HMV
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- For the novel by Stanisław Lem, see His Master's Voice (novel).
| HMV Group plc | |
 |
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| Type | Public (LSE: HMV) |
|---|---|
| Founded | London (1921) |
| Headquarters | Maidenhead |
| Key people | Carl Symon, Non-Executive Chairman Simon Fox, CEO |
| Industry | Retail Record store[1] |
| Products | Recorded music, videos, DVDs, books, computer games |
| Revenue |  £1.825.9 billion (2005) |
| Net income | £102.2 million (2005) |
| Employees | 11,200 full time (2006) |
| Website | www.hmvgroup.com |
His Master's Voice, usually abbreviated to HMV, is a famous trademark in the music business, and for many years was the name of a large record label. The name was coined in 1899 as the title of a painting of the dog Nipper listening to a wind-up gramophone. In the original painting, the dog was listening to a phonograph.
Their retail stores are currently the #1 high street music retailer in the UK (excluding supermarkets), but has competition across the UK with Virgin Megastores and more recently Internet retailers of physical product.
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[edit] The origin of the trademark image
The famous trademark image comes from a painting by English artist Francis Barraud, A.R.A. and titled His Master's Voice. It was acquired from the artist in 1899 by the newly-formed Gramophone Company. According to contemporary Gramophone Company publicity material, the dog, a fox terrier called Nipper, had originally belonged to Barraud's brother Mark. When Mark Barraud died, Francis inherited Nipper, along with a cylinder phonograph and a number of recordings of Mark's voice. Francis noted the peculiar interest that the dog took in the recorded voice of his late master emanating from the trumpet, and conceived the idea of committing the scene to canvas.
In early 1899, Francis Barraud applied for copyright of the original painting using the descriptive working title Dog looking at and listening to a Phonagraph. He was unable to sell the work to any cylinder phonograph company, but The Gramophone Company purchased it later that year, under the condition that Barraud modify it to show one of their disc machines. The image was first used on the company's publicity material in 1900, and additional copies were subsequently commissioned from the artist for various corporate purposes. [2]
Later, at the request of the gramophone's inventor Emile Berliner, the American rights to the picture became owned by the Victor Talking Machine Company. Victor used the image more aggressively than its UK partner, and from 1902 on all Victor records had a simplified drawing of the dog and gramophone from Barraud's painting on their label. Magazine advertisements urged record buyers to "Look for the dog".
It is interesting to note that the painting is of Nipper listening to Mark's voice, something which was possible with the Ediphone of the original, which could record as well as play. In the later version of the painting, with a Gramophone in place of the Ediphone, Nipper could not have been listening to his masters voice since his owner was not a recording artist with released gramophone discs.
[edit] The Gramophone Company becomes "His Master's Voice"
In Commonwealth countries, the Gramaphone Company did not use this design on its record labels until 1909. The following year the Gramophone Company replaced the Recording Angel trademark in the upper half of the record labels by the famous picture painted by Frances Barraud, commonly referred to as Nipper or The Dog.
The company was never formally called "HMV" or His Master's Voice, but was identified by that term because of its use of the trademark. Records issued by the Company before February 1908 were generally referred to as "G&Ts", while those after that date are usually called "HMV" records.
This image continued to be used as a trademark by Victor in the USA, Canada and Latin America, and then by Victor's successor RCA. In Commonwealth countries (except Canada) it was used by subsidiaries of the Gramophone Company, which ultimately became part of EMI.
The trademark's ownership is divided between different companies in different countries, reducing its value in the globalised music market. The name HMV is used by a chain of music shops, mainly in the UK, Ireland, Canada, Australia, and Japan.
In 1921 the Gramophone Company opened the first HMV shop in London. In 1929 RCA bought Victor, and with it a major shareholding in the Gramophone Company which Victor had owned since 1920.
In 1931 RCA was instrumental in the creation of EMI, which continued to own the "His Master's Voice" name and image in the UK. In 1935 RCA sold its stake in EMI but continued to own Victor and the American rights to His Master's Voice.
