Customer Solution Case Study
/ / HMV Brings Digital Music to a Wider Community with a Revolutionary New Service
Overview
Country or Region:United Kingdom
Industry: Retail
Customer Profile
Part of HMV Group, HMV is a leading specialist retailer of music, DVDs, videos, and computer games in the United Kingdom and Ireland. It has more than 200 stores nationwide, and an online store, HMV.co.uk.
Business Situation
The revolution in digital music prompted HMV to learn as much as possible before building its own digital offering. The retailer wanted to take a different, more customer-focused approach than its competitors.
Solution
HMV worked with Microsoft® Services, and the Microsoft Windows Media® Player product division to build HMV Digital using the Microsoft .NET Framework. The solution runs on Microsoft Windows Server™ and uses Microsoft SQL Server™ 2005.
Benefits
Provides extensive compatibility and more devices.
Offers a digital service based on proven music experience.
Extends and enhances the in-store offering and Web site.
Enjoyable and easy-to-use service / “We’re entrusting Microsoft and our partners with the credibility that we have built up over many years. When it comes to integration, to application building, and to DRM, Microsoft is clearly the leading software company in the world.”
Mark Bennett, Head of Digital, HMV
Specialist music retailer HMV has more than 200 stores across the U.K. and Ireland and an online store, HMV.co.uk. The recent revolution in digital music prompted HMV to develop its own digital offering with a different, more customer-focused approach than its IT-based competitors. It chose to build HMV Digital on Microsoft®products and technologies, including the Microsoft .NET Framework and Microsoft Windows Server System™, working closely with Microsoft Servicesand the Microsoft Windows Media® Player product division. The retailer’s proven understanding and experience in the music industry, combined with Microsoft products and technologies, has given HMV the potential to lead the digital market. Microsoft technology helps open up numerous possibilities, including compatibility with a wider range of portable players, greater integration, and more user-friendly technology.
Situation
HMV is the United Kingdom and Ireland’s leading music, DVD, and games specialist. Since its first store opened in 1921, HMV has grown to include more than 200 stores across the U.K. and Ireland, as well as a successful online store, HMV.co.uk.
The retailer is dedicated to bringing its customers the widest possible range of music, films, and games across all formats. Recently, the industry has seen a new revolution in the form of digital music, which offers anytime availability through a range of channels. And with an influx of digital players being released onto the market, more consumers than ever are taking advantage of this new means of acquiring music.
According to Mark Bennett, Head of Digital, HMV, the U.K. digital downloads market is bringing in £500,000 (U.S.$903,500) of business a week, and is expected to grow to a £40 million (U.S.$ 7.22 million) industry in 2005. He says: “Most forecasters predict that in the next four to five years, roughly 10 per cent of the music market will come from digital distribution.”
In the early stages, HMV watched the industry closely to learn as much as possible before building its own digital offering. The retailer wanted to take a different, more customer-focused approach than its competitors. Its experience in the music industry was key. “We needed to offer a platform for enlightening and educating the customer about digital music. We’re not an IT company so we needed easy-to-use technology to ensure we’d get the right message to our customers,” says Bennett.
“Our advantage is that our customers are still shopping with a music brand they know and trust.”
Solution
Before deciding on an IT infrastructure to support the new service, HMV examined the different technologies available, including hardware manufacturers and Web-based applications.
“It quickly became obvious that in the digital world, Microsoft had the experience we needed. Microsoft® Windows Media® Player and Microsoft Windows Media digital rights management are ideal technologies to work with, with exceptional compatibility with portable devices,” says Bennett. “We were looking for a partner to build this solution and give us strategic leadership, and Microsoft stood head and shoulders above the rest.”
HMV worked with the Microsoft Solutions Delivery Group, part of Microsoft Services; the Windows Media Player product division, and Microsoft Gold Certified Partner Conchango to build the infrastructure for HMV Digital. It was developed using the Microsoft .NET Framework in just six months. The solution runs on the Microsoft Windows Server™ 2003 Enterprise Edition operating system, and utilizes Microsoft SQL Server™ 2005 and Microsoft Internet Security and Acceleration (ISA) Server 2004. The system will be monitored using Microsoft Operations Manager (MOM) 2005, with fault tolerance at every layer to ensure continuous, 99.9 per cent availability. Windows Server 2003, SQL Server 2005, ISA Server 2004, and MOM 2005 are part of Microsoft Windows Server System™ integrated server software.
HMV Digital integrates seamlessly with the organisation’s existing IBM systems, which contain the content used on HMV.co.uk. This means that customers can use the same logon and password for the digital service that they use for the existing Web site, and retrieve existing catalogue and search information.
HMV Digital offers a customised Jukebox, which guides customers through different options for browsing, buying, listening to, and managing their music online—all from one place. To start, customers need to load an application, which runs on the Microsoft Windows® XP operating system, onto their computers. This software comes on a CD-ROM, which can be purchased from any HMV store, or downloaded from the HMV.co.uk Web site. Bennett says: “The application manages the user experience. They can copy CDs to computer, store them in a library, or copy them to digital players without even having to go online.”
Windows Media Player offers a user-friendly interface through which users can manage their personalised HMV Digital online store. Here, they can purchase individual tracks for permanent download. Alternatively, a subscription model offers a licence that gives them permission to download as many tracks that appear in the HMV digital catalogue as they like.
Microsoft Windows Media digital rights management (DRM) manages user rights and prevents the unauthorised use of music. HMV can manage further permissions, such as whether users can burn a track onto a CD, or the number of plays of a track to which the user is entitled.
