Digital content

Digital content ecosystem

The concept of "digital content" is used as an umbrella term to describe three segments of the multimedia product market:

• production of content in digital format;
• distribution of multimedia products in a digital environment;
• user consumption of content produced and transmitted in digital format.

For distribution companies, online platforms, content stores, as well as for ordinary consumers, digital content is an information, entertainment or gaming product distributed over digital networks or in digital format on physical media, and consumed, recorded and copied without deterioration in quality.

The concept of "digital content" also has other meanings:

• Multimedia content manufacturers associate the term with any digital multimedia product presented in digital format.

• For telecom operators, digital content is a special type of transmitted data that differs in specific requirements for the quality of transmission (for example, broadcast or multicast).

Below is the base ecosystem of both analog and digital content.

Content Delivery and Consumption

The expansion of network bandwidth and data transfer rates on the Internet, as well as the growing popularity of "heavy" media content, significantly affect the structure of both global and Russian traffic.

Internet video streaming and IPTV (including pay TV, VOD services viewed on a PC or TV screen using STB (set top box) will account for the largest share (almost 60% of Internet traffic) in 2015.

Online games, despite the almost annual doubling of traffic in relative terms, will also be significantly less than 1%. The average increase in Internet traffic in the VoIP segment will be 4%, which is significantly less than the average increase in segments.

Changing the traffic structure towards "heavy" content forces players to take into account the transmission features of its individual types, namely, the need to ensure continuity of signal transmission in real time, i.e., the constancy of network delay. This contributes to the development of the CDN (content delivery network) service, which is widely known in the world, but not popular enough in Russia.

Digital Content Access Devices

The most important condition for the growth of the digital content market is the development of the necessary infrastructure. One such factor is the evolution of terminals for content consumption. Along with the advent of new technological solutions, the number of such devices is growing and at the same time their cost to consumers is decreasing. The explosive growth in the penetration of smartphones and tablets contributes to the general "mobilization" of the market.

At the beginning of 2012, the mobile terminal is not considered as a unique channel for content consumption, because the main transport for receiving media is not the technological channels of cellular networks, but the Internet. In fact, the audience of mobile content consumers is pouring into a large audience of digital content consumers online.

In turn, distributors of digital content create multi-platform solutions - resources and services that allow you to access content from all possible devices (smartphones, SmartTV, media centers and PCs). Thus, the user forms a culture of consumption of legal content. The ability to consume current high-quality content through any available device creates motivation for using paid services.

Global Digital Content Market

2019: Internet usage time catches up with TV time

The end of the era of television is near, if not already. The graph shows the number of minutes that people spend on TV and the Internet on average around the world.

2018: The share of video content is significantly increasing in all regions of the world

According to a report Sandvine released at the end of 2018, the traffic structure is changing around the world: the share of video content is significantly increasing in all regions of the world. Video streaming already accounts for more than half of all traffic in, according to an analysis report. Internet Experts data center Xelent looked at how the trend would affect work. DPCs

Sandvine analysts note that streaming video content accounts for 57.69% of incoming and 22.43% of outgoing traffic on the Internet. The largest sources of video traffic remain, BitTorrent,, Netflix YouTube as well as game streaming services and. social networks

According to Xelent experts, the trend is explained, on the one hand, by the increase in network speed: file transfer is becoming faster, which allows users not to download files, but to consume high-resolution video content in live mode. On the other hand, with the development of video surveillance systems, the volume of service video traffic produced by CCTV systems and Internet of Things devices is increasing. All this, in turn, stimulates the development of new storage systems and the increase in network capacity.

The increase in the share of video in world traffic also leads to the fact that broadcasts of major sports competitions began to have a significant impact on the load on networks and the volume of world traffic, Xelent noted. The World Cup in Russia showed that consumer interest in streaming does not depend on the popularity of the site: for example, in most countries during the games of the home team, traffic on the resources of copyright holders exceeded traffic from YouTube. At the same time, if during the game the audience watched streaming content, then during the breaks - they revised the previously filmed material and/or uploaded videos.

In addition, the regional specifics of world traffic remain. In particular, in the United States, Netflix (19.1%) became the provider of traffic No. 1, in the EMEA region - YouTube (16.1%). In the Asia-Pacific region, video from local providers accounts for the most downloads, while YouTube and Netflix occupy only just over 6% of traffic each.

