Interest in the fast-growing Russian digital content market received further confirmation this past Friday with the announcement of a $6.5 million investment by Umart, Russia’s number one online retailer, in Dream Industries, a Moscow-based developer of digital content platforms.
The move came just one week after e-commerce pioneer Ozon acquired a stake in Russia’s e-book leader Litres – which had received a sizeable capital injection a few months before.
Of the $6.5 million investment, $3 million will fuel the expansion of Dream Industries’ e-book platform Bookmate. The company, which has already launched its service in Turkey, plans to penetrate the Scandinavian and Latin American markets later this year.
“While the e-book market is established in the US and UK, in other markets e-book consumption is just starting to gain traction and Bookmate is positioned to harness this rapid growth,” the company stated.
Bookmate, which already offers a Turkish version, has ambitious international expansion plans.
For its investment, Ulmart will gain a digital channel to sell books, marking the site’s first move beyond consumer electronics. Bookmate will be rolled out across Ulmart’s customer base as soon as next month.
Launched in 2010 as a personal online library, Bookmate is now an e-book subscription service with advanced social functions. Available across all mobile and tablet devices, the platform provides new monetization channels for publishers and authors through its partnership with mobile operators, device manufacturers, online retailers and local governments.
The company claims 1.5 million active monthly users in Russia, Ukraine, Kazakhstan and other Russian speaking markets, with a conversion rate of 7% becoming paid subscribers. Its library has over 400,000 books and more than 300 publishing partners globally.
Bookmate is profitable, Jim Glynn of the company’s press service told East-West Digital News. “While we don’t want to go into precise numbers we are very happy with the growth,” he said.
A “new economy” for e-books
In contrast to Amazon, Google Books or iBooks, Bookmate defines itself as an “open platform that facilitates relationships between publishers and their audience.” Its users may discover, follow, recommend, and interact with one another in a variety of ways.
Bookmate believes it has created a “new economy for e-books, pioneering subscription-based reading in some of the most challenging market conditions [and] proving that a vibrant, socially orientated reading service can engage readers and deliver revenues to publishers.”
“Bookmate is optimized for post-piracy markets where the pay-per-download model does not work,” explains Bookmate co-founder Simon Dunlop. “In most non-US markets, readers want unlimited access to books combined with strong social and discovery features available on whichever mobile phone they use. This can only be achieved via subscription. Bookmate has pioneered this model in Russia and is leveraging its experience as it launches in new markets,” he concludes.
Incorporated in the USA, Bookmate has its development team in Moscow and its sales and marketing teams in several locations.
Ulmart’s capital injection will also benefit Dream Industries’ other projects, Glynn told East-West Digital News without providing more details. These projects include music service Zvooq.ru, knowledge sharing platform Theoryandpractice.ru, and a co-working space for startups in central Moscow.
Glynn could not disclose the identity of Bookmate’s shareholders besides Ulmart.
