Futuresource: Russian SVOD Market Spend to Increase 1,000% by 2024

Russia’s relatively underdeveloped SVOD market is poised for growth over the next five years — aided in part by government regulation of Netflix and growth of native-born OTT video services.

The SVOD market doubled in size last year to RUB 6.6 billion ($83.5 million), exceeding the digital transactional VOD market for the first time, according to new data from Futuresource Consulting. The London-based research firm forecasts SVOD spending in Russia to increase by 1,000% by 2024.

Despite launching the service in 2016, Netflix Russia continues to struggle gaining subscribers in an unresponsive market. Separate data from Comparitech found Russia didn’t rank among Netflix’s 25 largest markets through June 3o — a glaring statistic considering Costa Rica, the last country on the ranking, had just 264,000 Netflix subs.

Futuresource says Netflix is impeded in part by government legislation limiting the service to 100,000 viewers per day. As a result, homegrown OTT video players are taking command of the streaming landscape, leveraging enormous financial investment and ramping up the competitiveness of the sector. Kinopoisk HD, IVI and Okko are the frontrunners, all of them implementing a range of three different OTT business models, including SVOD, TVOD and ad-supported VOD.

“AVOD has a far more important role to play in Russia than in other territories,” analyst Tara Patel said in a statement. “Leading services such as IVI achieve around half their revenue through advertising.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Patel said AVOD acts as a steppingstone of sorts in OTT video, with users being upsold to SVOD. That’s in stark contrast to most other markets, where consumers supplement SVOD viewing with AVOD.

Digital sales of movies is also a prominent feature on the Russian video landscape. According to Futuresource, TVOD accounts for 74% of the home video market, compared to just 30% in the United Kingdom. This is due to a combination of ownership culture, rising affluence of the middle classes, a negligible physical market and a tightening of piracy control. Popularity of digital sales comes despite DVD and Blu-ray Disc never achieving a significant foothold in Russia because of piracy.

Among the top Russian OTT video services is Kinopoisk HD, developed by Yandex, Russia’s multibillion-dollar search engine. Known as the “Google of Russia,” Yandex also employs an Amazon-like business model, with an ecommerce division and the option to subscribe to a Yandex+ service, which provides users with free shipping and access to KinoPoisk HD, as well as discounts for Yandex Taxis, a partnership with Uber.

“Yandex is built on robust financial foundations, allowing it to invest heavily in its Kinopoisk HD service,” Patel said.

The analyst said Kinopoisk HD was originally an online service providing information about movies and TV  shows. It was acquired by Yandex in 2013, with a 2015 redesign offering access to free ad-supported content via third-party services. The platform now provides paid-for content on a subscription or transactional basis.

“Like its rivals, Kinopoisk HD has been making significant investments in local productions, which are more appealing in Russia than American shows,” Patel said. “Investment in Kinopoisk HD not only captures new subscribers but is also used to prevent churn from Yandex+.”

In terms of consumer spend, IVI is Russia’s largest SVOD service, accounting for almost 50% of all SVOD revenue in the country, according to Futuresource. Backed by one of Russia’s largest commercial banks, Alfa Bank, the SVOD service has been operational since 2010 and began as an AVOD service before diversifying into subscription and transactional offerings. IVI has been successful in transitioning its customers onto paid subscription services, though it still makes most of its content available on AVOD. IVI is also strong on its transactional offerings, hosting “IVI weekends,” where it offers cheap video rentals.

Finally, Okko is the third largest SVOD service in Russia and the leading EST (electronic sellthrough) service, which was the company’s original focus. Okko built its reputation with a premium transactional service before beginning to invest in SVOD. Sberbank, a major state-owned bank, acquired a 46.5% stake in Okko’s holding company and has recently announced preparations for additional investment. As well as providing a significant cash injection, Sberbank is preparing Okko for accelerated growth, aiming to make the multimedia service the largest OTT platform in Russia as soon as in 2021.

Anthem Sports & Entertainment Streams ‘Impact Wrestling’ in Russia

Anthem Sports & Entertainment Oct. 1 announced a partnership with Rutube.List — Russia’s largest ad-supported digital platform — to begin streaming Anthem’s combat sports platform, Fight Network, and pro wrestling promotion Impact Wrestling to the video service.

Fight Network and Impact Wrestling programming will launch in a VOD-style format, presented in both English and Russian. Rutube.List claims 10 million viewers throughout Russia and the Commonwealth of Independent States (CIS), which includes Armenia, Belarus, Moldova and Kazakhstan, among others.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Fight Network features more than 300 hours of live sports, in addition to original programs such as “Retrospective,” “Diary,” “In 60” and “After The Fight,” as well as a roster of classic fights and compilations, and series such as “Boxing World Weekly,” “Total Combat,” “International Judo Federation” and “Impact Wrestling.”

