Sales down? Announce a social network

13 March 2007

If there’s one sure fire way to get investors off your back, it’s to embrace the latest buzzword at the same time as announcing poor sales figures. HMV is just the latest high street retailer struggling with deteriorating sales and lower than expected profits.

According to the BBC, as well as reviewing its 421 stores and closing the most unprofitable, and assessing the effectiveness of its supply chain and administrative operations, it will “launch a social networking site for music and film enthusiasts”.

The official strategy update states that the site will provide “revenue streams from advertising, sponsorship and paid-for content.” Apparently Universal Music and 20th Century Fox are already signed up as content partners.

HMV Chief Executive Simon Fox says that the plans are “exciting, radical and far-reaching”. I hope for HMV’s sake that they work, but let’s not kid ourselves that social networks created by corporates are anything but indirect tools to drive revenue.

Effective social networking is about people and connections, not advertising and sponsorship. I would have liked to hear HMV talking about how they were going to enable those connections, not how they were going to ram more advertising and content down their customers’ throats in an attempt to generate more revenue.

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5 Responses to “Sales down? Announce a social network”

  1. Simon Collister

    It’s a sad indictment of HMV’s desperation ain’t it? Hitwise (I think it’s them) has already shown that more traffic to is from MySpace over MSN search.

    Plus I think it was Antony Mayfield that posted end of last year about evidence that corporate constructed social networks don’t work – quelle surprise!

  2. Niall Cook

    You are quite right, Simon. Antony’s post is here:

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