Online cinemas dreamed of revenue – Newspaper Kommersant No. 45 (7490) of 03/17/2023

In 2023, the Russian market of online cinemas may increase in terms of revenue by 18–20%, up to 80 billion rubles, TMT Consulting expects. TelecomDaily estimates a potential growth of 10-12%, up to 70 billion rubles. Optimistic forecasts are based, among other things, on the good results of 2022: despite the failure in the first half of the year, it ended with growth. Market players hope to keep the momentum through original content and “the right marketing policy”, but acknowledge that the absence of high-profile foreign releases will continue to support piracy.

Kommersant got acquainted with the rating of online cinemas for 2022 and the forecast for 2023 from TMT Consulting. It follows from the analysis that the market for legal video services is expected to grow by 18–20%, to more than 80 billion rubles. TelecomDaily gives a more modest forecast – an increase of 10-12%, up to 70 billion rubles.

According to TMT Consulting, according to the results of 2022, the market of Russian online cinemas also showed growth – by 17%, to 67.8 billion rubles, despite a slowdown in the first half of the year (see “Kommersant” dated August 12 2022). Thus, non-operator services (with the exception of Wink Rostelecom, Kion MTS, video portals, TV channel websites) increased revenue for the year by 13%, to 51.1 billion rubles, operator services – by 32%, to 15.7 billion rubles. Improvement in the dynamics of analytics is associated with the development of digital ecosystems, as well as the arrival of new foreign content providers. The top 3 included Kinopoisk (Yandex), ivi and Wink (Rostelecom), which displaced Okko from third place.

Wink director Anton Volodkin said that the company expects to accelerate growth in 2023, “the previously announced consolidation of Wink and more.tv online cinemas is expected to be completed, and this structure will naturally take a large market share.” Current trends allow us to talk about the potential for further growth, agrees Alexei Ivanov, CEO of MTS Media. “We’re planning dozens of original projects,” he adds. Elvira Dmitrievskaya, Deputy General Director of Okko, notes: “Most of the online cinemas are included in various ecosystem subscriptions. How much of this money is distributed to online cinemas is up to the ecosystems to decide.” In Kinopoisk, Amediateka and ivi did not respond to a request.

A return to previous growth rates directly depends on the situation with piracy, says Yulia Mindubayeva, executive director of the Start online cinema (owned by MegaFon). “The request to watch a high-profile release has not gone away, which means that viewers go to look for these projects from pirates and find domestic novelties there,” she says. After the outbreak of hostilities in Ukraine, many foreign streaming platforms left Russia, including Netflix, at the same time, the largest Hollywood rights holders Universal, Disney, Sony, Warner and others suspended their work in the country and began to revoke the licenses to show their films. This led to an influx of users to pirated video services (see Kommersant dated February 28, 2022).

TelecomDaily CEO Denis Kuskov believes that the growth of the Russian video streaming market will be facilitated by an increase in the production of original content, “the number of new releases can grow by 30%, up to about 120 units.” Russian online cinemas are indeed ramping up production (see Kommersant of March 3). Kommersant’s interlocutors in the market add that content from Asia and Turkey will also help growth. Growth in the cost of subscription packages can increase revenues, however, with the expansion of functions, Mr. Kuskov specifies. It is “correct marketing and advertising that will adjust the demand and redirect it to original Russian content,” emphasizes Aleksey Byrdin, CEO of the Internet Video Association. He considers piracy a key negative factor for the market. If it is possible to keep viewers in the legal field, the expert believes, the segment may end the year with growth of 10-20%.

Julia Yurasova