Launched in 2002 as a rival to WWE, Impact Wrestling is set to deliver its biggest event of the year next month, when “Bound For Glory” comes to Nashville, Tenn., on Oct. 24. The global pay-per-view event is available through FITE TV (order now), Box Nation UK, DISH, DirecTV, Vubiquity, Rogers, Bell, Shaw and Sasktel. Also, it is available on InDemand platforms, including Altice, Cox, Spectrum, Verizon Fios and Comcast Xfinity.

“Russia is a true powerhouse for combat sports, bringing the world some of the top fighters in the business and boasting an impressive base of passionate and knowledgeable fans,” Jaime Pollack, chief revenue officer, Fight Media Group, said in a statement.

Roman Maksimov, CEO of Rutube.List, said the Fight Network channel’s portfolio of  classic wrestling matches, main-event fights include authentic analysis.

“The best and critical moments of combat events and comments come from athletes and experts,” Maksimov said.

Netflix Launching Dedicated Russian Service

Netflix has been a global streaming video service since 2015, except in Russia where it offered an international option in English with limited localized content. Now, the SVOD pioneer has partnered with Russia’s National Media Group for a platform featuring local payments options, Russian subtitles and regional movies.

Russian subscribers will have three payment tiers, including a basic plan for R599 ($8), standard plan R799 ($10.74) and R999 for the premium plan R999 ($13.43).

National Media Group calls itself is the largest private media holding in Russia playing an essential role in the development of technology and consumer products in the former USSR. The company also has media deals with Discovery, Sony and Turner, among others.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Almost five years after launching our English language service in Russia, we’re excited to provide a fully Russian service for our members in partnership with NMG,” Netflix said in a media statement.

Olga Plaskina, CEO of NMG, said the 12-year-old company would operate Netflix Russia, launching with about 40 movies, which will be made available across Netflix’s global distribution channels. Russian TV series “Epidemiya” will be made available internationally. In 2019, “Luchshe Chem Lyudi” (“Better Than People”) reportedly became the first Russian TV series released worldwide under the “Netflix Originals” banner.

Follow us on Instagram

Russian Film ‘Evil Boy’ Coming to DVD and Digital Sept. 8 From Well Go

The Russian supernatural horror film Evil Boy will be released on digital and DVD Sept. 8 by Well Go USA Entertainment.

In the film, several years after their son disappears, grieving parents adopt a feral boy who begins to eerily resemble their missing child. While the wife believes they’ve found their son, her husband is certain he died. As strange accidents begin happening around the boy, he suspects they’ve adopted something not entirely human.

Directed by first-time feature filmmaker Olga Gorodetskaya, the film stars Elena Lyadova (Leviathan), Vladimir Vdovichenkov (Leviathan), newcomer Sevastian Bugaev, Evgeniy Tsyganov (The Man Who Surprised Everyone), Anna Ukolova (Leviathan), Konstantin Topolaga (Steel Butterfly) and Roza Khayrullina (The Horde).

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Evil Boy had its international premiere at the 2019 Brussels International Fantastic Film Festival.

The release features an all-new English dub, in addition to its original subtitles.

Russian WWII Drama ‘T-34’ Coming to Disc June 11 From Well Go

Inspired by true events in World War II, the Russian drama T-34 is rolling to DVD and Blu-ray combo pack (plus DVD) June 11 from Well Go USA Entertainment.

Set in 1944, the film follows a courageous group of Russian soldiers, led by young lieutenant Ivushkin, who manage to escape from German captivity in a half destroyed T-34 tank.

T-34 set an all-time record for opening weekend box office in Russia for a Russian-produced film. It stars Alexander Petrov, Viktor Dobronravov, Vinzenz Kiefer and Irina Starshenbaum.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Eastern Europe to Top 26 Million SVOD Subscribers by 2024

Eastern Europe is finally getting the over-the-top video bug.

New data from Digital TV Research says the region will have 26.19 million SVOD subscriptions by 2024; up from 10 million subs at the end of 2018.

Russia will account for 8.77 million subscriptions, with Poland adding 6.32 million. Together, they will account 58% of the region’s total.

Subscribe HERE to FREE Media Play Daily Newsletter!

The report suggests Russia became the SVOD subscription [an SVOD subscriber can have more than one subscription] market leader in 2018 by overtaking Poland. However, it will take until 2023 for Russia to generate greater SVOD revenue than Poland as its subscribers pay lower fees.

By comparison, Netflix will have 8 million subs across 22 Eastern European countries by 2024, double its 2018 result and representing 30% of the regional total.

“The imminent launches of both Disney+ and Apple TV+ will further boost the sector,” principal analyst Simon Murray said in a statement. “We forecast nearly 3 million subscribers for Disney+ by 2024. Apple TV+ will be more modest.”

Hulu Japan, Fox Home Entertainment Partner for Russian Zombie Series

Hulu Japan, 20th Century Fox Home Entertainment Japan and Nippon TV have partnered to distribute Russian Zombie series “The Day After ” on streaming, DVD/Blu-ray Disc and broadcast television.

