Winjit Technologies, a software development and consulting services company, which had diversified into launching cross-platform apps for music labels a few years ago, has introduced a retail outlet based app store called Appadda. Appadda allows retailers to sell mobile applications and content like movies and music, with purchases being made via coupons.
What’s interesting here is that the company is enabling this app store through a WiFi device which will be present at the retail outlet. App Adda has done a pilot in India and is planning to expand the retail outreach across the country. It is also doing a pilot in South Africa with SA Taxi. Excerpts from our conversation with Abhijit Junagade, MD & CEO of Winjit Technologies:
MediaNama: What is AppAdda?
Junagade: AppAdda is a portable app store which allows you to download apps without connecting to the Internet, and pay in cash to the shopkeeper by collecting redeemable coupons.
MediaNama: Is it white labeled or your own branded service?
Junagade: It can work in both ways. AppAdda is our brand and we are aggregating a lot of content. We have done a pilot in India and are expanding it to the rest of the country in the next two months. We have aggregators right from every music company, games from third party game developers, and Bollywood content licensed from content owners. These will be distributed through our platform in places where Internet connectivity is a problem, or bandwidth is expensive or where people don’t want to pay via their credit card.
MediaNama: How do you enable payments?
Junagade: Payment is primarily cash-based. You buy a phone, and the shopkeeper incentivizes you to download apps. Previously, he was getting pirated content for which nobody was getting paid. We allow the shopkeeper to make money out of this. He can sell coupons for which users will get credit, which can be redeemed to buy licensed content. We solve the problem by connecting all of them with an offline mechanism for downloading content. We are also talking to telecom operators to enable operator billing to purchase content.
MediaNama: Do you work with companies ShotFormats and AppsDaily or do you compete with them?
Junagade: Shotformats is different but AppsDaily has a similar model, although they have merchants who connect the phone to a laptop and sideload the applications. Here, we enable the end user to download it at the retail outlet, or when connected to the WiFi device. He can get updates over WiFi as well. In terms of security, we have our own technology on the box. The apps cannot be shared and there is enough encryption with keys on the profiles. It is secure on our device, and the apps that are downloaded are through our app.
MediaNama: Isn’t that too many steps for a user?
Junagade: It is not. The user is prompted to install the app and it gets installed like any other app. That is an app store, and you can download apps, videos and music.
MediaNama: The problem that you’re trying to solve is one of no Internet connectivity. Isn’t that going to change over time?
Junagade: It is, especially with 4G coming in. (However) It is still expensive. 95% of people use prepaid SIM cards and they don’t want to use that credit for data. They want to use it for texts and calling. Very few would want to use a Rs 300 recharge for downloading a 500 MB movie, they would rather buy a pirated CD. If you’re giving that movie in Rs 20 or 30, and the movie owner gets paid, it’s win-win for everybody.
MediaNama: What’s the revenue share?
Junagade: It depends on the content owner. With some we have a revenue share of 70-30, while some are 50-50. This is after we give 30% to the shop owner to sell the content. The store keeper is the main enabler.
MediaNama: Have you paid minimum guarantees?
Junagade: We’ve been successful in not paying minimum guarantees for licensing.
MediaNama: Why did content owners do this?
Junagade: Because of the reach and the platform, as well as the concept. The minimum guarantee is not a healthy model for content owners as well. Even they’ve realised that now. We have Times Music, Universal, Sony Music, and we’re doing a pilot in all the Hard Rock Cafes, where we will have this content with Universal content. We did the Sula Fest in Nasik, where we had Universal content. We also have content from Saregama and TV shows by Star and SAB.
MediaNama: What are your plans for the national retail rollout?
Junagade: We are setting up a distributor network and also talking to distributors to help us do this. We don’t want to squeeze our bandwidth doing that. Our main competency is in doing the product and getting it right. We want to reach nationally within the country in a year’s time.
MediaNama: How do you ensure that the content on the box is updated?
Junagade: The box is connected in the back-end to the cloud, and we push the content through we serves to the boxes. It can store up to 2 TB. We’ve also written our own algorithm which allows us to compress the data so it has a very small footprint. An APK file which is, say, 20 MB, is compressed to around 20% of that, so we can store content. It also uses micro-caching so that if there is some content that is not available locally, and it has to be cached for the first time when the user is downloading, for the first time it will come from our web server, sit on the box and from the second time onwards it will be faster.
MediaNama: What does it take for a retailer to come on board? Does he give you a certain amount up front?
Junagade: During the pilot, we just gave them the boxes and didn’t charge for it. We asked them to buy the coupons and keep an inventory. We also get the money because it’s a prepaid model, and the retailer makes his commission out of it. He is motivated to sell because he will get a cut out of it.
MediaNama: As you roll out, it must be a significant expense to procure the boxes. (Where do you get the money from?)
Junagade: In some places, especially rural places, we would be charging a small deposit to maintain it. Giving the box is one thing, but they also need to be serviced. There could be hardware and software issues that would require service and support.
We’re self funded but we are talking to a few investors for this. AppAdda is a new company formed by Winjit Technologies, which is a 10 year old business with customers in 40 countries. In India, we do apps for almost all the music labels in the country, and we work with them on a revenue share basis.
We are also rolling out App Adda in South Africa, where one of our customers wants do deploy this in taxis called SA Taxi. They’re into taxi financing, and finance around 35,000 taxis, which are essentially 10 seater vans. We’re putting these hotspots in around 100 taxis as a pilot, allowing people to download that and pay cash to the taxi driver for the coupons.
We are banking on such enterprise customers to expand to other markets. We are primarily targeting developing countries where this might be a problem – Latin America, Africa, India. We’ve also had interest from countries like Japan and Australia. We however don’t want to get into western countries where connectivity is good. Also, the bigger challenge that we address is the way we pay, due to which we target people who prefer to pay with cash in developing markets.
Corrigendum: This article previously mentioned AppAdda has content from Hungama but it doesn’t. The article has been modified accordingly.