Mistake
I think HMV, like Sam's before it; and the music industry as a whole, have made one mistake after the other.
They just haven't thought about how to adapt to new technologies and a changing marketplace.
Its Sad. I miss Sam's; and I miss what HMV was when it was a cool place to browse music.
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Obviously there are 2 serious pressures on music retail; via the internet; one is convenience (d/l from home) and the other is price (free is cheaper).
While undoubtedly, the above would have put a dent in the legal retail trade no matter what; it didn't need to be this severe.
Aside from cutting back on price gouging (CDs in Canada are still typically $2-3 above U.S. prices......)
I know what I would pay for, and go to a store to buy.
1) I want selection, while the online selection is very large, at any given time you may have trouble finding what you want for free. First winning proposition, HMV should carry EVERY song every published. Obviously not all would be on CD, but you do that through a website and an instore database which you can burn to CD.
2) They should have added a burn your own CD service ages ago; one where you can pay track by track till you fill the space. If they matched the online pricing ...with (if your bring your own CD), $.99c per track, 10% off on 10 or more tracks, they're business would spike overnight. If you don't bring a CD you buy it for $2.00 (blank). You could also print your album cover art, have a choice of images for either custom CDs or a band's album. The price could vary for the the image/art used.
3) Then they need staff who have a passion for and a knowledge of music. I want staff you have in their head what Last.fm does with algorithms. If you like ' X '; you'll love 'Y'. Further if I can hum a tune, they should be able to name it, tell me the artist, the album, the year and where to find it!
If you do the above you have a value proposition that's worth paying for; one that when factored with faster than downloading and virus-free guaranteed tunes, equals a healthy business.
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Sadly HMV instead decided on selling DVD's, reducing selection, dumping independents, no burning your own CDs, cutting staff who they have to pay more cause they know something; and leaving excessive prices in place.
Lousy management makes for a failing business.
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