Russia eyes LTE TV services

Russia is looking into the possibility of launching TV services using LTE Broadcast technology.

Quoted by AKTR and RNS, Nikolai Nikiforov, the minister of communications and mass media, said that it is already undertaking tests employing the technology, which could theoretically allow for the switch off of analogue and digital broadcasts in certain areas.

This would free up frequencies that could be used to broadcast up to 20 HD channels and still retain capacity for mobile internet.

Although Nikiforov did not provide a launch date, he said that services woud be provided on a sound economic footing.

They could be received by up to 16.6 million households.

Russia set for “Chinese Netflix”

LeEco, which has been described as the Chinese Netflix, may soon make its debut in Russia.

Kommersant reports that the service, which outside its home market is also available in the US and India, currently claims a monthly audience of 750 million people.

It was launched in 2004 and known as LeTV until January this year.

Its Russian operation is likely to be headed by Viktor Xu and Alex Vassilev, who currently hold senior positions at the Chinese online retailer JD.com.

While Xu will oversee the development of LeEco in Russia, the CIS and Eastern Europe, Vassilev will be solely responsible for Russia.

LeEco, which has a variety of businesses including the manufacture of smartphones, is listed on the Shenzen Stock Exchange and has a capitalization of $17 billion.

Its revenues in 2015 amounted to around $2 billion.

Russian pay-TV revenues fall

Increased competition from the internet and free public digital TV services contributed to a fall in Russian pay-TV revenues in the first quarter.

Quoting data provided by TMT Consulting, Vedomosti reports that they amounted to R17.5 billion (€235.6 million ), down 1.9% on the previous quarter. However, the general trend remains upwards, with the figure representing an annual growth of 12%.

Much of the reduction in Q1 could be attributed to Tricolor TV, the country’s leading pay-TV platform, which saw its revenues fall by 20% q-o-q. This was put down to seasonal factors, and Tricolor TV also pointed out that its revenues in Q1 this year were 32% higher than in the corresponding period in 2015.

The attraction of the internet in Russia is underlined by the growing number of users. This amounted to a monthly figure 80.5 million in 2015, or 9.2% more than a year earlier. It is also seen by the popularity of IPTV services, and in particular the success of those operated by Rostelecom.

Russian pay-TV: IPTV shines as growth slows

Russia’s pay-TV market gained only 350,000 new subscribers in the first quarter of 2016

This, according to TelecomDaily, was the lowest figure recorded for some years, adding that the total number of pay-TV subscribers as of the end of March stood at 39.97 million, representing a penetration figure of 72%.

Meanwhile, average bills per subscriber amounted to R155 (€2) a month.

Significantly, around 90% of new connections in Q1 were secured by the five leading providers of pay-TV services.

Rostelecom accounted for 50% of new connections, or more than all DTH platforms combined, thanks to its IPTV deployment.

The telco saw its subscriber base grew from 8.60 million to 8.77 million in the first three months of this year.

Russia eyes new satellite system

Russia is likely to have a new satellite communications system giving access to digital TV and others services in moving objects by 2019.

Kommersant reports that it will be operated by Sky Global Communications (Sky GC), a company set up by Vyacheslav Kamnev, the former deputy general director of Gazprom Media.

It adds that Sky GC will build a satellite communications system named Rosinfokom, consisting of three satellites in high elliptical orbit and covering the whole of Russia, Arctic zone, coast of Canada, as well as China and India.

Its aim will to be to provide services to passenger planes, trains and cars, and it will have a potential audience of 50 million people.

Russia had over 2,300 TV channels at the end of 2015

European Audiovisual Observatory publishes free new report on Russian audiovisual industry.

• Russian TV market tops over 2,300 operating TV channels at the end of 2015: Gazprom Media, VGTRK and National Media Group largest media holdings
• Pay-TV as the cornerstone of Russian TV market: over 2/3 of Russian TV households subscribed to pay-TV in 2014 with digital segment and IPTV as main future drivers
• Rapid growth in Russian VoD market: more than 40 VoD services available at the end of 2015 and dominance of transaction and subscription business model

These findings come from a brand new report, “FOCUS on the Audiovisual Industry in the Russian Federation”, just published by the European Audiovisual Observatory (part of the Council of Europe in Strasbourg) together with Nevafilm Research. It can be downloaded on our website for free in English and in Russian.

The report provides a snapshot of the Russian audiovisual industry in 2014-2015 detailing key trends in the television and on demand sector supplemented by detailed information about the sources of industry financing and an overview of the legal framework.

