James Moore: Novelty could soon wear off for gadgets as HMV tries to change its tune

Outlook: Dr Dre has found a lucrative, alternative revenue stream... 'Dr Dre Beats' headphones

Remember when Simon Fox was the hottest thing in retail and was being linked to just about every high-profile job going? HMV's chief executive really should have jumped when (if) he had the chance a couple of years ago. Then his company was the last man standing among high street entertainment chains and appeared to be defying gravity. Now it is falling to earth so quickly he might not have time to open the parachute.

Mr Fox was yesterday trying to wring some positives out of an 8 per cent fall in sales over the last five weeks of the year, which tells its own story.

It might be not be as bad as the 13 per cent fall during the seven weeks to the middle of December, but he had the benefit of an extra weekend's trading this time around and even with that the business has simply swapped "dire" for "dreadful".

In HMV Live he at least has a division that reflects the shift in the wider music market: once it was recorded product that made the money and artists toured to promote that. Now it's the other way around.

Trouble is, HMV's balance sheet is in such a state that he's having to sell up. The division will probably fetch a tasty price but it might not be enough to repair the group's flaky finances or give his turnaround strategy time to come good. If it is viable.

What Mr Fox wants to do is transform HMV from a company that sells Dr Dre's records into one that sells his headphones.

On the face of it, that isn't as silly as it sounds. Dr Dre's name carries some cachet, and attaching it to a piece of recorded music (he's an accomplished producer) used to guarantee interest (and sales) from eager fans. Now it simply guarantees that they'll download it illegally.

There would be a certain irony in a gangsta rapper being hoist by his own petard like this. Except that things aren't exactly getting hard for gangstas: Dr Dre, right, has found a lucrative, alternative revenue stream in lending his name to the premium priced "Dr Dre Beats" range of headphones which start out at over £100 and top out at about £350.

There are monster margins in that price, and HMV is hoping to capitalise by focusing on gizmos such as these as well as laptops, tablets and MP3 players.

According to the numbers it seems to be working: HMV shipped half a million pairs of headphones and 20,000 tablets during the five weeks in question.

The trouble is, the UK's only specialist entertainment chain is moving from a field it has to itself but can't make work to one which is crowded and brutally competitive. The new-look gadget and entertainment chain has a certain novelty value. But that could wear off when Dre's savvy band of consumers realise they can buy his beats as well as his music for a lot less elsewhere.

 

Shareholders part of the problem on fatcat pay

Much sound and fury about the Coalition's plans for a crackdown on excessive boardroom pay at the weekend. There's nothing like having a go at City fatcats when you want to garner goodwill from the electorate you're squeezing.

And the City played right into David Cameron's hands with the CBI's director general John Cridland among the first to scream blue murder at the prospect of shareholders being handed a binding vote on executive pay.

One wonders just why he bothered. For a start shareholders already have a binding vote which allows them to strike down new executive share schemes. They even used it last year. Once.

As for the current advisory vote, according to the corporate governance watchdog Pirc, just 5 per cent of UK plcs faced a vote against of more than 30 per cent. For the first nine months of 2011 and the last three of 2010 the average vote against stood at just 5.9 per cent. That's up a tiny bit but abstentions fell.

If there's a problem with boardroom pay as Mr Cameron has suggested, institutional shareholders don't see it.

Should we be surprised?

Not really. The people in charge of those shareholders are part of the problem. Take Michael McClintock, who runs M&G, Prudential's fund management arm. In 2010 (the year for which the most recent figures are available) he was paid a basic salary of £350,000, a cash bonus of £1.052m, plus a deferred bonus of £552,000. That must have top bankers drooling given nearly all of theirs now has to be deferred.

With benefits, the grand total was £2.1m. In addition, he will get an "anticipated" £3.3m for his work in 2010 through Prudential's "long-term incentive plan". In disclosing this, Prudential is at least being honest. Most rivals don't bother.

Like Standard Life. Its top man in fund management is Keith Skeoch who enjoyed an inflation-busting 25 per cent rise in his basic pay to £425,000 during a year in which many Britons got nothing. The rise came late, so his total 2010 salary came in at £369,000. He also enjoyed a £1.4m bonus plus benefits that brought the grand total to £1.9m. With the aid of a calculator it's possible to "anticipate" a similar amount coming from the long-term incentive plan for 2010.

According to the annual reports each division did jolly well. One would hope so.

All the same, if a child is given the keys to a sweet shop they can be counted upon to gorge until a parent says no. The trouble with the City is that the parents are the institutional shareholders. They seem to be stuffing their faces along with the kids. Making votes on remuneration reports binding won't change that.

PROMOTED VIDEO
Sport
The Manchester United team walk out ahead of the pre-season friendly between Manchester United and Inter Milan at FedExField
News
i100
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
Arts and Entertainment
tv
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
News
media
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Travel
The shipping news: a typical Snoozebox construction
travelSpending the night in a shipping container doesn't sound appealing, but mobile crash pads are popping up at the summer's biggest events
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz