High Voltage, Low Turnout

UK retailer HMV’s expansion into the live music business is seeing mixed results so far, with its new High Voltage Festival in London’s Victoria Park July 24-25 losing £1 million ($1.5 million).

The event produced by Mama Group, which HMV bought for £46 million ($71 million) in February, pulled about 17,000 per day to the 30,000-capacity site.

The bill was put together in cahoots with leading rock magazines including Classic Rock, Metal Hammer and Prog Rock and featured ZZ Top, Foreigner, Emerson, Lake & Palmer, Saxon and Gary Moore.

“Our expectations for a brand-new year-one festival were just too high,” said HMV chief Simon Fox. “What we did was overestimate the number of people that would come to an inaugural classic rock festival.”

The Lovebox Festival, which also belongs to HMV and was staged in the same park July 16-18, did better by pulling 25,000 per day to see a lineup that included Dizzee Rascal, Roxy Music, Grace Jones and Ellie Goulding.

Fox, who will be telling Live UK Summit delegates about HMV’s entry into the live side of the business in London Oct. 6, was talking after his company’s like-for-like sales plunged by 14.9 percent in the 19 weeks leading up to Sept. 4.

“The World Cup disrupted the pipeline for new entertainment products, and the games market continued to be weak,” he explained, although remaining bullish about results improving in the lead up to Christmas.

The news of HMV’s results wiped nearly 11 percent off the company’s market value as the share price fell from 66 pence to 59 pence.

Fox has launched HMV on a 360-degree approach to entertainment, intending to create what he’s called a superbrand. Some HMV backers appear nervous about the strategy as the share price has dropped almost 50 percent in the past 12 months.

“We want HMV to be the first port of call for people when they think about entertainment – tickets, venues, festivals, digital, physical product, merchandise, film and fashion,” Fox told investors in July, shortly after announcing profits to the end of March were up 18 percent year-on-year. “We want as much of their entertainment wallet as we can get.”