Russian TV market tops over 2300 operating TV channels at end of 2015: Gazprom Media, VGTRK and National Media Group largest media holdings

A total of 2,370 TV channels were identified as operating and accessible in Russia and/or having licences to broadcast in the country, according to the report. Of these, at least 520 are regional representatives of national networks, the largest of which (with over 50 regional partners each) are REN TV, TNT, Rossiya 1, CTC, and Rossiya 24.

Over 80% of Russian channels are in the hands of private companies, 13% are state-owned, and 5% have combined ownership (some of their shares are held by national or regional authorities). At the start of 2016, the major media holdings, owning the largest number of channels, were Gazprom Media (owning a total of more than 50 channels including the Red Media and ProfMedia holdings), VGTRK (30 channels owned partially or outright, plus regional television and radio companies), and National Media Group (25 channels, including Discovery Communications and Turner Broadcasting Systems).

A third of TV channels operating in Russia at the end of 2015 were general regional channels (broadcasting local news and their own entertainment programmes, as well as independently purchased content). Channels devoted to music and entertainment and lifestyle programming make up 21% of the currently operating Russian TV channels. The third most popular group of channels is those broadcasting films and series. It is worth noting that national channels broadcasting generalist content, such as Channel One, Rossiya 1, NTV, Peterburg – 5 kanal, REN TV, and TV Centre account for only 3% of the range available to audiences.

A small proportion of the channels studied (60 – 8% of the total) are HD versions of both free terrestrial and pay-cable channels available to digital TV users. Meanwhile, there is a total of 121 HD channels in the Observatory’s MAVISE database, meaning half of them do not have standard versions accessible to viewers of analogue TV. The vast majority of HD (97 out of 121) and 3D channels (5 out of 6) are pay channels.

Overall, more than half of all the channels available in Russia are pay channels, and a large proportion of free-to-air channels are provided by regional terrestrial television and radio companies. Hence, in every single region of the country viewers must pay to access the majority of TV channels.

Pay-TV as the cornerstone of Russian TV market: over 2/3 of Russian TV households subscribed to pay-TV in 2014 with digital segment and IPTV as main future drivers

The report states that 68% of households subscribed to pay-TV in 2014, 8% more than the year before. The highest saturation of pay-TV was seen in the Central and Northwestern districts (80% and 77%, respectively). Meanwhile, the fastest growth rates were observed in Siberia (+15%), Central Russia and the Southern Federal District (+14%), and in Russia’s Far East (+13%). The first and latter in this list are also the ones with the most potential for further development (due to their relatively low saturation level).

The total number of pay-TV subscribers in Russia reached 37.7 million in 2014, according to report figures. However, this data does not account for the fact that one family may have several subscriptions. The size of the pay-TV market in 2014 is estimated at RUB 61.2 billion.

Market growth by subscriber numbers is gradually slowing down (due to market saturation): in 2014, the market grew by 7–8%, whereas this indicator had previously been in double figures. Satellite television is the growth leader in absolute terms but there has been a notable stagnation in the cable pay-TV segment in Russia.

The main trend in pay-TV over the next few years will be a growing subscriber base in the digital segment and in IPTV. Growth will be moderate, though rates of growth could vary significantly between individual operators. The significant network modernisation observed over the past two to three years is not expected to continue, due to financial and economic difficulties in the market.

Rapid growth in Russian VoD market: more than 40 VoD services available at the end of 2015 and dominance of transaction and subscription business models

Since 2011, the Russian VoD market has experienced rapid growth which is characterised by an increase in the number of services and the size of their catalogues, as well as the platforms via which VoD can be accessed. At the same time, from a business-model point of view a ‘backwards movement’ began: from the dominant ad-based model towards transaction and subscription models.

According to an analysis of the European Audiovisual Observatory’s updated MAVISE database, by the end of 2015 there were more than 40 VoD services available in Russia, specialising in professional feature-film and television content (this does not include catch-up versions of TV channels, news portals, and specialist children’s services such as deti.ivi.ru, Internet music channels, and network versions of popular television programmes such as Dom-2 and KVN, or sites exclusively featuring user-generated content (UGC) and unlicensed content).

The leader in terms of user numbers is ivi.ru (around 38 million viewers); this service receives up to 200,000 views per month on average (using the ad-based, subscription, and transactional models), which is ten times more than its closest competitors. Meanwhile, Okko, which bases its business on paid services, takes the lead in terms of revenue, with earnings of RUB 630 million in the first half of 2015.

