A tricky negotiation here for the Majors. HMV are clearly in desperation mode and need the sale or return terms to give them a bit of breathing space. For the Majors this represents a dilemma. If they agree to SOR then they expose themselves to greater risks at a time of plummeting revenues by way of CD sales. Furthermore the risk may have no upside because HMV may go bust anyway.

On the other hand if they leave HMV in the lurch and it goes down without the Majors having tried to help, then the last specialist music chain in the UK disappears from the High street. This is an even worse prospect for the Majors.

I would expect this WATNA (Worst Alternative to a Negotiated Agreement) to govern the Majors attitude and encourage them to find some way of helping HMV in its darkest hour, whether that’s through limited SOR or some other concession.

A response to this (Musicweek.com)