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Legal video services market in Russia. Results of 2015

March 2016

Analytical Report (full version)

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Analytical Report (full version)

Legal video services market in Russia. Results of 2015
Legal video services market in Russia. Results of 2015
March 2016

Legal video services market in Russia. Results of 2015

March 2016

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J'son & Partners Consulting present brief results of their research of the Russian market of legal video services by the end of 2015 and forecast of its development until 2019.

 

 

Summary of the study

 

The study analyzes video services in Russia that provide access to legal content (video on demand) via a subscriber console or through OTT (without binding to the operator's network). The authors considered four models of monetization of video services:

➢     AVOD (advertising video on demand) - video is accompanied by a certain number of advertising messages;

➢     TVOD (transactional video on demand) - viewer rents a unit of video content for a limited time;

➢     SVOD (subscription video on demand) - subscription access to a content library for a certain period of time, without limiting the number of views;

➢     EST (electronic sell through) - user purchases a digital copy of the content.

 

In 2015, J'son & Partners Consulting added a new segmentation of players to the market structure description. It was done due to the need for more detailed consideration of trends and prospects for the industry development. All 50 companies included in the study are divided into the following groups:

➢    Online cinemas - content aggregators that provide the ability to view video both through project sites, and through service applications for mobile platforms and Smart TVs. For example, ivi, Amediateka, Okko, etc.

➢     TV channels - broadcasters, primarily monetizing their content on the Internet on the basis of a paid or advertising model (STS, Pervy Channel, TNT, etc.)

➢     Operators - paid TV operators who have implemented pay-per-view video services on consoles (STB) in form of VODs or cinemas on selected channels (Rostelecom, Beeline, AKADO, etc.)

➢     Digital distribution platforms - video content aggregators that provide OTT browsing, mobile application services and Smart TV (iTunes, Google Play, etc.).

 

 

J'son & Partners Consulting remind that, since 2014, the methodology for calculating income has changed. The revenue of companies from video-on-demand services is taken into account without VAT, and in the AVOD monetization model, players' revenues are calculated before deduction of commission of seller agencies.

 

 

Current status and market forecasts.

 

At the end of 2015, the volume of the Russian legal video services market reached 8.5 billion rubles.

 

According to J'son & Partners Consulting estimates, by 2019, the legal video services market revenues will grow 1.7 times compared to 2015, that is to 14.3 billion rubles. The average annual growth rate in 2015-2019 will be 14%.

 

Due to the ruble devaluation and the global market growth at rapid rates, in 2015 the share of the Russian market in the total global market volume has decreased twice, to 0.5%.

 

Source: J'son & Partners Consulting, other

 

In 2015, the most common model of monetization was still AVOD. But its share in the market slightly decreased due to the growth of paid services. However, according to J'son & Partners Consulting forecasts, AVOD will remain the absolute leader of the market and will retain its share of at least 65% until 2019.

 

Source: J'son & Partners Consulting, other

 

Online cinemas are the market’s key link, in 2015 they earned 5.9 billion rubles. The main players have sharply increased their revenues (by 50-70%), among other things through the development of paid services. This allowed some of them to declare an operational break-even.

 

TV channels rank second in terms of incomes from legal videos with revenues of 1 billion rubles. This is still less than 1% of advertising revenues on TV, but the rapid growth of online channels and their revenues will continue.

 

Operators of paid TV received 994 mln rubles from providing video on demand. Over time, this can become an important additional service for them that will increase the ARPU.

 

Digital distribution platforms in 2015 earned 581 mln rubles by VOD. The introduction of VAT when selling digital content can slow down the development of this segment in the next few years due to rising costs for users.

 

Source: J'son & Partners Consulting, other


 

The key trends in the development of the legal video services market in Russia are:

  1. The emergence of large new players is unlikely, but strengthening of the existing ones is possible.

A vivid example is the emergence of Netflix in Russia in early 2016 and possible strengthening of its positions in 2017. If the company conducts the interface russification, revises tariffs and replenishes its library with the content claimed by Russian users, it can take a significant share in the market.

  1. Increasing cooperation between paid TV operators and online cinemas

Such agreements are beneficial for both parties - paid TV operators receive a ready-made VOD-offer, which complements the basic services well, and online cinemas, in turn, receive new viewers.

  1. Production of own content

In 2016, several new projects, produced by legal video resources, are expected to be released.

  1. Development of recommendation systems

 

An important occurrence of 2015 was the development of systems of recommendations to users by many video services. The main goal is to simplify the task of selecting and keeping the viewer in front of the screen for as long time as possible. Which, in turn, should lead to the revenue growth.