The arrival of global VoD players on the Russian market has not led to significant changes: at the end of 2012, iTunes and Google Play launched in Russia, followed in 2013 by Amediateka, the official distributor of content from HBO, and the launch of a range of other leading international producers; the international giant Netflix entered the Russian market in January 2016 (Russian audiences are initially being offered a limited content library and an English-language interface). However, it is not expected that the domestic leaders (ivi.ru, Megogo.net, Okko, and Tvigle.ru) will be forced out of their positions by these foreign competitors.

VOD is still growing, and it is doing so faster than other segments of the audiovisual industry. In the future, one can expect to see subscriber services strengthen their position and further growth through mergers and acquisitions.

Netflix attracts suspicion in Russia

Russian pay-TV operators are viewing the rececent arrival of Netflix in the country with suspicion.

Kommersant reports that in a roundtable discussion at CSTB 2016 in Moscow, some participants called for the service to be ‘Russified’. Given the devaluation of the ruble, Netflix would find the cost of Russian content relatrively inexpensive.

Significantly, some also called for there to be a level playing field between Russian and foreign players, requiring the latter to pay taxes, including VAT.

Mixed views were also expressed as to whether the online video market in Russia would benefit from the tightening of legal regulation.

IPTV grows in Russia

Russia ended 2015 with 2015 with 5.52 million IPTV subscribers, a 20.2% increase on the total a year earlier.

At the same time, according to figures produced by TMT Consulting and quoted by ComNews, the total number of pay-TV subscribers in the country increased by 3.7% to 39.4 million, compared to an 8.6% rise in 2014.

IPTV was the fastest growing pay-TV segment in 2014, while last year, in absolute terms, the increase in the IPTV subscriber base matched that in the satellite TV one.

In Moscow, IPTV accounted for 48% of new pay-TV connections in 2015 thanks largely to the new MGTS GPON fibre-optic network.

Rostelecom accounted for the majority of IPTV connections in Russia as a whole, gaining 0.6 million to reach 3.3 million at the end of last year.

Although cable remains the most popular way to receive pay-TV services in Russia, accounting for 46% of connections and followed by satellite (40%) and IPTV (14%), it is starting to IPTV, losing 1.5% of its subscriber base in 2015.

Russian pay-TV: a confusing picture

There seems to be little agreement as to the performance of Russia’s pay-TV market, with leading authorities claiming it either grew or contracted in 2015.

According to ComNews, iKS Consulting claims that it increased in value terms by 11.7%, while TMT Consulting gives an even higher figure of 21.3%. J’son & Partners Consulting, on the other hand, argues, that it decreased by 3%.

Looking at specific figures, iKS Consulting state that Russia’s pay-TV market was worth R68.4 billion (€814.5 million) in 2015, while the subscriber base, at 39.2 million, was 5.4% higher than a year earlier.

Tricolor TV was the leading provider in terms of market share (30%), followed by Rostelecom (215), MTS and Orion Express (7.1% each) and ER Telecom (7%).

On the other hand, TMT Consulting gives a figure of R70 billion for the value of Russia’s pay-TV market in 2015. It also says that ARPU grew by 14% during the year, from R134 to R151, and predicts the market will grow to over R73 billion this year.

TMT Consulting in addition says that Rostelecom (27%) was the leading player, followed by Tricolor TV (21%), ER Telecom (10%), MTS 99%) and Akado (5%).

Meanwhile, J’son & Partners Consulting, who has not completed their final analysis on 2105, says that the pay-TV market in Russia was worth R64.7 billion. However, it also believes it will bounce back to its 2014 level this year, with package offers and hybrid TV services driving growth.

Russia eyes must-carry for OTT

Russia’s Ministry of Communications is discussing the possibility of obliging OTT services to carry national channels currently distributed on the first and second DTT multiplexes.

According to RNS and AKTR, the ministry has been consulting with ISPs and TV channels on the matter.

Quoting Alexei Volin, the deputy minister of communications, they add that OTT services can currently distribute must-carry TV channels, but only if they are licensed pay-TV operators.

They should also have agreements with subscribers, and the order and content of the TV channels must be changed, too – not only for streaming broadcasts, but also for time shifting.

Significantly, Volin stressed that the discussions only related to streaming and not online movie services.

Although the regulator essentially believes that must-carry should applies to all media, broadcasters believe there are risks in distributing their services in the OTT environment.

