Down boy! His Master's Voice wavers

HMV has seen off its retail rivals, but even music's king of the high street has had to close 40 outlets

It was the birthday present I most looked forward to: the envelope from my uncle containing a HMV voucher. Armed with my vouchers, all the way through my teens I would head for HMV in Oxford Street, making a beeline for the indie-rock section where I'd bump up against fellow indie fans' record bags and parka jackets as I thumbed through Radiohead albums – and the T-shirts to go with the music. There I would build up my music library with Nineties indie bands Ash, Seafood, the Verve, Manic Street Preachers and the odd pleasingly rare import. Elsewhere, pop, jazz and classical fans were doubtless doing much the same. In this temple of music, HMV seemed to have everything.

HMV, quite rightly, commands a privileged position on the high streets of Britain. Or at least, it did. A fortnight ago came the sad news that there will soon be 40 fewer HMV stores in which to spend vouchers on music, or indeed DVDs and computer games. As well as struggling to meet high-street rents, the company has had credit problems. Still, there are hundreds of outlets boasting the famous magenta lettering and HMV is expecting to take £46m in profit from its tills this year. Which isn't too shabby in the face of the digital nemeses of iTunes, Spotify and online piracy. And this week, the heads of the four biggest record labels, among other musical big cheeses, wrote to The Times to pledge support for HMV and laud its "vital role in breaking new artists and supporting British culture".

They're not wrong. A version of the famous logo we see on the storefront to this day was first used by the Gramophone Company – which later became the record label EMI – on a 78rpm record label in 1907. A few years earlier, the company had bought from one Francis Barraud the original painting of Nipper – the Jack Russell terrier, peering inquisitively into a gramophone horn – along with the slogan "His Master's Voice".

In 1921 the Gramophone Company opened its first high-street shop, as His Master's Voice, at 363 Oxford Street, after a ceremony presided over by no less a musical eminence than Edward Elgar.

Indeed, Elgar's presence probably counts as HMV's first in-store personal appearance. The shop was quick to innovate elsewhere, with its state-of-the-art interior design and eye-popping illuminated frontage – when its moving neon sign was switched on in 1921 it was described as "the most striking illuminated electric motion sign yet seen in London". Inside, music fans were ushered into a room to hear the latest recordings, from jazz to opera, before buying. With the arrival of the cheap 45rpm single after the Second World War came the listening booths, and a generation of baby boomer teenagers to pack them out, spin discs and scream themselves hoarse at PAs by Cliff Richard, Adam Faith, Acker Bilk, Eddie Fisher, Debbie Reynolds and the like. By the end of the Sixties, HMV had opened 15 more stores and was daring to call itself a "chain".

It was also the place where a fair chunk of rock history was fashioned. On the second floor of its original Oxford Street branch was a recording studio, where members of the public could make their first demos. It was here that Beatles manager Brian Epstein, trying to secure a record contract for the band, visited in February 1962 to cut some demo discs. The sound engineer said it sounded great, and passed it on to the music publishers upstairs. Next thing, George Martin, the head of Parlophone, then a small label for comedy acts, had signed them. Four months later, they were recording at Abbey Road Studios. (Cliff Richard was another artist whose demos, recorded at the HMV studio, gained him his first record deal, with EMI.)

Thirty-five years later, Paul McCartney returned the favour by appearing at HMV's Oxford Circus store for a record signing – 5,000 fans turned up and brought traffic in the surrounding streets to a halt. With hindsight, that heady day in 1997 looks a little like the last hurrah of old-fashioned music retailing. The Oxford Circus store was indeed a cathedral of music, measuring 50,000sq ft when Bob Geldof opened it in 1986.

This was the heyday of the CD, when the most that the music chains had to worry about were teenagers making mix tapes at home on cassette decks. Today, HMV has 285 stores and can take pride in the fact that over the decades they've seen off every high-street rival – Virgin, Our Price, Tower, Zavvi. They've also gamely thrown themselves into the boom in live music, taking over music venues such as the Hammersmith Apollo and the Jazz Café in London, among others, and festivals such as Lovebox, Global Gathering and the Great Escape. They also continue to promote new artists. (Clare Maguire and Jessie J will be appearing at February's Next Big Thing festival.)

The record industry didn't bother putting pen to paper last week out of mere nostalgia. Punters drawn into HMV will not find CD prices cut to the bone, as they do in the supermarkets; nor will they find the price comparison charts that abound online. Last year, physical album sales dropped by 7 per cent to just below £120m, and the producers of those diminishing numbers of CDs are desperate to see them sell at the highest possible price – an endeavour in which HMV is a key ally.

The uncharitable might say that the recording industry's letter to HMV this week is a billet-doux between doomed lovers. But let's hope not. The day we can't walk into a high-street record shop and rifle through the racks is the day the music dies.

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