This is an important and at the same time confusing time for the online video market in Russia.
The country is currently in the process of enacting new legislation that will have a direct impact on its small but growing OTT sector, with the main players Ivi, Okko and Megogo likely to be the hardest hit. Among the more controversial elements of the proposed new law is a 20% foreign ownership limit, already enforced in the wider broadcast industry.
Earlier this week it was reported that the legislation might also apply to YouTube. This has since been denied by the Ministry of Communications, regulator Roskomnadzor and indeed the MKS, which drafted the proposed law. However, it was also reported that in its current version it could apply to iTunes and Google Play.
The proposed law is currently with the State Duma and the most recent news that we have is that it won’t be considered until the spring session, which begins in January 2017. However, one important concession that has already been made is the postponement of the date it would come into effect by three months to June 1 next year.
MKS brings together established industry players, including leading telcos and broadcasters, who some argue have been unsucessful to date in launching their own on demand services. It is my no means a united grouping, with Gazprom Media and CTC Media apparently pushing the strongest amid concerns of the impact Netflix could eventually have on the Russian market.
This all comes against the backdrop of a new report by Digital TV Research which forecasts that by 2021 Russia will account for half of all SVOD subscribers in Eastern Europe. Furthermore, as is the case now, it will also be home to most of its leading on demand services.
My view is that while these forecasts are likely to prove correct, Russia’s online video market is also heading for a number of far-reaching changes.
Consolidation and the emergence of services by leading telcos and broadcasters will be at the core of these changes and Netflix may find itself playing an increasingly important role, working with local partners.
