Impact of changing consumer tastes

Magazine, newspaper and book publishers are facing major changes to retail channels they once counted on as media and entertainment retailers all over the developed world continue to disappear.

UK music retailer HMV went into administration this month and even if a rescue deal is brokered it will emerge with fewer outlets.  Dish network is closing 300 US Blockbuster video rental stores and the brand’s UK arm is in administration. In the US book chain Barnes and Noble announced this week it could close 30% of its stores in the next ten years. 

Retail upheaval is nothing new and in the last 20 years’ vinyl stores and independent booksellers have given way to chains such as Tower Records and Borders, which were then beaten by supermarket chains selling cut price boks and CDs.  It is also a period in which traditional outlets have had to compete with online retailer which launched just 17 years ago.

Online stores do not yet help customers to browse freely as they did on the high street, but they pose bigger risks to media owners.  Control of distribution was central to their power and profits.  Now power is starting to shift to digital outlets with the scale to squeeze the margins.

Blockbuster and HMV are reminders that consumers’ media habits change fast and media companies have rarely kept up with the pace.

Publishers and record labels knew little about the person casually picking up a magazine at a news-stand or event the most ardent music fan leafing through racks of vinyl.  Digital retailers do not share all their data but they offer one advantage over what went before – the ability to understand customers in far more detail.

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