HMV has invested in extensive training for employees so they can pass on their knowledge and understanding to in-store customers. “Despite the fact that many employees were unfamiliar with digital music, most were completely competent and excited about its possibilities within a couple of days of training,” says Bennett.
Benefits
HMV’s main aim for HMV Digital is to make the new format simple and easy to understand for all consumers. HMV is a known and trusted brand, expert in building and maintaining strong relationships with customers. For HMV, adding a digital service is simply an extension of its current offering. “Many consumers still aren’t quite sure about digital music. With this service, we can introduce them to it without blinding them with technology,” says Bennett.
Meeting the Competition Head On
The retailer’s proven understanding and experience in the music industry, combined with Microsoft products and technologies, gives HMV the credibility to achieve a dominant position in the market. Using Microsoft technology opens up numerous possibilities, including compatibility with a wider range of portable players, greater integration, and more user-friendly technology. By integrating with existing technology and reusing information, HMV has minimised set-up costs and time-to-market for a service that offers maximum functionality.
Unlike many of its competitors, HMV is a specialist music organisation that is using technology to suit the music, rather than adding a music service to a technology business. “We have worked with major and independent labels for decades, have strong product and marketing teams, and have sold every music product worth selling. It is the kind of experience you can’t build up overnight and something our technology-based competitors have found difficult to replicate,” says Bennett.
“Unlike many proprietary solutions, most record companies have approved the Microsoft DRM model and most movie companies have approved the Windows Media Video format. That makes it so easy for us. No other software provider comes close,” says Bennett.
Enhanced In-Store Experience
To make the service even more accessible, HMV is setting up a digital area in every store. As well as providing a customer service point for employees to answer questions and offer advice, these areas will provide the HMV Digital client software, a range of digital players, and accessories. “Here, trained employees will guide customers through the process of setting up and using the digital service. The same people that have been selling CDs, DVDs, and games for years will give users simple and friendly advice about what digital music means to them, why it’s fun, and how they can get involved,” says Bennett.
“We will distribute free ‘introduction to digital’ guides, which explain the benefits of digital and how it works, and set up touch-screen demos.”
Customers will also be able to purchase gift cards and pre-paid subscription cards. These will contain a code, which can be entered online to gain credits on their HMV ‘e-wallet’. They can then use these on HMV.co.uk or on the digital service.
Bennett expects to see a positive impact on traditional sales channels. “The High Street store will never be redundant. There is a virtually insatiable demand from the public to replace their portable CD and cassette players with new digital devices, which they can buy in-store,” he says. “And the more people are introduced to new music digitally, the more likely they are to come to the store to purchase albums or CDs.”
Engaging Local Communities
HMV takes pride in its connection and involvement with local bands, venues, and music events. The retailer has an established presence in communities, and understands that for many people, their local area offers the best in live entertainment.
“We aim to replicate that in our digital service,” says Bennett. “By personalising our customers’ online digital area to their tastes and environment, we plan to strengthen the local element of the service. We can introduce people to new local music or events, generate more of a community feel, and encourage even greater support for local entertainment than ever before.”
Extending Quality Services
Customer service, quality control, and reliability are primary features of HMV’s traditional stores and Web site. Making sure stock is available at all times, and ensuring customer queries are answered quickly, are part of running a leading retail business. It was important that HMV Digital also reflected this kind of service.
Microsoft technologies ensure the service is continuously accessible, and easy to maintain and build on. “Making sure the technology works is the most important part of the whole service. We’re entrusting Microsoft and our partners with the credibility that we have built up over many years. When it comes to integration, to application building, and to DRM, Microsoft is clearly the leading software company in the world,” says Bennett.
Roadmap for the Future
According to Bennett, HMV has committed its future to the Microsoft environment. “We are happy to be led by Microsoft and its future roadmap,” he says. “Many hardware manufacturers are also committed to Microsoft, which is important because interoperability is key for consumers—they need technology and devices that simply plug in and work.”
The retailer also plans to continue to develop the offering, and explore potential new channels, such as the Windows XP Media Center Edition 2005 operating system for home entertainment. Another possibility is mobile technology, and HMV is already looking into partnering with software companies that base their solutions on Microsoft Windows Mobile®–based software. HMV plans to stock mobile devices with digital music features in-store.
Bennett says: “Everything we sell in our stores has the potential to move into digital distribution, including films, music videos, and books. Digital is definitely the future for us and we’ll carry on introducing new products to ensure people get involved with digital through HMV.”
About Microsoft’s Smarter Retailing Initiative
The Microsoft Smarter Retailing Initiative helps retailers win today by leveraging current investments, and win tomorrow by easing delivery of new retail experiences. Consisting of Smarter Shopping, Smarter Selling and Smarter Operations, the Smarter Retailing Initiative is designed to close the loop between the retailer’s strategy, the in-store execution and familiar technologies already in the consumer’s hands.
More information can be found at:
Microsoft .NET Framework
An integral component of the Microsoft Windows operating system, the Microsoft .NET Framework is for building and running the next generation of applications and XML-based Web services. It provides a highly productive, standards-based, enterprise-ready, multilanguage environment that simplifies application development, enables developers to take advantage of their existing skill set, facilitates integration with existing software, and eases the challenges of deploying and operating Internet-scale applications. The Framework consists of two main parts: the common language runtime and a unified, hierarchical class library that includes a revolutionary advance to Active Server Pages (Microsoft ASP.NET), an environment for building smart client applications (Windows Forms), and a loosely coupled data access subsystem (Microsoft ADO.NET). For more information about the Framework, go to:
msdn.microsoft.com/netframework