According to Xelent, trends also differ: while in the United States connected fitness services are "gaining momentum" (classes with video broadcasting over the network), in other parts of the world this trend does not appear. The difference in preferences by region shows that the Internet should not be perceived as a "single whole" - the isolation of different regions is very significant, analysts at the company say.

The report confirms two trends: firstly, predictions about the impact on this growth of video traffic are fully realized. This means that data centers will be even more in demand, and in the near future our main customers will be IT service companies and content producers. This will have a positive impact on the industry: these customers traditionally have a high level of understanding and efficient consumption of data center services, and they require a wide range of services from data centers. Customers are becoming more professional and demanding, forcing data centers to develop their infrastructure, range of services and functionality. And this is the second trend that we will observe in the coming years, - concluded Ilya Rogov, marketing director of the Xelent data center.

2011

The share of video content in the total revenue structure amounted to 72%

Over the past few years (2009-2011), the digital content market has shown stable growth while maintaining the structure of income distribution by types of content. Unconditional leadership in the digital content market belongs to the video segment, which includes:

• online video,
• digital television and
• VOD services.

Its share in the total income structure in 2011 was 72%.

The next most important are the segments of mobile content and online games, which account for 14% and 10% of the market, respectively.

Audio (3%) and e-book revenues (1%) hold a negligible market share to date.

The world leader in terms of digital content market in 2011 is the United States. European, Asian countries and Russia follow by a wide margin. The Southeast Asian market is characterized by a high growth rate due to the level of penetration of broadband and mobile Internet. As a result of the dynamic development of the market, the state faces the task of creating and maintaining the necessary infrastructure, which includes the development of legal services, improving the quality of content consumption, changes in legislation, etc.

Western European countries are characterized by moderate but at the same time stable growth rates. The UK digital content market grew by 15% in 2011, with segments such as audio and video content seeing a decline in physical (media) content sales each year, leading to structural shifts towards an increased share of digital sales.

In Russia, a significant part of the market is mobile content. First of all, this fact is explained by the traditionally digital nature of the distribution of content for mobile devices and the relatively short history of monetization of other types of content.

Digital Audio Content Market Growth by 7%

According to a study by J'son & Partners Consulting, in 2011, the global digital audio content market grew by 7% to 6.3 billion. USD. The countries considered in the study - the USA, Japan, South Korea, Great Britain - account for about 70% of the global audio content market. Russia's share in the global market is insignificant and amounts to less than 1%.

Mobile phone audio content sales accounted for about 68% of the total audio content market in the world. The dominance of digital audio content sales through mobile networks is due to the convenience of using audio files on mobile phones, which have firmly replaced audio players in the mind of the subscriber, and now it is almost impossible to meet a mobile terminal without support for playing music files.

At the same time, it can already be noted that there are trends towards the growth of the segment of online sales of audio content in the world, since the share of this channel increased by 2% in 2011.

The greatest contribution to the development of the digital sales market for audio content via the Internet was made by the Apple iTunes multimedia service, through which more than 10 billion units of audio files have been sold since 2003. In 2011, Apple iTunes accounted for 70% of all music downloads in the United States. It is natural that the digital sales market for audio content is the most developed in those countries in which Apple's service is available. Apple's main competitors in the digital audio content market are Amazon, 7digital, HMV and Tesco.

Market in Russia

2023: Market growth by 28% to RUB 119.7 bln

The Russian Association of Electronic Communications (RAEK) estimated the volume of the domestic digital content market at 119.7 billion rubles at the end of 2023. This is 28% higher than a year ago. The organization published such figures on December 13, 2023.

According to Kommersant, citing RAEK materials, the Russian digital content market, which sank 39% in 2022, showed growth a year later due to several factors, including:

The volume of the Russian digital content market in 2023 increased by 28%

• an increase in the number of ecosystem users;
• attracting an audience with exclusive content;
• a surge in interest in Russian production;
• state support for manufacturers of media products.

According to analysts of the TMT Consulting agency, in the 1 half of 2023, the revenues of the Russian market for legal VoD services offering professional video content for viewing increased by 30% and amounted to 42.3 billion rubles.

At the same time, RAEK, summing up the results of 2023, noted that the audience of pirated resources is growing, as are the number of resources themselves, 80% of the online games market is in the gray zone, and copyright content is affected by the law on labeling and content regulation. 

