Exclusive: Flipkart to Shutdown Flyte MP3 Store; To Exit Digital Music Business [Updated]

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Flipkart to Shut MP3 Store

India’s largest e-commerce firm Flipkart, is planning to stop selling digital music on the site. While the service is still active, the company told NextBigWhat that at present, it makes sense to take a step back from Flyte MP3s and “revisit the digital music market opportunity at a later stage.”

The Flyte store will continue selling e-books.

Mekin Maheshwari, Head – Digital Media and Payments, Flipkart told NextBigWhat

“We have realized that the music downloads business in India will not reach scale unless several problem areas such as music piracy and easy micro-payments etc are solved in great depth. Which is why, we feel that at present, it makes sense to take a step back from Flyte MP3s and revisit the digital music market opportunity at a later stage.”

Flyte started with a catalog of a million tracks from 150,000 unique albums. Currently, it has an aggregated catalog of over 5 million Indian and international tracks. Flyte provides DRM (Digital Rights Management) free MP3 files at prices starting from Rs 6 a song and Rs 25 for an album.

Eight months ago, we reported that Flyte had crossed 600,000 downloads, but Flipkart said in February this year that its current registered user base for Flyte is around 1 lakh which enabled a total of 2.5 Mn downloads (songs).

So what went wrong for Flyte in MP3 genre?

In download businesses,  besides  bandwidth constraints, unavailability of micro-payment tools is a big challenge. Typically to enable a song download from Flyte, consumers need to pay around Rs 6-15. And to pay such small amount it is unlikely that consumer would use his/her credit or debit card.

Importantly, piracy is a big issue and Indian consumers aren’t very willing to pay for downloads as yet.

Streaming sites like Gaana, Dhingana and Hungama along with online stores that sell music such as Apple’s iTunes which launched recently in India  are making the digital music scene increasingly competitive. As physical music sales declines, record labels are also jumping online to sell music in India. Digital music sales overtook physical music sales in 2010.

Having said that, the opportunity still exists – maybe, at a different scale.

Thoughts?


UPDATE: Email from Flipkart

We hope you have enjoyed the music we have made available to you.

Unfortunately the Flyte MP3 store will no longer be operational after June 17, 2013. We request you to use your Flyte Wallet balance, if any, by that date. But if for some reason you are unable to do this then not to worry. We will refund the unused Flyte wallet balance to you.

If you would like to purchase any more music before the Flyte MP3 store shuts down, then please do so by June 17, 2013. All the MP3 files that you have purchased from Flyte on or before June 17, 2013 will continue to be available for download in your digital library till August 18, 2013. So do remember to download all your favourite music by then.

Dates to remember:

1. Monday, June 17, 2013: You will no longer be able to purchase MP3 files from Flyte after this date.The remaining balance in your Flyte wallet, if any, will be refunded to you.

2. Sunday, August 18, 2013: You will no longer be able to download your purchased MP3 files from your digital library after this date. So please download all your music by then.

So long – and thank you for being a part of this journey…