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Why Flipkart Shut Down Flyte Music

Why is Flipkart shutting down its online music store Flyte Music a little over a year after launching it? While the company is unwilling to comment on it, beyond saying that there are issues related to music piracy and lack of easy micro payments, industry sources told MediaNama that there is more to it than just that. The questions that we were trying to find answers to - Flyte is just over a year old, so why shut it down so soon? What lessons are there in this for content businesses? Flyte Music had struck deals for India based music downloads on web and app by paying music labels an aggregate minimum guarantee (MG) of around $1 million (Rs 5.5-6 crores) for the year, multiple sources told MediaNama. Given the advent of music streaming services like Gaana*, Saavn and Dhingana, where users could stream music for free, but more importantly, the prevalence of piracy, the number of users willing to pay for a-la-carte music was fairly limited. Revenues from song downloads were fairly low - not even 50% of the minimum guarantee amount (only around Rs 2-3 crore is what we heard), and the ARPU was around Rs 9-12 per user, which made it difficult to justify the minimum guarantee, and any significant customer acquisition costs. More importantly, revenues from Flyte Music grew in a linear manner, unlike Flipkart's physical goods business, which was growing exponentially, month-on-month. Flyte, with low revenues and low growth, remained a low priority business, and it never got the…

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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