After the RP-Sanjiv Goenka Group pulled the plug on its retail music business, other entertainment and lifestyle stores such as Crossword and
Planet M, too, aren't banking on music and films to drive revenues. Instead, they are focusing on categories such as books, toys and telecom products.
For instance, Videocon Group-owned Planet M's share of music in its revenue has fallen from 40 per cent a few years ago to 25 per cent. The chain expects this to fall to 10 per cent by next year, said chief executive Sanjay Karwa. "Music retailing is seeing a lot of challenges from piracy, free downloads, etc. Today, nobody wants to listen to music released two to three months ago," he said.
In the last three years, Raheja-owned book chain Crossword has halved the share of music in its revenue to two per cent; the share of films has declined from 12-13 per cent to eight to 10 per cent.
Late last month, online retailer Flipkart shut its music download service, Flyte, owing to piracy issues.
The low margins in music - about 30 per cent, compared with 40 per cent for books - and lower sales per sq ft have prompted retailers to reduce focus on retailing music. "The physical format has no future. Possibilities to scale up aren't there. We are investing in the digital platform through Saregama," said an RP-Sanjiv Goenka Group executive. On whether the group could have focused on diversification within stores, he said, "Right now, we are focusing on hypermarkets under Spencer's Retail; we will grow the others depending on the opportunity."
Crossword would add e-books and e-devices to its offerings by September. Currently, it is in talks with content providers. The availability of book titles and a fall in discounts and free deliveries by e-commerce portals had helped book retailers such as Crossword, said Kinjal Shah, chief operating officer. "We are seeing nine per cent like-to-like growth in books and 15 per cent growth compared to last year," Shah said.
In its large stores, Tata-owned books and music chain Landmark had devoted 3,000-4,000 sq ft to toys, compared with 1,500 sq ft earlier, Ashutosh Pandey, chief operating officer, told this paper last year. In September 2012, Landmark had announced a foray into e-books.
In the past year, Planet M has seen about 100 per cent growth in the toys segment. It is carrying out various programmes to boost sales.
To beat high rentals, it is opening stores under the kiosk format.
MUSIC HAS LEFT THE BUILDING
- RP-Sanjiv Goeka group closes all Music World Stores
- Flipkart stops music download service Flyte
- Share of music at Planet M has come down from 40 % to 25 % now. The share to go down to 10 per cent.
- Share of music at Crossword down to 2% from 4% earlier