New Delhi: Online retailer Flipkart announced on Wednesday that it was exiting the digital music market in India. The company, which launched its Flyte MP3 store in February 2012, will cease digital music sales on 17 June.
“We set up Flyte MP3 a year back in what was an extremely nascent industry,” said Mekin Maheshwari, head, digital media and payments. “The aim was to bring legal digital content to consumers in India. In a short span of time, we built a massive digital music catalogue at very affordable prices along with a loyal base of nearly 100,000 customers.”
He added: “However, 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.” The store will continue to sell ebooks.
Users could create a “wallet” on Flyte to purchase songs (which cost as little as Rs.6) without having to enter credit card details. On Wednesday, the company sent out an email to users informing them that the MP3 store “will no longer be operational after June 17, 2013”. The mail went on to tell customers to use their Flyte balance, and confirmed that the unspent money will be refunded.
While purchases will stop on 17 June, users will be able to download any songs they already own until 18 August. Since the songs are DRM (digital rights management)-free, users can download them all to their computers and copy these to their music devices as well.
Earlier this year, at the one-year anniversary of Flyte, Flipkart vice-president, digital, Sameer Nigam, had told Mint that the biggest barrier to adoption lay in the payment process, which he felt needed to be simplified.
Nigam also said that in its first year, Flyte built a catalogue of over five million songs from more than 12,000 music labels around the world, with 2.5 million paid downloads in the first year. Despite the high download numbers, lack of suitable micropayment tools would have definitely been a major issue, which Maheshwari also alluded to.
At the same time, piracy remains a big issue in India and while the Flyte app did allow for the downloading of DRM-free music, things like download management and payments made it no simpler than pirating the content. That’s possibly why so many new services in the music space are focusing on free streaming services supported by ads.
It’s possible that the digital downloads market will pick up again—Apple’s iTunes store is going to help on that front, and some content owners are also experimenting in this space now. For now though, as Maheshwari noted, the market is still too small to support a large-scale enterprise like Flipkart.