Chennai: Low e-commerce revenues have made Saregama India Limited (formerly Gramophone Company of India) popularly known as HMV, of the Rs 6,500-crore RPG Group, consider merging the management of its two music-related portals - Saregama.com and HamaraCD.com. While Saregama.com sells the company products, HamaraCD.com, the more popular and relatively successful of the two, offers digital downloading of music chosen by the customers.While Saregama.com is selling 50-60 CDs/cassettes online, HamaraCD is doing marginally better at 75-80 CDs on an average, say market sources. However, they said sometimes there are bulk orders.
The company is considering integrating the management of the two portals to avoid duplicating costs both in terms of people and technology, according to Mr Abhik Mitra, managing director of Saregama India Limited. So, what kind of savings will the company make in the new dispensation? "Significant", he said. However, we have not closed in on our decision on the matter, he added.
The company did not find it viable to run the sites as two separate entities. It was costing the company around Rs 5 crore per annum to maintain, market and promote each site, according to sources close to the company.
However, the e-commerce revenues were far below the original estimates and did not justify the money spent on them. While income from other sources of revenue like advertising were also negligible, they said.
Asked what would be the cost to run the sites after integrating their management, Mr Mitra told The Financial Express that they are currently in the process of drawing up the budgets.
Other measures by the company to cut costs include streamlining its supply chain management. It has hired Anderson Consulting to help it in the endeavour.
Musicworld.com in for recast
Another group company Spencer & Co Ltd's music portal Musicworld.com would no longer be an e-commerce site. According to sources close to the company, the site is being recast into a pure information/content portal. Compared to an estimated sale of 200 cassettes and/or CDs per day, the online sales on the site was a dismal two cassettes/CDs per day, they said. Saregama has picked-up a 42.85 per cent stake in the music retail chain, Musicworld.
Musicworld in for recast
Another group company Spencer & Co Ltd's music portal Music-world.com would no longer be an e-commerce site. According to sources close to the company, the site is being recast into a pure information/content portal. Compared to an estimated sale of 200 cassettes and/or CDs per day, the online sales on the site was a dismal two cassettes/CDs per day, they said. Saregama has picked-up a 42.85 per cent stake in the music retail chain, Musicworld.
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