Digital River has issued a stark warning to UK retailers that millions of pounds will seep out of the domestic market if they fail to wake up to the digital delivery of software.
Speaking to PC Dealer at the RetailVision show, Ian Yarlott, general manager of Digital River's UK operation, admitted that the delivery of software over the internet had not taken off.
He said: 'Nobody in the UK is delivering software over the internet effectively. At the moment, the amount of business being done is peanuts.'
Yarlott added that the first company to jump wholeheartedly into the digital distribution pool stood to make millions and crack the channel's traditional model.
'This will have a devastating effect on the infrastructure of the channel,' he warned.
Yarlott added: 'It's happening in the US and if the UK is not careful, it will find that the profit from this business will go to a .com site, not a .co.uk one. Cyberian Outpost is already doing about 25 per cent of its business outside the US.'
Digital River specialises in the delivery of software over the Web by partnering with retailers' sites. It has already joined with Software Warehouse and announced that a deal had been struck with Simply Computers.
Simply's US parent, Global Direct Mail will also be signing up.
Todd Frostad, director of business development at Digital River, added: 'There is already a move away from conventional distribution. Symantec distributed 70 per cent of its product through conventional means in 1997 - last year that figure flipped, with 70 per cent fulfilled over the Web.'
Jo Wood, marketing manager at Mediagold, said Digital River had been approached by a number of UK retailers. 'There has definitely been a buzz around digital distribution. A lot of interest and business will have been generated at the show.'
Digital River claims to have the world's largest online software database, with 30 000 products.
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