Russian online cinemas want to regulate Netflix: “for” and “against”

Source: Netflix

Yesterday, a round table was held under the title “New Model of Doing Business in the Field of TV and TV Companies in the Context of Incomes Falling” It was held at the exhibition CSTB. At this meeting, participants in the pay-TV market expressed their concerns about the release of Netflix 's American video service to Russia.

Netflix opened access to its content for residents of Russia and another 129 countries in early January. Due to the availability of Netflix for Russian users, the market may roll back 15 years ago, said yesterday the general director of Signal Media, Mikhail Kovalchuk.
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Now the service interface supports only English. Market participants offer “at a minimum” to oblige services like Netflix to be Russified.

In addition, given the depreciation of the ruble, Russian content began to cost “very cheap”, said General Director of Digital Television, Kirill Lysko. “It may be worthwhile to think about how to prevent buying up Russian content at a cheap price,” he suggested.

“Netflix, working in Russia, must pay taxes, including VAT, to the Russian budget,” said TVzavr CEO Marina Surygina.

Such an initiative is being discussed at the legislative level, State Duma deputy Leonid Levin recalled: at the end of 2015, the State Duma introduced a draft law on VAT for transactions over the Internet, which would make it possible to bring the cost of domestic content closer to foreign.

In general, the list of proposals from “prohibiting” or “forcing” to “forcibly Russifying” raises many questions, the general director of the Megogo online cinema in Russia, Viktor Chekanov, doubts.

Not all online cinemas believe that tightening legislative regulation will contribute to the development of the industry. “Our segment is therefore so progressive and diversified that it has market laws - licensing, product, content,” explained Olga Filipuk, vice president of content policy at ivi.ru, explaining her position to Kommersant.

“We have our own idea of ​​the strengths and weaknesses of this service. Together with our own product and content development plan, this gives us confidence that we can successfully compete with Netflix, as well as strengthen our position, ”said Irina Grandel, Director of Business Development, Partnerships and Paid Model for Ivi Online Cinema.

Chairman of the Board of the Association of Film and Television Producers Alexander Akopov doubts that the American service will be able to press the Russian players. He clarified that the success of Netflix in Russia will depend on the content they acquire from the copyright holders.

In January-September 2015, the service earned $ 4.9 billion. In Russia, the volume of the market of legal online video services at the end of 2015 was estimated by TMT Consulting at 3.8 billion rubles, which is 45% higher than the 2014 level.

Netflix is ​​the largest online cinema in terms of the number of users: the service has 75 million subscribers worldwide, of which about 30 million are outside the United States. According to estimates of the British analytical company Ovum, by 2020 the company could reach 200 million subscribers.

Video service Netflix was created in 1997. In addition to providing video on demand (VoD), the company produces its own content.

Netflix financial and quantitative indicators confirm the interest of users to its model. Over the past year, Netflix revenues grew by 20% to $ 6.7 billion, capitalization by 60% to $ 42.4 billion. The Netflix library now has over 13,000 pieces of content.

At the same time, the company's margins are still very low - with a revenue of $ 6.7 billion, it earned only $ 122 million in 2015. On the international market, Netflix is ​​still unprofitable - by the end of 2015, the net loss from international business was $ 334 million.

The company takes it easy - according to Reed Hastings, as the business expands, the loss in the international market will grow, and 2015 will not be the peak year. Hastings believes that the result is worth it, and continues to believe his intuition: “The Internet has changed so many sectors of our economy. We are Internet TV, this sector has been very small for 15 years, and now it is already becoming significant. In 10 or 20 years, Internet TV will be the whole television, ”RBC reports .