E-commerce service, Flipkart has announced that it will be shutting down it's digital music store, Flyte for good. The service which is launched in February 2012 offered DRM-free MP3 downloads similar to iTunes or Amazon.com. The company is shutting down the service as it claims there is a insufficient demand for paid downloads in the country.
The music store will cease to function starting from June 17, 2013. Also, the Wallet service , which allowed Flipkart customers to put money into their digital locker, in order to buy songs or ebooks, will also be discontinued.
Users will now have to use other payment modes such as credit or debit card. The company has advised users to clear out their Flyte wallet balance before June 17, 2013. However, the company has noted that it will be refund the any unused Flyte wallet balance. The company also says that all the MP3 files that you have purchased from Flyte on or before June 17, 2013 will continue to be available for download in digital library till August 18, 2013.
Mekin Maheshwari, Head - Digital Media and Payments, Flipkart said, "We set up Flyte MP3s a year back in what was an extremely nascent industry. The aim was to bring legal digital content to consumers in India. In a short span of time we built a massive digital music catalog at very affordable prices along with a loyal base of nearly 100,000 customers. "
"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," He added.
Why Flipkart Flyte Landed?
Going by the record, currently, most of the consumption via streaming and download are audio based.
But in the coming years, consumption of music through digital route is set to increase according to FICCI - KPMG report. The growth is guess estimated to be at CAGR of 22% till 2016.
As far as Flipkart Flyte is concerned, the company faced serious threat and sales downfall with the incoming of Apple iTunes Store in India. In some cases, latest movie downloads at the time of launch were costlier on Flyte as compared to iTunes. Like, ab Tak Hai Jaan was priced at Rs. 108 on iTunes, while Flipkart's price quote was Rs. 135.
Reportedly, there were service issues as well, given that Flipkart has always been praised for its delivery and service. According to a TOI report, consumers switch from Flyte to iTunes when it launched in India, owing to "poor experience" with the Flipkart service.
When launch in a short period of time, Flyte crossed 600,000 downloads and in March 2012, it had reported 8,000 downloads daily. However, since the arrival of Apple iTunes in India, the initial surge settled and finally the digital online music store has been halted.