Why Flipkart has not activated MP3 purchase on iOS app; A 6-month report card on Flyte

14 Aug, 2012

It has been around six months since what is arguably the first serious attempt to sell digital music legally in India. And even as some of the numbers may suggest otherwise, the country's largest e-commerce firm does seem to have struck a stable note with its MP3 download platform branded as Flyte. It is also looking at new mobile platforms for Flyte and adding more music labels to the catalogue.

But first things first. Going purely by the numbers, track downloads have shrunk from what it was initially. One month after its launch in February, Flyte was recording around 8,000 track downloads per day. As we brought out in our report back in March, Flyte was estimated to be clocking gross revenues of around Rs 1.1 crore per month.

Six months down the line and with more than 6 lakh downloads since then, the firm says it is currently clocking around 1.5 lakh tracks on a monthly basis, which is basically 5,000 downloads a day.

Sameer Nigam, VP (Digital) at Flipkart, said, "We don't feel there is a sharp decline in daily downloads. It would be unfair to compare current figures with those seen during the launch phase. Any new product or service that hits the market sees a surge in traffic during the initial days but that gradually settles down. Our current traffic is quite encouraging and is growing at a steady pace month on month."

On the revenue side, we would expect income to remain more or less in the same region as our previous estimates as a good chunk of downloads comprise full albums, which have lower cost per track for the consumer. So the blended average revenue per download would be lower, compared to a position where only single tracks are downloaded.

According to Nigam, although albums are gaining traction and make a significant chunk of downloads, the net-net majority of track downloads are the 'singles'. This is similar to the position in March.

For the first time in June, Flipkart clocked Rs 100 crore in gross merchandise value shipped in a month. It maintained the monthly sales value in July, which means Flyte accounts for around 1 per cent of its total revenue.

More apps on the cards

Flipkart has recently launched iOS and Android apps for Flyte, and is already working on a Windows 8 app that we may see later this year, followed by a BlackBerry app early next year. But (understandably), the company has no plans to launch a Symbian app (sorry, Nokia).

But what seems a bit odd is that while users can make purchases via the Android app, the iOS app can only be used to download the already purchased tracks/albums.

So we asked Nigam and he said, "Apple charges app developers 30 per cent of the gross sales from customers' in-app purchases. And digital music stores like Flyte have to pay around 70 per cent royalties to the music labels. So it is impossible for music retailers to sell third-party content on iOS without incurring a loss."

However, the company is exploring various options to tackle this issue but it would be too early to comment on it, he added.

In the meantime, users can continue to buy and download music on Android app while Flipkart's current proposal for Windows 8 and BlackBerry apps means more options for consumers, thereby broadening its reach.

Flyte adding more music labels but what sells best

As of now, you will find more than 2 million unique tracks across 55 languages and 700 genres and sub-genres on the Flyte store (it started with over 1 million tracks). The company is constantly adding more music labels to its catalogue and some of the recent additions include EMI Music, Warner Music and YRF catalogues. Flipkart is also working with NH7 to bring Indie music to the store (read here for more on that) and it has recently got the entire Magnasound collection on Flyte – a rich collection of Indian pop from the 80s and 90s.

The top five genres are Bollywood, Pop, Devotional, Rock and Hindustani while the top five languages are Hindi, English, Tamil, Sanskrit and Telugu. Initially, Bollywood (it still remains No 1), followed by older classics (both Indian and western), were the most popular genres on Flyte.

Currently, the most popular track is from the Hindi film Cocktail while in the international section, the song Payphone by Maroon 5 and Whiz Khalifa is doing well.

(Edited by Sanghamitra Mandal)