The purpose of the discussions is to develop a consensus and then formalise it in the regulatory framework.

OTT in Russia: a glimpse into the future

Nearly two-thirds (65%) of all video views in Russia will be on mobile, STB and smart TV devices in three years time, according to Egor Yakovlev, founder and board member, Tvigle Media.

Yakovlev added that the overall audience of OTT video would have reached 100 million in Russia only, with the monthly view time being 80 hours.
Meanwhile, the ad-sponsored OTT market will be worth $800 million.

Furthermore, 70% of video content will be local/Russian language productions and up to 25% of this specifically produced for OTT/second screen.

Yakovlev said that smart TV sales are growing strongly in Russia and will account for over half (53%) of the total this year, rising to 70% in 2017.

In 2013, Russia became the number one market of smart TV sales for LG.

DTH drives Russian pay-TV market

The DTH platform Orion Express was the fastest growing pay-TV service in Russia in the first nine months of this year.

Research published by Telecom Daily show that it ended the third quarter with 2,748,000 subscribers, or 6.5% more than at the end of 2014.

It was closely followed by the market leader Tricolor TV, its 11,600,000 subscribers total being 6.4% higher than at the end of 2014.

Rostelecom grew its subscriber base by 3.6% to 8,270,000, ER Telecom by 2.7% to 2,690,000 and MTS by 2.4% to 2,825,000 over the same period.

The research notes that DTH still remains the most popular method of receiving pay-TV services in Russia.

The total number of pay-TV subscribers in the country stood at 39.1 million as of the end of Q3, up from 36.9 million in the corresponding period in 2014.

Russian DVB-T2 coup for DataMiner

The Russian Television and Radio Broadcasting Network (RTRS) has chosen DataMiner to manage its DVB-T2 network.

The network, reaching over 120 million people, consists of more than 5,000 digital transmitter sites and 70 regional headends, and DataMiner is integrated with over 4,000 devices from almost 500 different vendors.

Commenting on the deployment, Victor Pinchuk, first deputy general director at RTRS, said “The multi-vendor DataMiner network management and operational support system has been instrumental to our procurement strategy, since we needed an end-to-end network management solution to manage and operate the network irrespective of vendor or device type in the network. DataMiner is the only solution on the market that does the job today and guarantees our freedom to deploy just about any technology in our network in the future”.

Ben Vandenberghe, CEO at Skyline Communications, added: “The RTRS network really benefits from the DataMiner system architecture, as it can be scaled to manage and operate both small networks and the world’s largest network infrastructures. The multi-vendor nature of our system allows RTRS to deploy the best suited equipment today and in the future”.

AMT Group will be acting as a system integrator of the project. Its CEO Alexander Goltsov said that it would be using the latest product version, DataMiner 9.0, which will be installed for the first time in Russia.

As previously reported in Broadband TV News, Russia completed the transition to DVB-T2 in January this year.

Tricolor drives Russian pay-TV growth

The number of pay-TV subscribers grew by 520,000, or nearly 2%, in the first half of this year.

According to data produced by ComNews Research and published by ComNews, it stood at 38.32 million as of the end of June, with the five leading operators – Tricolor TV, Rostelecom, Orion Express, MTS and ER-Telecom – accounting for 82% of the total.

Growth was influenced by such factors as growing interest in HD; the reduction of the analogue subscriber base; and strong interest in special offers for digital TV services.

The ‘star performers’ in terms of subscriber growth in H1 were Tricolor TV and Orion Express, both of which posted figures of over 4.5%. This allowed Tricolor TV to further strengthen its position as the market leader and Orion Express to move up from fifth to third place.

As of the end of June, Tricolor TV had 11.42 million subscribers, Rostelecom 8.2 million, Orion Express 2.7 million, MTS 2.68 million and ER Telecom 2.62 million.

ComNews Research notes that while subscriber growth in H1 this year and the corresponding period in 2014 was almost identical, 80% of the growth this year was accountable to Tricolor TV.

Satellite first for Russia

The Russian Ministry of Communications and Mass Media (Minsvyaz) has announced the successful launch of the Express-AM8 satellite.

Located at 14 degrees West, it will cover the European part of Russia, Europe, Africa, the Middle East and – for the first time ever for a Russian communications satellite – Latin America.

Express-AM8 is equipped with C, Ku and L band transponders and has a lifetime of 15 years. It was funded from the state budget and built by Thales Alenia Space.

