Creates "All-Russian Netflix" worth $ 100 million

The largest Russian telecom operators (Rostelecom, MTS, MegaFon, VimpelCom, Er-Telecom Holding) have joined forces with domestic film studios (Prof-Media, CTC Media, etc.) for the new mega Project - All-Russian online cinema with free and paid movies, modeled on Netflix.

To work on the project in February 2014, a non-commercial partnership "Media Communication Union" was formed . The portal is due to start next year, and the partnership’s leadership investment is estimated at $ 100 million, writes Izvestia.
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The logic is quite understandable. It is beneficial for providers that traffic from video services (and this is a good half of all traffic on the Internet) remains in Russia. The profit of domestic film studios is also obvious: in the future, online will become one of the main channels for selling licensed content.

From a state point of view, the project is also important. This is cultural security (similar to food security, self-sufficiency in cultural “product”), and isolation from the corrupting influence of the West, and the possibility of censoring western films, and a promising project in terms of the possible isolation of the Russian segment of the Internet, which the authorities previously mentioned. In the light of the above, participants in a “non-commercial” partnership may reasonably rely on public investment.

“Independent access to the online video market requires high costs from companies and will not allow providing a large audience because of an insufficiently wide content library,” explains Sergey Petrov, president of Media-Communication Union, deputy director of CTC Media’s ). - This limits the potential amount of revenue from advertising and subscriptions. The creation of this site will allow to bring to the market a single online platform with a wide choice of content from several players. ”

Petrov said that in the online cinema will be movies, TV shows, television shows. It is supposed both sale of subscriptions, and display of free films with advertising.

By the way, some members of the Media-Communication Union already have their own online cinemas (Videomore.ru from STS, Zabava.ru from Rostelecom), so a joint project could be made on their basis. It would probably have cost less than $ 100 million.