With the Indian digital music market at the threshold of expansion, a large number of music services were looking to enter the space and make its presence felt. Amongst these was Flipkart’s digital music store Flyte, which attained dominance in the market by achieving 600,000 downloads within five months of its launch in February 2012.
The company recently celebrated one year of its existence, and is steadily witnessing a surging growth in all aspects. In a conversation with Radioandmusic.com’s Chandni Mathur, Flipkart digital VP Sameer Nigam highlights the ambitious growth plans of the service in its second year.
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How has the journey been?
We started Flyte a year back with a single minded objective of seeding the habit of legal digital music consumption in India and to a considerable extent we have been able to achieve that. The market for legal digital music is increasing at a steady pace and the kind of traction we have seen with Flyte mp3 justifies that. We believe that within the years to come, ‘digital’ will become a way of life in India and we are happy to facilitate that. The last one year has been very insightful in terms of understanding the market dynamics, and that has helped us channelize our offerings to customers in a way that best suits their preferences.
Highlight some of your milestones in this one year? What were the learning lessons?
Our biggest milestone was when we hit a million downloads within six months. Besides, the Flyte mp3 iOS app had been rated as the number one app on the iPhone app store, and the Flyte mp3 android app was in the top 15 trending apps in Google Play Store for the music category during the first anniversary promotions. Being in that position has been very encouraging and has spurred us to come up with improvements and innovations.
One of our key assumptions has been justified – that there is a market for legal music downloads in India. Consumers are willing to pay for their digital content and they just need easily accessible means to do so.
One of our biggest learning has been the very wide variety of music that consumers have bought from us. Our heavy focus on selection has been validated. We had no clue there was such a large appetite for devotional music amongst the internet audience, and today it’s amongst our top three performing genres.
Tell us about the growth ?
Flyte mp3 has witnessed a steady growth in terms of the number of downloads each month. In the first six months, the total number of downloads stood at 1 million. At the end of one year, the number currently stands at 2.5 million.
In terms of the number of tracks available, we launched Flyte mp3 with a repertoire of 1 million songs and in the last 12 months have added around 3 million tracks. Besides, we have also got on-board close to 150 labels and aggregators since the time of the launch.
What is your current user base like?
At present our user base is at 150,000 and we see it growing steadily.
What kind of revenue growth did you witness?
As a company policy, we do not comment on revenue figures. But the figures have been promising, showing a steady growth month on month.
With competition steadily increasing, is increasing the pricing of songs an option?
Most of the songs, close to around 60 per cent of the total catalogue, are available at Rs 5, while the rest ranges anywhere between Rs 9 to Rs 15. Our focus right now is to continue to seed the habit of legal digital music consumption in India and ensure that we deliver on customer expectations. There is a lot that needs to be done on this front to gain customer loyalty. Competitive pricing is not the focus at this point of time.
What are the strategies to stay ahead in the booming digital race?
Deepening our content offering and coming up with hard-to-resist promotions and offers will also be a part of the roadmap. Our investments in the future are going to be on aggressively expanding the current catalogue of music, both vertically and horizontally.
How has social media helped in driving traffic?
In the last one year, effective social media engagement coupled with word of mouth marketing, fuelled by the high consumer satisfaction has played a pivotal role in creating visibility for Flyte and its services. This year, we intend to have a deeper engagement with our current and prospective target audience, both online and offline.
You had earlier stated that Flyte was expanding its international catalogue by tie-ups with the likes of Orchard. What is happening on that front?
International music has contributed to about 30 per cent of our sales on Flyte mp3 and this has essentially been possible because of our partnership with a spectrum of international labels. We have three international partners at present which include Orchard, Believe Digital and Rebeat. This has helped us add almost 5 million tracks to our catalogue making us the largest aggregator of international music in India.
What are your future plans?
Since the day we launched Flyte, our focus has been on offering a compelling user experience to consumers coupled with a rich selection of digital content. The first year on Flyte essentially went on ensuring that this two-pronged approach stayed on course.
While we will continue to focus on these areas for the coming year, we will also be improving the online payment systems. The Indian online payment system requires a two point authentication for any purchase made, but out in the west, ‘one click’ payment system has helped consumers shop online at ease. Without the ‘one click’ solution available in India yet, the need to solve problems associated with the payment system is more than ever. We have partially solved this problem by introducing the ‘Flyte Wallet’ where a consumer can load a certain sum of money at one go and can redeem it at any point of time a purchase is made. This essentially is solving the requirement of having to enter the card/account details each time before making a purchase.
While a good percentage of consumers have leveraged this service for their advantage, most consumers are still wary of keeping their money on a website. And given that the price of transaction could be as low as Rs 5, using card or account details to shop each time could be a big hassle. There is an imperative need to solve this issue and our focus this year will be on getting this right and providing consumers a smoother payment experience.
Throw light upon some challenges which digital music services face?
A major problem that Indian content sites often face is in getting the search terms right. Indian names and titles, when written in English, often have a variety of spellings. This often leads to a mismatch between consumer searches and site listings. We are working on solutions to that end as well as it can be an obstacle in the path to growth. Apart from that, technology also plays a crucial role in getting the user experience right and we are looking forward to investing on that front as well. We will also be working on innovations on the site and our apps.
What are the barriers you foresee in providing legal music to consumers? Has Flyte been successful some way in curbing piracy?
We believe there are two ways to check piracy. One is enforcing the law, and the other is to give consumers access to affordable digital content. While the former is something that is not in our hands, there is immense potential in curbing piracy with the latter. With Flyte, we have been able to facilitate a convenient way to consume digital music and the prices we offer are found to be very attractive for our consumers. The traction we have seen in terms of the number of downloads is testament to the fact that we have been able to curb piracy to a considerable extent. We expect legal digital music consumption in India to only go up, thus helping curb piracy.
The other problem in offering digital music online is that licensing negotiations are a complex process revolving largely around minimum guarantee (MG) discussions. As the online ecosystem starts exploding, it is important for the music industry to start engaging with online music services and retailers as long-term partners and work towards jointly building the digital music market.
Where do you see the future of digital music streaming in India?
Free music streaming is a compelling offering and will continue to attract its own set of audience. However, the sustainability of an advertising supported model in the Indian music market remains a question mark.
Do you think India has progressed in developing a paid ecosystem for music?
The paid ecosystem for music in the telco environment has been around for a decade and is a mature industry. The fact that people want to own their music is well documented given the popularity of music being consumed from free, legal and other alternate channels. The opportunity ahead for all of us in India is to make the payment methods for music convenient for the user and expand penetration of the same.
Has the music industry flourished and grown in numbers over the years? Being a digital expert, where do you see the future of digital music in India five years down the line?
According to the recent Ficci-KPMG report, digital sales have overtaken physical music sales in the Indian industry. Currently around 55-60 per cent of music sale happens through the digital route. While physical music has been on the decline in the last two years, digital music has seen a significant jump of 24 per cent year-on-year. The report estimates that the digital music industry will grow at an expected CAGR of 22 per cent till 2016.
The overall music industry has therefore, not flourished due to the dip in the physical format. But we should take an optimistic view of the fact that this may well be balanced out by the digital music industry which is set to take off in a big way in the coming years.
