In what has to be seen as a major body-blow for the Irish music industry, HMV have confirmed that they are closing down their four Irish stores. The news comes in the wake of reports last week that global physical sales of music dropped substantially in the first half of 2016.

The drop came despite the uplift in sales occasioned following the deaths of rock greats like David Bowie (pictured) and Prince, among others.

Reports that HMV would be launching a “rival to Netflix”, however, seem to be somewhat wide of the mark. Industry insiders have confirmed that HMV has been working, for the past year, on developing a new platform, which will combine the sale of music via download, with video-on-demand, and which will allow for the purchase – as well as the rental – of film, TV and box set titles. Rental allows consumers to download titles and hold them for a specified period, before the right to view expires.

No precise timeline has been decided for the closure of the Irish stores. However, the decision will certainly have disappointed record industry bosses here. While the stores were battling to minimise losses in a difficult trading environment, HMV in Ireland had been in negotiations with Tesco about taking over the sales of CDs and DVDs in branches across Ireland, in an initiative that would have seen the HMV brand being established in Tesco supermarkets.

That would have provided a surge in the company's sales of physical product – which would likely have made the Irish end of the operation viable for the foreseeable future. However, Hot Press understands from industry sources that the decision to close the Irish stores was accelerated when Tesco stalled on making a final decision on the deal.

Hot Press has learned that the UK supermarket giant is currently in negotiations with Exertis to supply the stores with entertainment products – though no deal has been signed yet. Exertis describe themselves as Ireland’s largest distributor of IT and home entertainment products and related services.

Exertis was founded in Ireland 30 years ago and operates from a premises in Ballymount Industrial Estate. Exertis was formerly known as Sharptext in Ireland, though a number of technology, specialist services and e-commerce companies have been brought together under the Exertis banner. Exertis Europe has a turnover of €2.9 billion.

Meanwhile, HMV’s comprehensive digital sales platform will aim to go live in January 2017. It will operate in the UK, Ireland, Canada and the Middle East, markets in which HMV is already well established. The physical sales business in the UK – where HMV has 120 stores – is still highly profitable.