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Revenues of Russian video services for the previous year amounted to RUR 8.5 billion

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Russian online cinemas rank first in terms of the amount of profit.

Legal online cinemas of Russia increased their revenues up to RUR 8.5 billion (14, 86%) over the past year, while in 2014 the market  amounted to RUR 7.4 billion. This data is presented in the research results of the company J’son & Partners Consulting (J&P).
But  globally the revenues of Russian companies dropped by 0.5%. According to analysts, such indicators are determined by the rapid growth of the world market and the depreciation of the Russian currency.
However, the J&P believes that the market of Russian video services will almost double by 2019, reaching the point of RUR 14,3 billion.
The J&P’s research analyzed revenues of 50 Russian video services, such as online cinemas, TV channels making profit on the Internet, digital commerce platforms, as well as pay TV market players, providing access to viewing content in the online cinema halls or by means of set-top-boxes for a certain fee.
Out of the total video services, these are Russian online cinemas that received the highest revenue of RUR 5.9 billion (share is 69.6%). As analysts believe, the main reason for income growth is the improvement of paid services.
TV channels that legally sell their content on the Internet earned RUR 1 billion (share is 11.8%). As the J&P pointes out, this amount of revenues was even 1% of earnings from broadcast advertising, but this kind of earnings online expects a rapid growth in the future.
Operators providing pay-TV services earned from VOD-services RUR 994 million (share of 11.7%). The J&P’s research emphasizes that this additional service will allow pay-TV players raising ARPU in a short time.
Lastly, the digital commerce platforms earned a profit of RUR 581 million (the lowest share is 6, 9%) on providing VOD-services. As stated in the J&P’s report, the VAT imposition may increase the price for digital content that will result in losing customer appeal. And it will surely affect negatively the development of such platforms.
The J&P Company’s researchers also mentioned development features of each segment:
• as for online cinemas, it is not expected the entry of new players, but just strengthening positions of the existing ones. For example, the Netflix, which started in Russia in January, can get a significant audience if russifies and increases its content, as well as revises the price for its services to the Russians;
• cooperation of pay TV operators and online cinemas provides benefits to the both ones, i.e. the first ones gain an opportunity of providing new services, and the second ones gain the audience;
• production of own the content: some Russian video services announced the emergence of their own content;
• formation of a recommendation system, which importantly simplifies the search for desired content, as well as keeps user’s attention on the resource or application.

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