M.Video, a leading Russian consumer electronics retailer, announced last week its intention to switch from physical to digital distribution of its range of software, music and movies. The company believes that it makes less commercial sense to sell software, music and movies ‘in boxes’, when it is easier for consumers to simply download them.
M.Video will sell digital content through its website as well as through dedicated terminals in stores located more than in 100 cities in Russia. All digital online sales are slated to begin in few months and will replace the current system where online buyers have to wait for delivery of CDs and DVDs from the stores. M.Video expects that its full range of content will be available for digital sales by the end of 2013 after negotiations with copyright holders.
Eldorado, another major electronics retailer, introduced digital distribution for software products in 2010 by setting up special counters in its retail outlets. In their turn, several Russian mobile retailers, including Euroset and Sony, have signed agreements last month for the digital only distribution of Microsoft software in their shops.
The push to distribute digital content online in Russia has developed considerably over the last few years. Just in recent months, Omlet.ru – an online content library owned by leading mobile operator MTS – announced important agreements with major Western content providers. Gazprom Media and its subsidiary TNT, a Russian television channel, have also launched Now.ru, a paid video-content website. Zoomby.ru, an aggregator of broadcast quality video content, received funds from major Russian investors. Leading mobile phone retailer Svyaznoy announced this summer it would launch its own music portal.
Recent market analysis has revealed a trend towards decreasing sales of physical content in Russia. According to a report from PricewaterhouseCoopers, sales of in-box video dropped by 7.4% year-on-year in 2010 and in-box music sales dropped by 12.4%. Digital music sales, however, grew by 33.9% in the same period.
Source: Kommersant
