NoD: Russian Internet Booming

The Russian digital content market reached US$1.7 billion in 2006, a consulting company J'Son & Partners said in recent report (Russian Digital Market Report 2005-2010) based on research conducted in the last quarter of 2006. The company predicts compound annual growth rate (CAGR) of 29 percent and market volume reaching $4.8 billion by 2010.

According to J&P, the growth of content market is driven by the double-digit growth of broadband and Internet, retail development with more and more stores selling digital content, strong growth of digital pay-TV and the high sales in 2006 (more than 50 million units) of digital devices including VAS-enabled handsets, mp3-players, consoles and consumes electronics devices such as computers, set-top boxes, DVD-players etc.

The year has been succesful for major Russian players. Yandex, the leading Russian search engine, have announced their preliminary financial results for 2006. Revenue is reported to total $72m (USD), more than double that reported for 2005.

The Public Opinion Foundation estimated that Internet penetration in Russia increased to 26 million people by year end, placing it ahead of Italy and France among European countries.

Why it is important: one of the fastest growing sectors, where Russia still has a chance for international leadership.