Music stores changing tune

Corporate houses getting into music retail are turning the outlets into multi-product stores that will offer apparel and even perfumes.

Mumbai-based conglomerate Videocon, whose retail chain NEXT acquired Planet M from media house Bennett, Coleman & Co last week, plans to sell a range of information technology products from the music stores.

Videocon will also increase the number of Planet M outlets from 150 in 42 cities to about a thousand across the country.

It seems this will be the new tune for such large, multi-product stores, with big corporate houses getting into music retail.

The standalone stores are beginning to realise that combination stores offering a range of accessories, apparel, perfumes and electronics in addition to music and entertainment are the future.

Music and visual products have a 10-25 per cent margin, and this is declining, while accessories and value-added goods give 40 to 80 per cent.

Music is money
According to industry federation FICCI and consultancy firm PricewaterhouseCoopers, the Indian music industry will grow 30 per cent annually to about Rs 8,700 crore in four years.

This has lured biggies Videocon, Reliance Retail and Emami to music retail, that was thus far dominated by RPG's Music World, Trent's Landmark, Odyssey, the Music Shop, Music Now and a handful of standalone stores like Rhythm House (Mumbai), Sangeet Sagar (Hyderabad) and Rhythms (Bangalore).

With the new entrants have come online platforms such as Apple iTunes, MSN Music, Napster, Nokia and AOL Music into music stores.

"Planet M gives us the opportunity to offer products and services demanded by the new-age Indian. We will launch a range of IT products through Planet M stores," said Dhruva Chandran, chief executive officer, NEXT.

Different tunes
Mukesh Ambani's Reliance Retail plans to launch music and books retailing at 30,000 sq feet large format stores that will display all styles of music, from western classical to devotional.

"We believe there is a scarcity of such stores, products and availability," said a Reliance Retail executive.

This has also compelled pure music outlets to change strategy. Rhythm House, the 55-year old iconic store, launched its website a couple of months ago, at which customers can choose titles and order online. Managing Director Amir Curmally says this is the only dedicated music portal.

Mehmood Curmally, Amir's nephew and director of Rhythm House, says the store is considering several options, like offering downloads for iPods, burning CDs, memory cards to store movies and music, MP3 discs, and setting up kiosks at various locations. It has also started making compilations of songs from different albums.

"The times are such that people like us, who have traditionally been selling music have had to hedge and even get into stuff like gaming. But the silver lining is that the music pie is growing," Amir Curmally said.

According to retail consultancy Technopak Advisors, music sales have slowed over the past six to seven years. Regional and devotional music, however, has been growing.

"Music retailers can no longer sell only music and entertainment as sales are decreasing and margins are under pressure. They have to go with the flow," said Purnendu Kumar, associate director, Technopak Advisors.

Hemant Kalbag of consultancy A T Kearney says, "It is a challenge for standalone stores to adapt to the changing situation. However, music retailing isn't saturated and opportunity exists for another four to five years."