Nipper the Dog

There have been many casualties of the so called “digital media” revolution. A rapidly shrinking market for physical copies of compact discs (CDs) and DVDs is one of them. The expansion of the ability to stream, download and share digital formats of a wide variety of media combined with the rise of legitimate online marketplaces such as iTunes and Amazon’s digital download service, the number of CDs sold in retail outlets has dropped considerably over the last decade. The number of CDs sold in 2010, 326.2 million, was the least overall total since Nielsen SoundScan began tracking the number in 1991. One struggling retail chain that has been dramatically affected by this shift to digital media is the HMV group in the UK.

The potential close of almost 230 HMV Company stores is a direct result of the eroding CD market and consumer base that still purchases physical CDs. As the retailer begins to regroup after going bankrupt, there has been considerable interest in among investment groups to purchase the HMV trademarks and brands. HMV’s brand is centered on Nipper the dog. The trademark pooch has been the predominant logo of the company for nearly a century. It is estimated that the trademark and goodwill associated with Nipper is HMV’s largest asset and is valuable if sold to outside investors. Beyond Nipper, HMV also has roughly 50 trademarks registered with the British Intellectual Property Office. These trademarks range from HMV’s failed social media website, “HMV Get Closer” to “HMV Headphone Hut” and others. Nipper is registered as a trademark for everything from coffee shops to toys to clothing.

In 2011, HMV estimated that their intangible assets were worth £48.7. It is clear that the intangible assets, especially the Nipper the Dog brand icon, have the potential to retain value, even as the retail arm of HMV declines.  The biggest hope for HMV is to continue the migration away from the physical locations of CDs to online retail. Other failed chains have been able to successfully restructure, and with a recognized brand like Nipper, HMV could also pull off this feat.

Discussion: How have other declining brands regrouped and used a strong brand to leverage alternative business models? What do you see as the future for media sales - purchasing electronic rights or “renting” the use of media for short-term enjoyment?

Source:Economic Times