World War II fragmented the ownership of the name still further, as RCA Victor's Japanese subsidiary The Victor Company of Japan (JVC) became independent, and today they still use the "Victor" brand and Nipper in Japan only1. Nipper continued to appear on RCA Victor records in America while EMI owned the His Master's Voice label in the UK until the 1980s, and the HMV shops until 1998.
The globalised market for CDs pushed EMI into abandoning the HMV label in favour of "EMI Classics", a name they could use worldwide; however, it was revived in the 1990s for Morrissey recordings. The HMV trademark is now owned by the retail chain in the UK. The formal trade mark transfer from EMI took place in 2003.[1]
Meanwhile, RCA went into a financial decline. The dog and gramophone image, along with the RCA name, is now licensed by RCA Records and RCA Victor owner Sony BMG Music Entertainment from Thomson SA. Thomson owns of the RCA trademarks in the Americas, which operates RCA's consumer electronics business (still promoted by Nipper the dog) that it bought from General Electric in 1986, after GE bought RCA2.
On 1 April, 2007, HMV announced that Gromit the animated dog of Wallace and Gromit fame would stand in for Nipper for a three month period, promoting children's DVDs in its UK stores.[3]
[edit] The HMV Group (retail)
The name HMV is still used by the chain of entertainment shops founded by Gramophone Company in the UK, which continued to expand internationally through the 1990s. In 1998 HMV Media was created as a separate company leaving EMI with a 43% stake. The firm bought the Waterstone's chain of bookshops and merged them with Dillons. In 2002 it floated on the London Stock Exchange as HMV Group plc, leaving EMI with only a token holding. HMV shops in Australia, Ireland and the UK also use Nipper. As of August 2006, there are over 400 HMV stores worldwide.[4]
The image of "His Master's Voice" now exists in the United States as a trademark only on radios and radios combined with phonographs, a trademark owned by Thomson subsidiary RCA Trademark Management SA.
With that exception, the "His Master's Voice" dog and gramophone image is in the public domain in the USA, its United States trademark registrations having expired in 1989 (Sound recordings and phonograph cabinets), 1992 (television sets, television-radio combination sets), and 1994 (sound recording and reproducing machines, needles, and records).
HMV had a handful of stores in the Eastern United States, which was overseen by HMV's Canadian operations. However, poor real estate decisions made in the early 1990s rendered the United States stores uneconomical and HMV gradually extricated itself from leases, with the final store in the United States closing in 2006.
The reverse of this was seen on home turf. At some point in the mid-1990s, following a nationwide expansion, HMV's stores over took rival chain Our Price in popularity, after a number of years of close and fierce competition with them since the late 1980s, a blow Our Price never recovered from.
Our Price did continue trading until the end of the decade and even merged with Richard Branson's Virgin stores for a number of years, during which time (both outlets combined) over took HMV, but this was too little to late and Our Price eventually closed some years later.
HMV's stores in the United States, having lost £0.5 million in 2003 and £1 million in 2004, closed its last store in the US on 3 November 2004.[5]
In contrast, HMV particularly has a strong position in Canada's music market, with 112 stores as of August 2006 and being named "Canadian Music Retailer of the Year" for almost two decades[4]. However, HMV Canada has also encountered controversy in recent years by removing from sale albums and other recordings made by artists that have made exclusive distribution deals with other retailers; artists affected by this move include Alanis Morissette and The Rolling Stones[6].
[edit] Mergers and attempted takeovers: 2005 & 2006
For most of 2005 The HMV Group circled book chain Ottakar's in order to take the smaller firm over and then, like Dillons before it, merge it into the larger Waterstone's operation. Even though for a company like HMV this would prove a good fit, as many of the Ottakar's branches were in smaller towns and outposts, a large proportion of the book trade (writer, independent publishing companies as well as readers/fans) were against this move as they believed it would create a giant that would push out independent and interesting literature in favour of high volume turnover and price-led offers.