Twelve episodes of the first season of the 2013 series “Vyzhit Posle” begins streaming Oct. 5, with a packaged-media release by Fox slated for Oct. 6. The series, which is considered Russia’s version of “The Walking Dead,” will be broadcast in Japan beginning Nov. 10.

The series story arc involves a drug company, attempting to create a perfect human race, releases a virus which proves to be deadly. People are dying by the thousands, but 11 young adults who wake up in a building basement with no memory of how they got there, find themselves responsible for determining the future of all mankind.

“We are thrilled to introduce our first acquisition of a Russian series to the audience in Japan,” Kazufumi Nagasawa, chief content officer at Hulu Japan, said in a statement. “We believe ‘The Day After’ has a huge potential in Japan given the popularity of ‘The Walking Dead’ and other zombie dramas here.”

Considered the second-largest home entertainment market globally (IHS Markit), Japan has slowly embraced SVOD. Hulu Japan, which was acquired from Hulu in United States by Nippon TV in 2014, has the second-largest market share in Japan, according to research firm GEM Partners.

Vyacheslav Murugov, CEO of CTC Media, which created the series, said the distribution deal helps establish Russia as a content creator.

“Our global ambitions are to create interesting TV content for people all over the world and to promote Russia as the country where content is born.This event is a huge and important step in our journey,” Murugov said.

 

Britain Expels 23 Russian Diplomats, ‘Russia Today’ Remains on Air – For Now

British Prime Minister Theresa May March 14 expelled 23 Russian diplomats in retaliation for the alleged nerve gas attack earlier this month on a former Russian spy and his daughter at a cemetery in Salisbury. Sergei Skripal and his daughter Yulia remain hospitalized.

The status of RT (formerly “Russia Today”), the 24-hour Putin government-backed TV network broadcasting in the United Kingdom, remains unchanged. Several British politicians have called for banning the network, which features English-language programing on Russia and related cultural, political events.

In response, Russia has threatened to expel all British media should RT be stripped of its operating license in the United Kingdom.

“Not a single British media outlet will work in our country if they shut down ‘Russia Today,’” Russian Foreign Ministry’s Maria Zakharova told the state-run RIA, as reported by Reuters. “No one can go to a parliament of their country and say: I give Russia 24 hours.”

RT’s operating license is controlled by Ofcom, the broadcast regulator in the U.K., which is treating the matter with caution.

The agency said it has written to ANO TV Novosti, holder of RT’s UK broadcast licences, which is financed from the budget of the Russian Federation. It said the letter explained that, should the UK investigating authorities determine that there was an unlawful use of force by the Russian State against the UK, it would consider this relevant to its ongoing duty to be satisfied that RT is fit and proper.

The letter to RT said that Ofcom would carry out “our independent fit and proper assessment” on an expedited basis, and would write to RT again shortly setting out details of its process.

RT, in a statement, said its programing continues to adhere to all established standards and is simply a pawn in a war of words between Russia and the U.K.

“By linking RT to unrelated matters, Ofcom is conflating its role as a broadcasting regulator with matters of state,” RT said.

 

Fox Partners with Snapchat, Twitter for World Cup Soccer

Seeking to further embed social media with live sports, Fox Sports is working with Twitter and Snapchat for this summer’s 2018 FIFA World Cup in Russia.

Twitter will showcase every goal scored from all 64 matches seconds after they occur. Snapchat will produce “Our Stories” video segments featuring behind-the-scenes video from the quadrennial competition taking place June 14 – July 15.

Fos, which paid a reported $400 million for the U.S. broadcast/streaming rights to the World Cup, will produce a daily live show with host Rachel Bonnetta (@rachelbonnetta), streaming on Twitter from Moscow’s Red Square.

Featured guests include Fox Sports’ 2018 FIFA World Cup on-air hots Rob Stone (@RobStoneONFOX), Landon Donovan (@landondonovan), Kate Abdo (@kate_abdo), Alexi Lalas (@AlexiLalas), and Fernando Fiore (@FernandoFiore), among others.

“We’ll immerse fans in the ‘beautiful game’ even further through expert analysis and fun, creative content from Moscow,” Alexis Ginas, SVP of cross-platform solutions, Fox Sports, said in a statement.

Snapchat, which is creating original content for A+E Networks, Discovery, ESPN, NBC Universal and Turner, seeks to replicate exclusive content with “Publisher Story” showcasing the daily “drama” from the international event.

“What makes the tournament so exciting for us is that we are going to be able to deliver our community a perspective of the global game that brings them not only into the roaring stadiums in Russia, but also to those celebrating in cities around the world,” said Ben Schwerin, VP of partnerships at Snap Inc.

While soccer remains the world’s most popular sport, World Cup interest among casual viewers in the United States remains to be seen considering Team USA is not participating for the first time since 1986.