Russia’s State Duma has approved a law on the regulation of audiovisual internet services in its third reading that could have a major bearing on Netflix’s expansion in the country.
Kommersant reports that the regulator Roskomnadzor will keep records of such services by analysing their audiences. If their audience share is over 50% Russian they will not be restricted by limits on foreign capital. Otherwise, foreign companies will only be allowed to hold a maximum stake of 20% in the services, or apply for permission to exceed this limit.
Previously, it had been planned to introduce a 20% across-the-board cap on foreign ownership.
Significantly, if Netflix does not reach 100,000 Russian users a month it will not be covered by these regulations. Once it exceeds this number, it will have to negotiate with the Russian authorities or find a local partner.
Late last week it was reported by Vedomosti that Alexander Zharov, the head of Roskomnadzor, had said that Netflix is already looking for potential Russian partners. However, he refused to indulge any details, citing them as a “commercial secret”.
Zharov nevertheless revealed that official consultations with Netflix had not yet developed and it had been a long time since the company had said it would comply with the laws of the Russian Federation, which it now appears to be doing.
