Wednesday, March 13, 2013

Asda / HMV Is It Wise.Com?

Today we read that Asda, the UK arm of Walmart, is ‘considering’ a bid for UK entertainment retail casualty HMV. Administrators Deloitte have already almost halved the number of HMV stores leaving it with some 116 outlets and the deal may be attractive given Walmart’s own position in the same market in the US.

It is an interesting rumour given that their two biggest UK supermarket rivals have clearly pinned their money on going after the growing online media marketplace. It also comes on the back of the news that Argos is reintroducing CDs and DVDs into selective stores. The CD and DVD is clearly becoming transient technology and not one to invest in today unless you see a quick buck in ‘stacking them high and selling them cheap.’

Last year Sainsbury acquired the flagging Anobii ebook service, rebranded it and now are pushing it hard to their customer-base .  It may not give them a comprehensive online media offer but it starts to plug the gap.

Tesco,  now the third largest retailer in the world, have made their online intent clear by hiring Gavin Sathianathan, Facebook’s EMEA head of retail for Europe and Mark Bennett, a former EMI and Warner Music executive who headed up Sainsbury’s digital entertainment unit. In 2011, Tesco bought an 80% stake in the Blinkbox which gave them a competitive position against LoveFilm and Netflix and it also acquired music streamer, We7 and ebook retailer, Mobcast. It now has added Blinkboxbooks and Blinkboxmusic sites and is planning to target market its millions of customers about the services. Tesco are also about to launch a Clubcard TV channel, which will be available to Tesco’s ClubCard loyalty scheme members, free of charge, and will offer a mix of archive films and television shows. An interesting move after Argos had announced it was to close its own TV station. However, with some £64bn turnover and £3.9bn operating profit, Tesco has the money to compete in the media marketplace and is not about to simply roll over.

Both supermarkets have avoided the device wars and have stuck to being online and device agnostic. A wise move.

So what about Asda? Do they need the HMV store footprint in an online marketplace? They could flip the stores into smaller media outlets, but does that really make a difference?

When virtually every laptop, ultrabook, notebook and tablet today does not have a CD drive and even the car manufacturers are starting to fully embrace online,  is buying a store range that never understood this, is it

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