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Netflix expected to exit Russia

September 11, 2017 10.53 Europe/London By Chris Dziadul

Although Netflix and Amazon Prime Video should boost the SVOD sector in Central Eastern Europe considerably, the former is likely to leave Russia.

According to Digital TV Research’s The Eastern Europe OTT TV & Video Forecasts report, Netflix will have 3.43 million subscribers in the region in 2022, or three times as many as in 2016.

Commenting on the findings of the report, Simon Murray, principal analyst at Digital TV Research, said: “These numbers may seem modest, but they will be accomplished without any subscribers in Russia. The Russian regulator has recently introduced a 20% foreign ownership equity limit on OTT platforms [with more than 100,000 subscribers]. We believe that this will force Netflix and Amazon Prime Video to abandon their standalone platforms. This is a major blow to their global ambitions.

“Instead, they are likely to license their original content to a local platform. Amediateka already brands itself “home of HBO”, so deals with other platforms are possible. Netflix has already done something similar in China with IQiyi.”

Excluding Russia’s 6.80 million SVOD subscribers by 2022, Netflix will account for 35% of SVOD subscribers in the remaining 21 countries. Amazon Prime Video will contribute a further 12%.

Digital TV Research forecasts that there will be 16.5 million SVOD subscribers in 22 Eastern European countries by 2022, or quadruple the 4 million recorded by at the end of 2016.

SVOD will become the region’s largest OTT revenue source in 2017. SVOD revenues will total $1,300 million by 2022, or 57% of total OTT revenues) – up from $190 million in 2016 (34% of total OTT revenues).

OTT TV episode and movie revenues for 22 Central and East European countries will reach $2.23 billion in 2022; quadruple the $552 million recorded in 2016. Russia will account for 46% of the region’s OTT revenues by 2022, with Poland generating a further 19%.

For more information about the report, see the Broadband TV News webshop.

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Filed Under: Central & East Europe, Editor's Choice, Newsline, Research Tagged With: Amazon Prime, Digital TV Research, Netflix, Russia, Simon Murray Edited: 13 September 2017 11:27

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