According to RAEK Director Sergei Grebennikov, the e-commerce segment is still the driver of the growth of the Internet industry, which will also grow more than predicted in May. In 2023, the volume of the e-commerce segment will increase by 35% compared to 2022 and amount to 15.4 trillion rubles, the association said on December 13, 2023.

In May [2023], we gave more conservative forecasts, but based on the results of the first three quarters, we revised the dynamics forecasts for the segments of Internet advertising and marketing, and digital content, - said Grebennikov.[1]

2022: Market volume cut by 52% to RUB 73.6 billion

The volume of the Russian digital content market in 2022 decreased by 52% compared to 2021 and amounted to 73.6 billion rubles. Such data in May 2023 led to the Russian Association of Electronic Communications (RAEC).

According to Kommersant, citing RAEK materials, Russians' spending on online games in 2022 decreased by 78% (to 21.8 billion rubles), on online music - by 40% (to 7.1 billion rubles). At the same time, the online video segment grew (by 7%, to 33.3 billion rubles), and the category of digital books did not show growth in 2022 (11.3 billion rubles).

The volume of the Russian digital content market in 2022 decreased by 52%

One of the factors in the fall of the game market was that almost 80% of the game content was foreign, which turned out to be unavailable, since there is no license to distribute it in Russia.

The departure of foreign players, as well as the regulatory factor, influenced. For the marketing and advertising segment, these are new labeling requirements, and for the digital content segment, initiatives aimed at regulating content, "said RAEK Director Sergei Grebennikov.

RAEK predicts that in 2023 the segment of digital content in Runet will grow by 7%. This will be influenced by the following factors: growing interest in Russian content, entering the content market from Asian countries, and an increase in the number of ecosystem users. In addition, the association suggests that state support for content producers and regulatory initiatives (regulation of content and recommendation services) will also help the segment grow in 2023.

According to the Center for Strategic Research and ANO Dialogue, revenue from subscriptions to digital content in Russia in 2022 amounted to 180 billion rubles. Revenue from multi-subscriptions in Russia in 2022 amounted to 59.4 billion rubles, the report specifies. The annual revenue from multi-subscriptions amounted to 199 rubles per month, the number of owners of such subscriptions amounted to 24.9 million people.

22.6 million users were subscribed to music services, revenue for 2022 amounted to 7 billion rubles, for online cinemas - 11 million people, revenue - 40.3 billion rubles. 7.3 million were subscribed to cloud services, annual revenue amounted to 8.3 billion rubles, 330 thousand people were subscribed to subscriptions of services with e-books, revenue - 10.5 billion rubles. Annual revenue from subscriptions to, according to the software report, amounted to 2.8 billion rubles, the size of the audience of subscriptions to software in Russia is not indicated in the report.^[2]

2017

Data from Dentsu Aegis Network Russia and PwC

The annual volume of the content market in Russia amounted to 156.9 billion rubles. The main share - 70 billion rubles. - falls on film content: distribution of films, distribution in cinemas and on digital platforms. Such data follow from a study conducted by Dentsu Aegis Network Russia and PwC, AdIndex reports^[3].

Most of the income falls on the film content segment (revenue from film distribution and distribution, including digital, was taken into account) - 70 billion rubles, in second place is television content - 50 billion rubles. (advertising revenues are excluded). This is followed by: content on social networks - 13 billion rubles. (advertising revenues are also included), sports content (purchase of rights to broadcast sports events) - 7.5 billion rubles. The last positions were taken by "new broadcasters" (cable TV, smart TV, etc.) - 5 billion rubles, music content (income from streaming services such as Yandex.Music and income from the sale of tickets for concerts) - 4.8 billion rubles, content brands - 3.6 billion rubles. The e-sports segment closes the list with a volume of 3 billion rubles. (income from streaming, broadcasts, ticket sales for events, etc.).

RAEC data

RUB 62.9 billion in 2016. Growth in 2017 + 12% ^[4]

2013

Data from J'son & Partners Consulting

The forecast for 2013 in the digital audio content market in Russia is not expected to grow actively (J'son & Partners Consulting, April 2012). The volume of sales of audio content via the Internet by 2013 will not exceed 3 million USD with existing barriers, and the outlook is estimated as moderately optimistic.

