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Report: Netflix, Amazon Prime Video Projected to Leave Russia

11 Sep, 2017 By: Erik Gruenwedel

Global SVOD leaders Netflix and Amazon Prime Video are expected to abandon standalone-streaming service in Russia due to increased government regulation, according to a research report.

Citing new rules in Russia regarding foreign ownership (capped at 20%) of over-the-top video platforms with more than 100,000 subscribers, Digital TV Research contends both Netflix and Amazon would be forced to exit the market and license content via third parties as Netflix is doing in China.

“This is a major blow to their global ambitions,” Simon Murray, principal analyst at Digital TV Research, said in a statement.

Russia has an estimated SVOD sub base of about 6.8 million, according to DTVR. Excluding the region still leaves Netflix and Amazon Prime Video with 35% and 12% market share, respectively, in in 21 countries comprising Eastern Europe.

The firm forecasts 16.5 million SVOD subs across 22 Eastern European countries by 2022, quadruple the 4 million recorded at the end of 2016.
SVOD will become the region’s largest OTT revenue source in 2017, with sales reaching $1.3 billion by 2022 (57% of total OTT revenue) — up from $190 million in 2016.

OTT TV episode and movie revenue for 22 Eastern European countries will reach $2.23 billion in 2022 — four times the $552 million recorded in 2016. Russia will account for 46% of the region’s OTT revenue by 2022, with Poland generating a further 19%, according to DTVR.

A Netflix representative denied any plans to leave Russia.

"There is no change to our business in Russia," Bao-Viet Nguyen, with corporate PR, said in an email.

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