However, the Christmas period of 2005 was disastrous for the HMV group, with many product areas falling in sales. As a result, HMV itself became susceptible to a takeover, this time from a private equity firm called Permira. On Tuesday, 7th February, The HMV Group received a £762 million takeover bid (based on 190p a share) from Permira, however HMV rejected it as being an insufficient valuation of the company.[7]
If Permira does win control of the company, and if Tim Waterstone does not launch a counter offer for the book retail operation that he formed in the 1980s, then Permira might merge the two chains into a major entertainment retail chain that follows the blueprint of stores from The Borders Group or decrease the floorspace away from music retailing in HMV in favour of expanding the book and DVD areas in-store.
Even with a revived bid that increased the value of the company, HMV felt that their firm was being undervalued and so rejected that offer of takeover as well. By the beginning of March 2006, HMV released a statement that the Permira offer undervalued the medium and long term prospects for the Group[8], resulting in Permira's withdrawal from the bidding.[9]
[edit] Ottakar's takeover
The Competition Commission provisionally cleared HMV Group, through Waterstones, for takeover of the Ottakar's group on March 30, 2006. The Commission stated that the takeover would "not result in a substantial lessening of competition", and was "not likely to affect book prices, range of titles offered or quality of service." Through extensive research they also found that "contrary to widespread perception, Waterstone's, like Ottakar's, operates a book-buying system which mixes central and local input on stock selection." [3]
Waterstones then announced that it had successfully negotiated a takeover of Ottakar's on May 31, 2006. HMV chief executive Alan Giles said in a statement: "A combined Waterstone's and Ottakar's business will create an exciting, quality bookseller, able to respond better to the increasingly competitive pressures of the retail market." Ottakar's chairman Philip Dunne said: "Over the last year the book market has undergone a significant change with new levels of competition from the supermarkets and online retailers impacting all specialist booksellers and in particular those with insufficient scale to compete on equal terms."
[edit] HMV Australia
After 75 years of music retailing history and with 32 stores in Australia, the HMV Group decided in September 2005 to focus on the UK, Irish, Canadian and Asian markets and sell its HMV Australia subsidiary to Brazin Limited (known briefly in the UK as Sanity Music) for AUS$7.3m (£1.7m). HMV is currently breaking into far eastern markets by opening a number of stores in Japan and China.
[edit] See also
[edit] Notes
1 - HMV shops1 in Canada and Japan are still not allowed to use Nipper for these reasons; nor did the shops HMV operated in the United States in the late 1990s and early 2000s.
2 - Thomson2 bought the RCA trademarks, including Nipper in the Americas, from GE in 2003.
[edit] References
- ^ http://beta.hoovers.com/hmv/--ID__57099--/free-co-factsheet.xhtml
- ^ The Nipper Saga. Retrieved on May 27, 2006.
- ^ http://news.bbc.co.uk/1/hi/entertainment/6516235.stm
- ^ a b HMV Adds Gaming. Marketnews.ca. 28 August 2006. Retrieved 13 September 2006.
- ^ HMV Group plc (17 January 2005). Operating Review (PDF). Interim Report 2004 pp. 3-4. HMV Group plc. Retrieved on December 30, 2006. “...HMV USA, where the last store [of which] closed on 3 November 2004."; "...a £1.0m loss last year and £0.8m of losses made in HMV USA in the prior year...”.
- ^ "HMV pulls Alanis product to protest Starbucks deal". CBC Arts. 14 June 2005. Retrieved 13 September 2006.
- ^ Retailer HMV rejects bid approach. BBC News (7 February 2006). Retrieved on December 30, 2006. “Music retailer HMV Group has rejected a £762m ($1.3bn) takeover approach from private equity group Permira. HMV said the 190 pence a share offer, which it received last month, undervalued the company.”
- ^ HMV rejects second bid approach. BBC News (13 March 2006). Retrieved on December 30, 2006. “'The board unanimously believes that the revised proposal from Permira continues to undervalue the group,' the company said.”
- ^ HMV suitor Permira abandons bid. BBC News (20 March 2006). Retrieved on December 30, 2006. “Permira said it was 'disappointed'... and would no longer be bidding for the firm.”
