A new trend is being witnessed with an arrival of original MP3 of albums such as 'Dance Masti Forever', 'Vivah' and 'Dhoom 2' which have hit the stands along with a regular CD/cassette version.
While a buyer has reasons to jump with joy since these MP3 come at a throwaway price with an added advantage of carrying an 'original' tag, retailers do not seem to be carrying similar sentiments. As per those who were spoken to, it is a professional hara-kiri to sell MP3s instead of CDs. And this is the reason why.
"First and foremost the margins are quite low. While I can send a regular CD for approx. Rs. 150/= and earn a margin of Rs. 25-30 at an average, in case of MP3 this comes down substantially since its cost is in the range of Rs. 60-80/=. Fair enough, I may still manage to cover some ground due to the volume factor as it is bound to grow, but then what happens to the other titles that I wish to sell.
Take an example of 'Vivah'. Its MP3 comes with not just the film's songs but about 40-50 other songs from Rajshri films. This means that automatically there is a hit on the sales of these Rajshri films which I could have sold otherwise through standalone CDs. Ditto for 'Dhoom 2' which comes with songs from 'Salaam Namaste', 'Veer Zaara', 'Bunty Aur Babli, 'Neal N Nikki' and many more. What happens to CDs of these albums then? I loose completely there", says the retailer.
So how do you intend to keep your margins intact? "Simple, we don't keep the MP3s on display", he says with condition of anonymity, "we hand it over to the customer only if he asks for the same. Otherwise we just keep the CDs on stands and earn from the margins we gain from their sales. See for big retailers like Planet M and Music World this is not an issue because first and foremost they have a corporate backup and secondly they have huge sales figures that are expected keep their standing afloat. But for us, it becomes quite a difficult task."
Now this brings one to think about the tricky situation the music industry finds itself in. For years it has been trying to combat piracy and when it takes a positive step to curb it, above is the kind of response it gets from the market.
A vicious circle indeed!