 

 

 

More detailed results presented in the full version of the report

«Legal video services market in Russia, 2014-2019»

 

 

Example of contents:

 

Summary of the study

 

1. Research methodology

 

2. The global market for video services. Key indicators for 2014 - 2019 and the place of the Russian market.

 

2.1. Overview of the market for video services in the world

2.2. Key players in the global video services market and their strategies

2.3. Main figures of the world market for video services 2014 - 2019

 

3. The Russian market of legal video services

3.1. Main tendencies of the legal video services development in Russia in 2015

3.2. Quantitative indicators of the industry, the market structure by business models, 2014-2019

3.3. Structure of the market segments, 2015

3.3.1. Online cinemas

3.3.2. TV channels

3.3.3. Operators

3.3.4. Platforms for digital distribution

3.4. Audience of legal video services in Russia

3.4.1. Desktop audience of legal video resources

3.4.2. Mobile video content audience

3.4.3. Audience of legal video resources on Smart TV

3.4.4. The average number of video views in online-cinemas

3.5. Legal video services content

3.6. Regulation of the market

3.7. Key trends in the market of legal video services

3.7.1. The market development

3.7.2. Distribution devices

3.7.3. Content and user experience

 

Conclusion

 

 

 

Appendix 1. Profiles of the main players

Online cinemas

TV channels

Operators

Platforms for digital distribution

 

List of figures

Fig. 1. Methods of estimating incomes from the AVOD model

Fig. 2. The global market for legal video services in monetary terms, bln $, 2014-2019

Fig. 3. The global market for legal video services in real terms, mln households, 2014-2019

Fig. 4. The global market for legal video services, by monetization models, 2014-2019

Fig. 5. The Russian market of legal video services, bln RUB, 2014-2019

Fig. 6. Structure of the market of legal video services by monetization models, 2014-2015

Fig. 7. Revenues in the AVOD monetization model, mln RUB, 2015

Fig. 8. Revenues in the TVOD monetization model, mln RUB, 2015

Fig. 9. Revenues in the EST monetization model, mln RUB, 2015

Fig. 10. Revenues in the SVOD monetization model, mln RUB, 2015

Fig. 11. Structure of the market of legal video services by monetization models, 2014-2019

Fig. 12. Revenue structure of the market of legal video services by segments, 2015

Fig. 13. Revenue structure of the market of legal video services by delivery platforms, 2015

Fig. 14. Market shares of players in the segment of online cinemas, 2015

Fig. 15. Revenue structure of the segment of online cinemas by monetization models, 2015-2019

Fig. 16. Revenue structure of the segment of online cinemas by delivery platforms, 2015

Fig. 17. Income distribution in the market segment "TV Channels" by holding companies, 2015

Fig. 18. Revenues of the segment of TV channels from Internet video content, mln RUB, 2015

Fig. 19. Revenue structure of operators in the market segment "Operators", 2015

Fig. 20. Revenue structure of operators in the market segment "Digital distribution platforms", 2015

Fig. 21. Distribution of Internet users by devices, 2015

Fig. 22. Smart TV user preferences by VOD genres, 2015

 

List of tables

 

Table. 1. Marketing and technological classification of TV

Table. 2. Features of monetization models of legal video services

Table. 3. Revenues of the market by monetization models, mln RUB, 2014-2019

Table. 4. The number of companies in the study

Table. 5. Audience of online cinemas on desktop devices

Table. 6. Audience of sites of TV channels on desktop devices

Table. 7. Structure of the audience watching movies, TV series and TV shows on the Internet on mobile devices by age groups

Table. 8. Duration of viewing films, TV series and TV shows on mobile devices

Table. 9. Frequency of non-linear viewing on Smart TV

Table. 10. Smart TV applications used for watching videos

Table. 11. The monthly average number of video views on mobile devices, 2015

Table. 12. General characteristics of the content of free online cinemas, 2015

Table. 13. General characteristics of the content of mixed system cinemas, 2015

Table. 14. General characteristics of the content of paid online cinemas, 2015

Table. 15. General characteristics of the content of TV channels, 2015

Table. 16. General characteristics of the content of operators, 2015

Table. 17. General characteristics of the content of digital distribution platforms, 2015

Table. 18. Structure of video collections of the Russian video services by format, 2015

Table. 19. Structure of video collections of the Russian video services by producing country, 2015

 

 

The newsletter was prepared by J'son & Partners Consulting. We make every effort to provide factual and forecast data that fully reflect the situation and are available at the time of the release. J'son & Partners Consulting reserves the right to revise the data in case of publication of new official information by individual players.

 

 

Copyright © 2016, J'son & Partners Consulting. The media can use any text, graphics and data contained in this market review, only using a link to the source of information - J'son & Partners Consulting or with an active link to the JSON.TV portal

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J'son & Partners Consulting present brief results of their research of the Russian market of legal video services by the end of 2015 and forecast of its development until 2019.