Young Russians Already Have Cellphones - But They're Buying Tablets. How is that Affecting Global Film Marketing?

The chart above (from Forbes) shows how internet use is exploding in Russia.

And, according to an April 2012 report in the Moscow News: "Almost half of all Internet users [in Russia] (48 percent) are 25- to 45-year olds."

That 25-45 year old slice of the internet population is rapidly becoming the key to marketing a film (around the world and in Russia) because 1) inside this 25-45 demographic you'll find the socially-networked core audience that New World filmmakers must excite and 2) these young adults (the last born in the Old World before web-browsers and the fall of the Iron Curtain) have recently developed a fascination for discovering new content and communicating with each other via tablets.

According to a September 13th, 2013 digitimes press release, the tablet market increased in Russia by 156% in the second quarter of 2013 [as compared to 2012's second quarter].

One of the noteworthy aspects of this sudden surge of interest in tablets in Russia is that Russia is considered a "mature" wireless market.

In other words, wireless connectivity (at least the kind that comes via an old school cellphone, the type that can't access the internet) has become commonplace in Russia.

But the growth in accessing the internet via tablets is very new - and it's rapidly reshaping how young adult city-dwelling Russians receive information and communicate with each other.

Unlike China, where the majority of citizens still haven't used the internet, more than half of all Russians now use the internet at least once a week. Still, until recently, the Russians who were regularly accessing the internet were NOT doing it with a mobile device: Even today, less than half of the mobile devices in Russia are used to go online. So, while the number of wireless subscriptions is mature (i.e., has stopped growing and may even have declined a smidge), there is huge room for growth in Russia's use of the internet on mobile devices.

And in the big cities that's exactly what has begun to happen among Russian consumers age 25-45 - many of whom are getting caught up in a frenzied buying of wirelessly connected tablets.

How many tablets?

The numbers out of Russia for the first half of 2013 translate into 2.6 million tablets sold. And the pace of tablet sales has actually been picking up. In April, May and June of 2013, as many as 600,000 Russians a month have been buying tablets.

And most of these newly tablet-owning Russians were not buying iPads.

The tablets that are currently flying off the shelves in Russia are Android devices - some costing below $US 100.

That doesn't mean that most young Russian's aren't buying name brands.

In Russia in 2013, Samsung has displaced Apple's early lead to become the tablet market leader. Samsung’s share increased to 25% in Russia in the first half of 2013, whereas Apple’s share declined from 34% to 19%.

Why are Samsung tablets (and other less expensive off-brand Android tablets) suddenly so popular in Russia?

Russian operators do not subsidize their phones and tablets. In general, Russian wireless subscribers pay full prices for their phones and tablets up front (such "prepaid" sales account for around 85 percent of the Russian market). And, as tablet sales have spread to the 25-45 year old cohort, the average price for a tablet has been falling - to where the average tablet sold is now approximately 12,500 rubles (approximately $US 380) and headed further down.

With no long term contracts to ease the upfront costs, young Russians are apparently looking for functional affordable devices.

And Samsung and other manufacturers have stepped in to undercut Apple's prices and fill that demand.

And because there are fewer long term contracts for wireless devices in Russia, these 25-45 year old consumers are willing to switch carriers and devices (what the industry calls "churn") at rates that are far higher in Russia than they are in the US.

Another reason for Samsung's success in Russia's tablet market (besides underpricing Apple's cheapest iPad) is that the 25-45 year old consumers apparently want tablets that are compatible with their Android phones. And in Russia, Android phones have captured over 70% of the smartphone market.

Natalia Vinogradova, a research analyst with IDC Russia (speaking to digitimes) sees the ultra-low-end of the market driving continued growth: "Android tablets will post a significant increase in market share in 2013, thanks to the increasing number of tablets using Android OS priced at US$ 100 and less."

Why does this matter to filmmakers?

Tablets are great devices for discovering and sharing film trailers (Vine works exceptionally well as a marketing tool for films on tablets).  And tablets are creating opportunities for all sorts of newly interactive forms of marketing (see my prior blogpost on advertising films on mobile devices).

What should filmmakers do?

We now know that 25-45 year-olds are buying millions of wirelessly connected tablets in Russia: Millions of web-savvy young Russians with brand new devices that are fully capable of playing trailers and offering interactive marketing experiences (e.g., apps that users touch and swipe).

If you're offering your movie for sale in the global market - have you thought about how potential viewers in Russia might discover and share your message?

Isn't it time to take advantage of the tablet revolution... in Russia and around the globe?

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