FOCUS: Russian online cinemas steal visitors from traditional halls

By Yekaterina Yezhova

MOSCOW, Feb 1 (PRIME) -- Afisha Mail.Ru, a large aggregator of online cinemas in the Runet – the Russian speaking Internet – registered growth of users during New Year holidays, while the number of visitors of traditional cinemas declined. Analysts said low prices are the main advantage of online cinemas and demand for pay video-on-demand will keep on growing.

“A gradual shift of users from offline to online – thanks to the comfort and additional services offered by online cinemas – has been evident for several years already,” the aggregator’s head Alexei Antropov said in a statement.

According to a single automatized information system, the traffic of cinema goers plunged 30% on the year to 11 million in the period of January 1–10, while online demonstrated quite an opposite trend.

Audience of Afisha Mail.Ru’s special New Year project, which accumulated movies from 11 online cinemas, swelled 17% on the year during the reported period.

The holiday period proves the general trend. “The number of views in online cinemas rose 15% in 2015. The market of pay video, which includes Electronic Sell-Through (EST), Transactional Video on Demand (TVOD) and Subscription Video on Demand (SVOD) models, almost triples each year,” Yevgenia Smirnova, head of the entertainment sector at the retail audit department at research firm GfK, told Russian Connection.

“Since the advertising model dominates, growth of the online cinemas market is not large at present, but the situation is changing. The share of pay video is expanding and will occupy the bulk of the video-on-demand market.”

“The main advantage of online cinemas is that it’s a simple and accessible way to watch any movie without leaving home. It’s evident that one will have to wait for a Hollywood latest blockbuster, while it is making the box office at traditional cinemas, and it seems to be the only drawback of video-on-demand,” Smirnova said.

If compared to traditional halls, an undeniable advantage of online cinemas is the price: an average cinema ticket equals a monthly subscription to an unlimited number of movies and serials, she said.

Video-on-demand splits into two groups: free video, or an advertising model (AVOD), and pay video, that is a one-time payment (EST or TVOD) or a subscription (SVOD). Half of free video audience uses desktops, while the bulk of pay video audience exploits TV sets with a Smart TV option.

“The reason is clear: if a viewer is ready to pay, they want to get the most of it. Besides, many online cinemas offer videos in the high-definition quality and even 4K resolution, whose effect can be appreciated on large-sized screens,” Smirnova said.

Sputnik.Kino, a legal content aggregator of Sputnik, an internet portal launched by state-controlled Rostelecom, collaborates with such resources as ivi.ru, Megogo, Tvigle, TVzavr and Zabava.

“The service has some 10,000 movies, and two thirds of them are free; 80% of pay offers cost 49 rubles and the maximum price is set at 399 rubles,” Sputnik.Kino’s head Dmitry Slovinsky told Russian Connection.

“If a user chooses a movie under subscription or a pay model, Sputnik.Kino redirects them to the corresponding online cinema, where the user pays for the video and watches it. If a movie is free, it can be watched straight on Sputnik’s Web site via players. If the chosen movie is provided by several online cinemas, the user can choose the provider by its proposal. The user sees a menu with offers, prices and technical features of the movie.”

Launched in early December 2015, Sputnik.Kino is still in a beta version, but will certainly sell advertisements in the future to monetize the service, Slovinsky said.

Online cinema Megogo had 17.2 million unique users on all its platforms, including connected devices, like mobile gadgets and Smart TV, at the end of last year. According to its December 2015 study, Megogo’s audience was equally split between men and women, and 31% of its clients were 25–34 years old.

Big Chinese online retailer JD.com said earlier in January that it is studying opening an online cinema in Russia, which can be launched on its own new platform or with local partners. The online cinema can show Russian and Western serials.

(75.1723 rubles – U.S. $1)

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