According to IT market players, the bill on the regulation of online cinemas will slow down their development


    After the closure of large pirated sites with video content, the income of online cinemas in Russia increased significantly. However, some of them are developed by foreign companies, or at least are service investors. And in the current conditions, foreign financing is far from always beneficial. At least that's what experts say.

    In the summer, the Media and Communications Union (ISS) developed a bill to regulate online cinemas. The ISS considers one of the important measures to limit the share of foreign owners: foreigners will not be able to own more than 20% of such companies. In addition, the bill entrusts search engines with responsibilities for the moderation of content. True, the amendments will not affect the services on which the content is posted by users, as well as sites with a daily audience of less than 100 thousand people.
    In addition to telecom operators, the ISS includes the largest media holdings - Gazprom-Media (GPM), the National Media Group, and CTC Media. Of the members of the ISS, only GPM occupies a significant market share, all the rest are independent projects.
    As Vedomosti sources previously reported , large holdings intend to launch their own project in the field of online video. It cannot be that in this way they try to “remove” competitors.

    As early as September, a working group on communications and information technology of the Government’s Expert Council criticized the bill. According to experts, the ISS bill does not solve the current problems of the industry, the measures proposed in it are redundant, and some of them are subject to incomprehensible logic.

    They consider the restriction of foreign ownership of a corrupt norm, leading to monopolization of the market. It limits companies in choosing a source of financing, Vedomosti wrote, citing experts.

    If the bill is adopted in its current form, many market players will begin to have problems. And this will allow pirate sites to revitalize again.

    Deputy Minister of the Ministry of Communications Alexey Volin supports the ISS initiative. He also shares the position with the ISS that projects like the American online movie theater Netflix threaten “import substitution prospects” in Russia. According to him, the project is criticized by people who are not deeply immersed in the problems of the industry.

    This conversation with Volin took place in September. And now the “people” and representatives of the IT market who are not members of the ISS, nevertheless plunged deeper into the problems, but their attitude towards the bill is still negative.

    On October 11, a meeting was held between representatives of Yandex and the ISS. The amendments to the laws “On Information” and “On Communication” are excessive, they will negatively affect competition in Russia, representatives of the IT company explained. The interlocutors did not reach agreement.

    Now Yandex and Mail.Ru Group are preparing a joint letter to the Ministry of Communications and Roskomnadzor explaining the position regarding the bill.


    Control over communications is already regulated by existing legislation, we are convinced in Yandex. According to the company, the ISS proposals will only complicate and limit the work of services and provoke an outflow of users to foreign projects.

    So, many Russian services have foreign investment, and therefore foreign shareholders. “The need for restructuring owners may lead to an outflow of investments and their withdrawal from the Russian market. This will limit the Russian audience’s access to licensed video content and lead to an outflow of users to pirated resources, ”Kommersant quotes Yandex experts.

    In addition, because of the “vague” wordings, the bill may affect almost any service, including search engines, they are afraid of in Yandex. The document, for example, imposes responsibilities on search engines for the moderation of content, which "contradicts common sense."

    Last week, the ISS document was criticized by Vladimir Gabrielyan, vice president and technical director of Mail.Ru Group. “We do not think that the bill meets its goals, which can already be achieved long ago by the previously adopted norms of other laws. We are also not sure that the result will not be a limitation of national services and companies. It is gratifying that the discussion has begun, let's see if the position of Internet companies will be heard, ”the Mail.ru Group noted.

    The Director General of the Internet Video Association Alexei Byrdin believes that the problem of control over such services can be solved by requiring them to register a Russian legal entity.

    “So, when the 20% restriction of foreign capital in the media came into force, the restriction of competition did not happen, it will not happen here. In addition, we previously explained that the requirements of the bill will not affect sites with user content, ”said the representative of the ISS. Work on the bill will continue, the ISS said: “The meeting with representatives of Yandex and Mail.Ru Group was very important: with their help we can develop a balanced bill.”

    In the meantime, the Russian online movie theater market is growing and believes in the best.

    Tvzavr online cinema concludedagreement with Tricolor TV on integration into its new video service kino.trikolor.tv, RBC was informed in the press service of Tvzavr.

    The plans of Tricolor TV to launch its online cinema on the portal kino.tricolor.tv became known in early October. The project was launched in test mode and will officially begin work in November.

    According to TelecomDaily, in 2015 Tvzavr was the fourth online cinema in Russia in terms of the number of unique content units in the video library - 40 thousand, behind Megogo from 77 thousand, iTunes from 75 thousand and ivi from 45.1 thousand films and TV shows.

    Amedia TV came out in July 2016operating profit. Compared to last year, Amediateki’s customer base and revenue increased by more than 70%. More than half of Amedia TV’s revenues come from the OTT project. Premium services (Amediateka online project and Amedia Premium TV package) have connected 500 thousand subscribers.

    In October, it also became known that the Netflix online cinema first bought a Russian series. Production company Sreda Alexandra Tsekalo sold the Major series to an American online cinema. The appearance of the series on the platform is expected in the fall of 2016 under the name Silver Spoon.

    The largest independent online movie theater TMT Consulting and J'son & Partners call Ivi. According to the SPARK-Interfax database, service revenue in 2015 increased by 45% and amounted to 1.06 billion rubles. The company's net loss remained at the 2014 level - 328.9 million rubles.

    The second most profitable online cinema in 2015 was Okko with revenue of 650 million rubles.

    The revenue of the legal entity of the third largest Megogo cinema - Megogo LLC - in the same year amounted to 316 million rubles, follows from the SPARK-Interfax database. According to the company itself, this figure is higher - 419.4 million rubles.

    A representative of the Tvzavr video service told Vedomosti that in 2015, service revenue, excluding VAT, more than doubled and reached 180 million rubles.

    Analysts call this segment one of the fastest growing in the Russian advertising market and estimate it at 3-5 billion rubles.



    According to J`son & Partners, the online movie theater market in Russia in 2015 grew by 14.7% to 5.9 billion rubles. More than 5 billion rubles of revenue came from advertising. According to TMT Consulting, which is quoted by Vedomosti, the legal video services market in Russia in 2015 grew by 32% and reached 3.4 billion rubles.

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