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Want to make a killing selling digital media on the Net? Well, here are a few ideas to get you started.
A transition from offline brick ‘n’ mortar to online virtual retail stores was bound to happen as the digital age progressed. This shift required innovative and legal business models to sell digital media online. But, as in many cases, this is an area where business models that have proven their worth in the West cannot be transplanted here on an ‘as is’ or ‘readymade’ basis. The psyche of the Indian consumer has to be factored in too.
Apple’s Microsoft-style iTunes
For instance, Apple’s iTunes, which makes outright sales of digital media protected by digital rights management (DRM), was considered a breakaway yet very successful business model vis-à-vis, say, Napster’s subscription rental model that allowed unlimited, legal downloads of digital media unprotected by DRM.
Nevertheless, as Ajay Tripathi, business director, Id8labs points out: “Apple thought that it was very smart by forcing people to use only iTunes for syncing music to their iPods. It thought people would get addicted to iTunes and thus, eventually, purchase songs from its library. I perceive this launch as a typical Microsoft-style strategy. But what happened? Social application developers proved to be even smarter by creating applications similar to iTunes that could be accessed by the iPod! Besides offering the same functions and facilities as iTunes, these applications also allow the editing of the file and folder structure of the devices.”
Dealing with the Indian mindset
In India, Tripathi observes that an online seller of digital media would have to come up with especially innovative solutions, since its mass consumers are still diffident about the concept of e-commerce. He elucidates the consumers' viewpoint: “When it comes to digital content, the target audience would not be inspired to pay even Rs 10 for a song, when it knows that it can get an entire DVD filled with 800+ MP3 songs from a roadside shop for a mere Rs 100. Indian users are aware of torrents and peer-to-peer (P2P) software that allow them to download entire movies for free.”
The bottom line is that Indian consumers must see a cost benefit in whatever they purchase—legality be damned in the process—unlike in the US, where time and convenience play a major role in influencing a purchase decision.
For these reasons, Tripathi seeks inspiration from the likes of Google, Yahoo! and Facebook to formulate an innovative and legal business model that would work for Indian online sellers of digital media. He points out that these sites have pumped time, effort and money into creating a digital services platform and yet are able to offer the service (search, mail and social activities/games/groups, respectively) to users, for free. This is because the sites seek compensation from the brands that use these platforms to reach out to their consumers in a cost-effective and precise manner.