmv digital simple and friendly
HMV Digital – Simple and Friendly

Digital

Permanent

Downloads

Subscription

Service

Jukebox

Online

Radio

CUSTOMERS

In-Store

Jukebox

Discs

Digital

Zone

Portable

Hardware

Hardware

Accessories


Implementation

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


Hmv digital platform

Consumer PC and MusicNet to be our partners

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


Live launch tasks

Commercial terms with record companies – focus on Indies and MusicNet to be our partners

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


Hmv digital store

PERMANENT DOWNLOADS and MusicNet to be our partners

SUBSCRIPTION

HMV Digital Store

Differentiation on pricing and product


Hmv digital differentiators

PERMANENT DOWNLOADS and MusicNet to be our partners

HMV Digital differentiators

sell digital albums AS albums

multiple retail price points

Indie content new to digital


Hmv live
HMV Live and MusicNet to be our partners

record performances and sell on HMV Digital


In-store Launch and MusicNet to be our partners


In-store Launch and MusicNet to be our partners


OXFORD CIRCUS and MusicNet to be our partners


Results
Results? and MusicNet to be our partners

  • 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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