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Digital River Upgrades E-Download Technology

Software content dealer Digital River showed retailers the newest version of its software download technology and voiced its interest in attracting regional retailers that have long since abandoned the software category due to shelf space issues.

Digital River’s newest download technology, displayed at RetailVision, places the entire transaction onto the retailer’s online store, said Greg Wilkes, VP, channel partners. This allows the retailer to book the entire transaction price, while Digital River is paid a commission. In the past a person electronically buying and downloading a software title was transferred to Digital’s site for the transaction phase and the retailer was paid a commission.

Wilkes said the new system is far less confusing to the consumer because there is only one Web site to deal with.

Digital River, which represents about 30,000 titles and acts as the download center for most national computer and office superstore retailers, believes its next area of expansion will be regional retailers.

Wilkes said many have dropped out of the software business to rid themselves of the hassle of dealing with thousands of boxes, which also took up to much floor space. But electronically downloaded software eliminates both of these issues so regional retailers can get back into the business minus the hassles, he said.

“All of the SG&A costs are gone with downloadable software,” Wilkes said.

The huge strides in home penetration that broadband Internet access has made in the past two years is another reason Wilkes is optimistic that more retailers will jump onto the electronic download bandwagon. Since most titles are at the very least 30MB or 40MB in size, acquiring them through a dial-up modem is impractical. These new broadband users should help boost the share electronically downloaded software sales represent in the category from the low single digits to the high single or low double-digit area in the next 12 months, Wilkes said. This should translate to a sales total of about $3 billion by 2005, or twice its current level.