The company points to piracy and problems of micro-payments as reasons for the closure
India’s largest e-commerce firm Flipkart.com is pulling the plug on its digital music store, nearly a year after the platform was set up and close to six months after Apple’s music store iTunes entered the Indian market.
The company had launched the music platform last February, after acquiring Mumbai-based digital content platform Mime360, which managed music streaming for labels such as Saregama and Universal Music.
The online store allowed users to purchase individual songs or entire albums from a collection that contained over a million tracks. It will, however, still continue to sell e-books.
“It’s just another sign of over diversification. The platform was initially meant to be a digital content platform. The overall e-commerce business, which is already experiencing distress, could not sustain Flyte music,” said a source with direct knowledge of the matter. The store will shut down by mid-June.
The company, however, points to piracy and problems of micro-payments as reasons for the closure.
Confirming the development, Mekin Maheshwari, Head, Digital Media and Payments, told The Hindu: “ We have built a massive digital music catalogue . However, we have realized that this industry will not reach scale unless issues such as piracy and easy micro-payments etc. are solved. It makes sense to take a step back from Flyte MP3s and revisit the digital music market opportunity at a later stage.”
CFO from Tiger Global
Meanwhile, private equity investor Tiger Global appears to be moving in to save its investment, with Flipkart appointing the hedge fund’s Director of Finance, Portfolio Companies, as its interim CFO. The e-tailer will continue its search for a new, permanent CFO while Kalyan Krishnamurthy takes over.
The position has been vacant for the last two months after Karandeep Singh, former CFO of Flipkart, left the company around the time the enforcement directorate was probing the firm for a possible violation of foreign direct investment norms. Tiger Global, along with other investors, has pumped over $100 million in funding into Flipkart over the last thee years.