With mobile VAS services on the decline, and activations at an all time low, content distribution firm Shotformats is doing what most VAS companies have been talking about doing for years – going offdeck and offline to distribute content and apps through retail outlets. Shotformats plans to retail music, movies, games and apps, and roll out a distribution network of 10,000 retailers (mobile recharge and phone accessories shops) over the next six months, and 30,000 retailers in 1 year. The opportunity they’re targeting is outlined by Niyati Shah, MD & CEO, Shotformats in the press release, who says that “As per our research, 95% of mobile users in India are prepaid users of which around 30-40% visit mobile recharge shops at least twice a day for getting recharges.”
Will retailers buy?
Whether or not that is true, a retail rollout of recharge and accessory shops comes with its own challenges, especially the lack of shelf space in most recharge outlets (which are tiny and packed with products on sale), and how patient the retailer is for a low margin product such as a recharge. Small shopkeepers use mobile recharges as a means to an end – bringing a potential customer to a shop, hoping that she will purchase multiple items. Whether retailers and shopkeepers have the patience for this, and whether customers are interested, remains to be seen.
(Update) Shotformats has sent us the following clarification: “Shotformats identifies retailer shops that offer mobile recharges/mobile handsets/mobile accessories and are high on the number of footfalls. These identified shops are not the dingy shack shops, but are prominent points to sell mobile related products. The may or may not be very large in size, but will have a laptop, through which the retailer can log into his Biscoot registered online account and transfers the Biscoot apps on various devices by connecting them to their laptops.
Those who do not wish to house this set up and sell Biscoot products, are of course free to not house it, but our target is those shops that can promise good footfalls, can have a basic laptop or PC, and most importantly, are eager to add an additional stream of revenue for their business. This is a win-win tie-up for both the retailers and the company and we are already witnessing positive response across the country. No company can claim to target 30-40 000 stores in the first couple of years without being aware of the industry they are targeting.”
Offline distribution has been tried before: telecom operators used to sell content offline via scratch cards, and Qualcomm Ventures and Indo-US backed startup Onward Mobility has built out its own retail network for physical retail of apps. For the longest time, companies working with (and through) telecom operators were afraid of going off-deck and offline, for the fear of upsetting their clients. Telecom operators used to also ensure that no single VAS company grew too big, and played one against the other, to ensure their control over the ecosystem. With the decline of VAS, and the growth of Mobile Internet in India, VAS companies going off-deck is no longer a concern. (Also read: Why Onward Mobility’s Arun Menon Thinks Physical Retail Of Apps Will Work)
Biscoot credits as a digital currency? Just store credits
What’s interesting is that Shotformats is taking the store credits approach, similar to a prepaid balance on mobile. Customers can buy credits called “Biscoot credits”, and store them in a wallet called Biscoot Batua. The choice of “Biscoot” as a name is understandable – Shotformat owns Biscoot.com, and runs an online radio (Biscoot Bajao) and movie streaming (Biscoot Talkies), among other services on the site. The offline rollout is clearly for retailing content which it has licensed.
– Store rollout: Offline Application Stores are being launched in a staggered manner and the initial phase will cover Mumbai, Pune, Aurangabad, Nagpur, Ahmedabad, Baroda, Rajkot, Jaipur, Jaisalmer, Surat, Chandigarh, Bhopal, Indore, Rewa, Jabalpur, Lucknow, Kanpur, Allahabad, Guwahati and Siliguri.
– Languages: The content will be available in 8 languages – Hindi (Bollywood), Malayalam, Tamil, Telugu, Kannada, Bhojpuri, Marathi and Assamese.
Updates: added a clarification from Shotformats, corrected a typo