Watch Out Amazon, Flipkart Enters Digital Distribution Space with Mime360 Acquisition

Flipkart, currently one of the largest e-commerce portals in India, has entered the digital distribution space by acquiring a Mumbai-based digital media distribution platform Mime360.

Mime360 distributes digital content like music, movies, and games through its media distribution platform and offers a HTTP-based encryption technology, thereby enabling a fast and secure data delivery. Some of its partners include labels like Saregama, Universal, and music streaming portals like Gaana.com, mYusic, and iMusti.com.

While the financial terms of this acquisition were not disclosed, Flipkart’s co-founder Binny Bansal said that it has acquired both the platform and the team, and the plan is to keep the platform open for all Mime360 customers.

Talking to Medianama about this acquisition, he said:

We’ve acquired them for the team, because they’re strong in both business and technology. That is coupled with their strong domain knowledge, because they’ve been been at it for the last two years. They have strong relationships (in the music business). The digital distribution platform that they’ve built helps us with the time to market.

The Mime360 team will shift to Flipkart’s Bangalore office and Sameer Nigam, CEO of Mime360 will head the latter’s digital distribution business.

Flipkart will use Mime360’s expertise and roll out a DRM-free digital music vertical followed by e-books and games distribution, in possibly an iTunes-like delivery model. While Binny Bansal declined to share any specific timeline for the launch, he said they are already in talks with the labels and potential partners. He also hoped that they complete their digital distribution rollout by end of next year.

This is the second acquisition by Flipkart in last 12 months, following its purchase of the social book discovery platform, WeRead in December 2010.

Our Take

This is a pretty significant move from Flipkart, and if they are able to pull it off, they could be a pretty huge player in this space. Also, Amazon could face a very formidable challenger in the digital content space, when they enter Indian markets early next year.

Letting my imaginations run wild for a moment, I wouldn’t be surprised if Flipkart launches low-cost self-branded tablets and other gadgets as well, which could act as a front-end to its online store and digital services in the future ala Amazon’s Kindle Fire.

[Source: Medianama]