As per a report in Economic Times, the RP-Sanjiv Goenka group is in the process of shutting the chain of Music World stores, 16 years after the business was launched. The steadily falling margins and sales of pre-recorded stored music due to piracy, digitization in the industry and increasing option of being able to download music straight off the internet has rendered the business unprofitable. Sales are said to be down by 50% year on year. Revenues dipped to Rs 35-40 lakh a month in 2013 from Rs 70 lakh a month in 2012. As a result, even the largest Music World store, located on Park Street in Kolkata, which has been the highest revenue grosser in the whole chain, will close doors on July 1, 2013.
Music World, a wholly-owned subsidiary of Spencer's Retail, retails audio CDs, DVDs, gaming consoles and software. It was one of the early entrants into the specialty retail space, opening its first store in 1997, and then taking the franchise route in 2003.The group is now merging the music stores with Spencer's Retail. Employees of the music retailing business are being absorbed into other companies of the group. The company, which had some 40 shops across the country, has been scaling down its operations since the beginning of April 2012.
Music World is not the only retailer to be feeling the pain of changing times Planet M's share of music in its revenue has fallen from 40 % a few years ago to 25 % and is expected to fall further. In the last three years, the Crossword chain of book stores has halved its share of music revenue to 2 % while the share of films has declined from 12-13% to 10 %. Last month, online retailer Flipkart shut its music download service, Flyte, owing to piracy issues.