FOCUS: COVID relief, end of trials to halve e-cinema market’s 2021 rise

By Yekaterina Yezhova

MOSCOW, Aug 23 (PRIME) -- The removal of the coronavirus restrictions and an outflow of trial users will cut the 2021 growth of online cinemas in Russia to 25–30% from a 50% rise in 2020, analysts and video services said, adding that Netflix was the only to raise revenue and keep a high check.

“As of the end of January–June, total revenue of legal online video services in Russia amounted to 21.919 billion rubles, up 24% on the year. But the over-the-top (OTT) segment will fail to keep the high growth rates it demonstrated from 2018 till 2020. TelecomDaily expects revenue of OTT services to go up by 25–30% in 2021 against 50% and more in the previous periods,” news and research agency TelecomDaily said in a study.

The agency’s General Director Denis Kuskov told PRIME, “Last year, the market advanced actively thanks to the lockdown. This year TV viewers were more passive.”

MEGOGO Russia General Director Viktor Chekanov said that when the COVID restrictions were softened, the audience of some market players shrank, which could be a natural correction after the previous year’s soaring thanks to large-scale promotions.

According to TelecomDaily, ivi kept its grip on the market with 24% of total revenue, up 1 percentage point from the end of 2020.

Okko remained number two but lost 2.6 percentage points to 12.4%. The online cinema said in a statement that the number of its subscribers decreased by 29% since the end of 2020 to 1.7 million as of the end of July, “which results from fewer trial users.”

TelecomDaily said KinoPoisk, belonging to Internet company Yandex, showed a remarkable rise by gaining 14.1% against 8% as of the end of 2020. “From the point of view of KinoPoisk’s evolution, it has always had a noticeable potential. A wise entry into the ecosystem, convenience, and interesting price tariffs help the company progress actively,” Kuskov said.

YouTube rolled back to 7.9% from 9%, while Netflix’s share edged up to 8.9% from 8% and Start’s share advanced to 5.4% from 4%. MEGOGO’s share eased to 5% over January–June from 6% as of the end of 2020.

Of the total revenue, the pay model gained 30% on the year to 17.844 billion rubles and the advertising model, when content is shown for free after commercials, added 2% to 4.075 billion rubles. The share of the advertising model continued to fall and decreased to 18.5% from 22.5% a year earlier.

“What is important is that the shares in incomes from advertising were split in a different manner. The absolute leader here stays YouTube with 32.1% against 33% as of the end of 2020, ivi’s share grew to 23% from 20%, and MEGOGO joined the top three with 15% against 14%. In this segment, CTC Media with 10.7% against 8% earlier and RuTube with 7.3% against 8% earlier were also eye-catching,” TelecomDaily said.

Revenue of KION, an online cinema project of mobile operator MTS, rocketed by 120% on the low base effect, but accounted for less than 1% of the total market revenue.

MEGOGO Russia’s head Chekanov said the online cinema’s revenue increased by 32% in January–June and the number of subscribers soared by 28% on the year, while the number of unique users shrank by 3%.

He added that MEGOGO’s users prefer subscription. “It’s versatile and gives the subscriber many different options. Our subscription Maximum for 397 rubles per month tops the sales – the client gets not only films and series, but also 260 Russian and foreign TV channels with the options of rewinding and archive,” Chekanov told PRIME.

Okko said in the statement its base of paying users expanded by 23% on the year in January–June, and the average monthly number of subscribers using pay services at least once a quarter went up to 3.1 million from 2.5 million.

According to TelecomDaily, users spent an average of 323 rubles per month on services of online cinemas.

“If we analyse an average check of online services, revenue grew most at the companies with a lower average revenue per user – they are not among the top 10 by average check – KinoPoisk with 278 rubles, KION with 270 rubles, and Start with 217 rubles,” TelecomDaily said.

“The only company that grows actively in the total rating, raises revenue well while keeping the average check high is Netflix. It has the highest check of 479 rubles among the 14 online cinemas leading by gross revenue on the market.”

(74.3640 rubles – U.S. $1)

End