Although independent Russian online video services have seen a significant increase in revenues, most still remain unprofitable.
Quoting TMT Consulting and J’son & Partners, Vedomosti reports that Ivi, the market leader, saw its revenues increase by 45% to R1.06 billion (€14.57 million) in 2015. However, its losses, at R328.9 million, were almost at the same level as a year earlier.
It adds that while Ivi’s CEO Oleg Tumanov said its revenues in 2015 were R1.05 billion, he refused to discuss its profitability.
J’son & Partners put the value of the whole Russian online video market in 2015 at R5.9 billion, while TMT Consulting estimate that the legal video market grew in value by 34% to R3.4 billion in 2015.
Furthermore, online video is one of the fastest growing areas of Russia’s ad market, with revenues growing by 20% to R2 billion in 2015. The remaining R1.4 billion, up 1.5 times on the previous year, came from paid access to content.
While Okko, Russia’s second largest independent online video service, had estimated revenues of R650 million in 2015, Megogo, the number three provider, saw its revenues grow by 62% to R316 million. At the same time, its net loss increased to R31 million.
Vedomosti says that many investors in online video services have been looking to sell their stakes but unable to find buyers. They are also of the view that the market is heading for consolidation.
