HMV shares on back of download decision

Shares in HMV rose more than 3% as investors welcomed news that the company would offer digital downloads online as well as mp3 players in its stores.

Seymour Pierce analyst Rhys Williams said HMV had come up with a sensible strategy, investing a relatively small amount in a market “which could prove quite sizeable in future”.

The market for digital downloads is underdeveloped at present and worth less than €30m in revenues – the lion’s share of which was taken by iPod.

But he added: “As more and more companies focus on music downloading, we anticipate a host of new products which will slowly eat into the iPod’s market share.”

In a note, Baird analyst Paul Smiddy said questions remained over how the ongoing relationship with Microsoft would work.