Russia plans a further satellite launch before the end of the year. It will be known as Express-AMU1 and provide broadcasting and telecom services to Russia, Europe and Africa.

Russia puts back digital deadline

Russia has made important amendments to its federal digital transition plan.

According to RTRS, the country’s first DTT multiplex (RTRS-1), which is distributed by the 3,587 transmitters built to date, already reaches 90% of the population.

Meanwhile, the second multiplex (RTRS-2) is available to 56.8% of the population, while the RTRS has also built 81 transmitters to distribute regional programmes.

The key change is extending the programme by a further three years, during which time there will be simulcasting to help optimise the expenditures of federal budget and broadcasters.

RTRS-1 will now be fully operational in 2016 and RTRS-2 in 2018.

By the end of 2018, RTRS-1 will reach 98.4% of the population and RTRS-2 98.1%.

DTT disappointment in Russia

Only around 10% of Russian households are opting to watch DTT services despite them already being available to some two-thirds of the total.

Quoting data produced by iKS Consulting and Kabelshchik, Kommersant says that this contrasts with DTH services, which are now received in 33% of households.

Russia’s federal programme for the development of broadcasting in 2009-2015 envisaged that by the end of this year the first DTT multiplex would reach 100% of the population and second 98.3%.

However, earlier this year the programme was extended to 2018 and multiplex targets reduced to 98.3% and 98% of the population respectively.

According to iKS Consulting, there were 37.7 million pay-TV subscribers in Russia at the end of last year, and 59% opted for digital TV services.

Slow start from Russian DTH platform

Russia’s MTS plans to start a full rollout of its DTH service in the near future.

Quoted by Comnews, its president Andrei Dubovskov said that it is already available as a commercial product to customers in Moscow, though it has not yet been promoted.

He added that it would aim to eventually have millions of subscribers but did not specify how many would be attained within a year.

The general view in the industry is that MTS will find it difficult to make an impact in a DTH market in which the three leading players are all firmly established.

MTS officially launched its DTH platform last November. It subsequently tried to secure subscribers from the MTG-backed service Raduga TV, which ceased operations at the end of last year.

Tricolor TV is the undisputed market leader in Russia’s DTH sector, claiming 75.7% of the total subscriber base.

It is followed by Orion Express and NTV-Plus, with shares of 16% and 5.3% respectively.

Russia takes to HD

Demand for HD is growing rapidly in Russia, with 10.2 million homes already receiving services as of the beginning of this year.

Quoting J’son & Partners,Vedomosti reports that while the number of pay-TV subscribers grew by only 7.1% to 36.7 million in 2014, HD penetration in the pay-TV subscriber base increased from 20.2% to 27.1% during the year.

Tricolor TV remained the leading provider of HD services in Russia, claiming a 45% share of the market as of the beginning of this year. Rostelecom was in second place with 25%, followed by Vimpelcom with 10%.

Meanwhile, other statistics, produced by Telecom Daily, give Tricolor TV a 41% share, with Rostelecom and MTS claiming 25% and 11.5% respectively as of the beginning of the second quarter.

They also say that as of Q1, there were already 12 million HDTV subscribers in the country, up from 9.9 million a year earlier.

Positive outlook for Russian pay-TV

Pay-TV penetration in Russia is set to reach 81% in 2019, by when there will be 45.2 million homes receiving services.

According to data produced by J’son & Partners Consulting and published by Mediasat, the there will be 18.9 million cable TV homes, up from an actual figure of 18.3 million in 2014.

Satellite TV will meanwhile account for 18.5 million homes (14.5 million) and IPTV 7.8 million (4.7 million).

Pay-TV revenues are also set to grow steadily over the next few years, up from R66.5 billion (€1.2 billion) in 2014 to R93.8 billion in 2019. Cable TV will again be in top place (R35.9 billion in 2019, up from R32.5 billion in 2014), followed by satellite TV (R33 billion v R22.5 billion) and IPTV (R24.9 billion v R11.4 billion).

ARPU will also significantly increase over the five-year period, up from R66.5 to R93.8.

Looking at pay-TV market share among the leading players, Tricolor TV was in top spot in 2014 with 29.1% (28.8% in 2013), followed by Rostelecom with 21.1% (21.4%), MTS 7.5% (7.4%), ER Telecom 7% (7.1%) and Orion Express 6.9% (5.6%).

Cable had a 48.8% share of the pay-TV market in 2104 (51.4% in 2013), followed by satellite TV 38.7% (37.3%) and IPTV 12.5% (11.3%).