What can we expect from Russian digital services?

Publication date: 11 Jan 2023

The Russian authorities have seriously taken up the development of domestic digital services: by 2030, their audience is expected to grow several times over.  This is stated in the New System-Wide Software roadmap adopted by the Russian government in December 2022.

Along with the New System-Wide Software, the government commission for digital development also approved another software roadmap called the New Industrial Software. Around 200 companies, including United Shipbuilding Corporation, Kalashnikov, Sheremetyevo Airport, Transmashholding, Rusagro, M.Video, NOVATEK, Lukoil and Severstal, were involved in developing the maps.  Roadmap projects aimed at import substitution of foreign software worth over 200 billion roubles will be implemented using the companies’ own funds, including agreements with the government to create conditions to ensure guaranteed demand for the products. The remaining projects will involve loans (about 20 billion roubles) and grants (over 23 billion roubles). How much of the planned 243 billion roubles will be spent on developing and increasing the audience of Russian services, messengers and social networks is still unknown.

The policymakers are confident that the Russian communications platforms (social networks and messengers) have enormous potential and are expected to grow rapidly in the next few years. Over the following 7 years, the number of users should increase by about 25%, i.e., up to 120 million (compared with 2022).

RuTube, a video hosting site owned by Gazprom Media, is set to nearly double its audience, reaching 48 million users (last year, its number was estimated at 25 million). The Yappy short video service, being part of the same holding company, can increase its audience by almost 4.5 times and reach 18.5 million subscribers. Gazprom Media specified that they “are doing everything possible to fulfil the plans”, namely “we are strengthening the infrastructure and actively working on the improvement of the functionality of our platforms”.

  • For instance, according to the mobile operator Yota, in 2022 the monthly volume of traffic to Russian services has almost doubled whereas the number of users has jumped by 20%. Among the new platforms, the maximum increase in audience was observed: ЯRUS saw a 2.7-fold rise in audience and a 5.4-fold increase in traffic. The number of Yappy users exceeded 152%, resulting in a 14-fold traffic growth. TamTam messenger ranked second after Telegram in terms of users and traffic, up 24.57% and 98.43%, respectively. Rutube video hosting also demonstrated positive dynamics: its audience almost doubled and traffic volumes increased by 526%.

Experts interviewed by Izvestia newspaper have different opinions about achieving the announced results. 

“The indicators are quite achievable – first of all, we are talking about the VK messenger, as there are no other worthy Russian competitors to Western software,” said Vladimir Zykov, director of the Association of Professional Users of Social Networks and Messengers.  He explained that there is currently a tendency for rivalry to emerge between VKontakte and Telegram.  Both companies are striving to make their services more user-friendly and fill them with a great number of extra services. Meanwhile, VK has an important competitive advantage due to its deepening integration with the portal “State Services”.

  • TGStat analysts have calculated how the number of Russian Telegram channels grew in 2022. The “News and media” category grew the most, by 55%. Among the leaders were “Blogs”, “Medicine”, “Games”, “Fashion and Beauty” and “Law”. The least number of new channels appeared in the sections “Bookmaking”, “Cryptocurrencies”, “Sports” and “Marketing and Advertising”. The reason for this is that, as of 1 January 2022, these categories were already in the “top” positions.  Sensor Tower named Telegram as the fastest-growing app in terms of downloads among all messengers (from 2019 to 2022). France, Turkey and Russia are among the countries where Telegram is most popular.

“This will be challenging because of the competition that already exists between services and the one that will emerge in the future as new ones appear. It should not be forgotten about the rivalry with foreign services,” said Karen Ghazaryan, director of the Internet Research Institute.

A possible ban on the use of recommendation algorithms could also be a deterrent. They make it possible, for example, for short video services like TikTok to quickly attract users because without these algorithms, bloggers will start switching to other platforms.

The development of certain projects by attracting administrative resources would not be a justified step, experts say. Most importantly, users should be able to choose which service to use on their own!

 

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