HMV is calling in administrators.
It's no secret that the store has been in trouble for some time. And it's made mistakes, but I don't buy the argument for a moment that its failure is all down to bad management. Nor to the internet: it still has 38% of the physical music market in the UK, and that's big. I think a lot is down to bad tax policy.
It refused to go to the Channel Islands at first: not wanting to take pat in blatant tax abuse. In the end it had to go: the tax abuse had become rampant. Tryin g to do the right thing cost it.
And on line - untaxed and so subsidised - hit it hard.
Business cannot compete on an unlevel playing field. Tax can and does unlevel playing fields. The abusers win. We all lose. We're seeing the price time and again.
I hope HMV survives.
I hope much more that the lessons for government on the impact of tax abuse are learned, very quickly.
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While this may fit your narrative, the decline of HMV is nothing to do with tax. I remember buying new CDs for £12-13 in 1990. Now the big sellers are discounted by supermarkets and are sold at £8 from launch: 20 years ago no such competition existed. You name one other retailer that could absorb a decline in actual prices of 30-40% over 20 years.
They couldn’t make profits from the best sellers because of competition and they couldn’t stock obscure stuff because their shops would never be as big as an online store. Hence there was no improvement in their trading once LVCR was stopped: the sad truth is that there is no space for a high street chain focussed on physical CDs and DVDs. For those of us who are not interested in clothes or coffee the high street is looking like a desert.
That’s the channel islands view
Not the real one
its quite obvious tesco et al were using CD’s and books as loss leaders to get people into their shops. Downloads also killed a large part of their market. I cant see tax playing much of a part in either of these factors.
I can never see anything obvious in your comments
Of course tax played some part of this, because this is what you blog about. But it was only part of the whole problem, as many people have pointed out. If you took your blinkers off for a minute you might gain a little more respect, certainly from me. Your pithy comments don’t really do you any favours.
You’re welcome to say so
It is clear not everyone agrees
For interest: I’m sure you’ve already seen this, but just in case not New Statesman have written an interesting counter-argument to this article.
Here’s the link.
Balanced!
[…] FOPP chain which it’s owned from 2007 with it. It seems part of HMV’s problems was that competitors were more effective in avoiding tax. Not mentioned in mainstream broadcasts. Part of our problems might be that those HMV workers might […]