RAEC assessment

In the segment of digital content, most of it is occupied by the gaming market: its volume amounted to 35 billion rubles, in 2013 it grew by 22%. The researchers predicted the same growth in the fall of 2014 and for 2014. The segment of music, books, media and video amounted to 5.8 billion rubles. Researchers believe that the digital book and media market will grow by 65% in 2014. Data from October 2014.

2011

J'son & Partners Consulting: 207% sales growth

According to J'son & Partners Consulting estimates, according to the results of 2010, the volume of music sales via the Internet increased by 207% compared to 2009, the main reason for this growth was the launch of content stores from operators.

The largest participant in the mobile audio content market Russia in the first half of 2011 is a telecom operator, and MTS MTS was the largest participant in the Russian digital music distribution market via the Internet in the first half of 2011 through the project Omlet.ru.

The closest competitor of the Omlet.ru is the Trava.ru project from the telecom operator Megafon. However, business sales of audio content are not highly profitable. At the end of 2011, MTS decided to abandon the "Music" section on the Omlet.ru portal, which in 2012 will entail a decrease in sales in this segment.

In the general structure of the Russian digital sales market for audio content, the main share (99%) is occupied by sales of mobile content. According to J'son & Partners Consulting estimates, music sales through mobile channels increased by 10% in 2011 compared to 2010.

J'son & Partners Consulting highlights the following drivers and barriers to this market.

Barriers:

• The availability of a large number of musical compositions in open sources limits the need for the audience to legally use it.
• Low purchasing power compared to North America and Western Europe - the largest markets for digital distribution of audio content.
• The cost of music distribution rights among the largest music majors remains high for the Russian market.
• Despite the growing popularity of payments on the Internet, the problem of low penetration of bank cards remains, as well as the fears of Russians to use them to pay for online purchases.

Drivers:

• Growth of both fixed and mobile Internet users in Russia.
• Increasing the availability of mobile devices on Android, iOS, Windows Phone platforms has a positive impact on the development of mobile services, namely specialized applications for accessing music in the phone.
• Positive trends in the politics of music majors. Major labels are ready to discuss new models of collaboration and music sales.
• The growing popularity of the use of electronic payment systems and the growth of the volume of payments over the Internet in general.

Content licensing

In April 2012, it became known that the text of the new edition of the Civil Code (GC) did not include amendments prepared by the working group under the Ministry of Communications. In particular, we are talking about articles 1228, 1233 and 1236 of the fourth part of the Civil Code, which were supposed to legalize free licenses. President Medvedev actively advocated the introduction of such licenses in Russia, who submitted the draft Civil Code to the State Duma on April 3, 2012. This project can be adopted "in record time" - even before Putin's inauguration (May 7, 2012), a source close to the working group that participated in the development of amendments to the Civil Code heard. The amendments are being adopted in a hurry, the Vedomosti interlocutor confirmed^[5] in the leadership of the Duma, although he is not sure that all three readings will be held before May 7.

President Medvedev caught fire with the idea of ​ ​ free licenses in 2011, meeting with representatives of the Internet community, and instructed the Minister of Communications and Mass Media Igor Shchegolev to prepare appropriate amendments. The revision of amendments to the Civil Code submitted to the Duma does not fully ensure the validity of free licenses in Russia, the representative of the Ministry of Telecom and Mass Communications admits.

This edition does not reflect the results of one and a half years of work of working groups created on behalf of the president, says Irina Levova, an analyst at the Russian Association of Electronic Communications (RAEC, unites 86 Internet companies, including Google, VK (formerly Mail.ru Group), Ozon, RBC, Webmoney). The current version of the Civil Code spelled out the five-year validity period of the license for the use of works by default (if the author himself did not indicate it), which should also be posted on the Rospatent website . But when the term expires, many who downloaded the work can be retrained as pirates. Therefore, according to Levova, the validity of the license does not need to be limited. There should be no binding of the license to Russia, because the Internet is cross-border. RAEK proposes to introduce free licenses not only for multimedia, but also for scientific works, works of art and objects of related rights, as well as provide for mechanisms for renouncing exclusive rights at the request of the author and transferring works to the public domain.

Amendments regarding free licenses have already been agreed and will be made to the new edition of the Civil Code in the second reading, promises presidential aide Arkady Dvorkovich. The Civil Code is a large document, it is unlikely that it can be adopted very quickly, said Pavel Krasheninnikov, chairman of the State Duma Committee on Legislation. All amendments to the Civil Code will be considered, he promises.

Notes