The European Audiovisual Observatory, part of the Council of Europe in Strasbourg, has released an annual report on Russian TV. This year’s report on pay-TV and cord cutting was written by J’son and Partners Consulting and presented at the Observatory’s Moscow conference.
1. Russian pay-TV market
By the end of 2018, 43.2 million viewers were subscribed to pay-TV services in Russia, 3.1 per cent more than in 2017. Excluding double-counting due to the usage possibility of various methods of pay-TV connection in one household, the number of households connected to pay-TV was 35-36 million, or 62-63 per cent of the population. Growth over the previous year amounted to 1 per cent. J’son & Partners Consulting estimates that in 2018, pay-TV revenues amounted to 95.3 bn Rub (€1.29bn), up 14.2 per cent compared with 2017.
2. Related services and their impact on the pay TV industry
Revenue of OTT TV services reached 8.7 bn Rub in 2018 and accounted for 9 per cent of pay-TV market revenues. See the distribution by category in the figure below. The baseline forecast by J’son and Partners indicates that the total revenue of OTT TV services will grow by 15.7 per cent per year (CAGR). By 2023, it could reach 23.4 bn Rub and will be only 5 times smaller than the Pay TV market. The subscriber base in 2018 represents 2-2.5 mln. Subscribers: 5-7 per cent of the pay-TV subscriber base.
3. The legal SVoD offer in Russia
The total market revenue of legal video services in 2018 was 24,86 bn Rub. During the period of 2019 to 2022, revenues will continue to grow with an average rate of 24 per cent and in 2022 will be over 58.7 billion Rub. SVoD revenue in 2018 was 6.03 bn Rub, representing 24 per cent of the total revenue of legal video services.
4. Cord cutting in Russia
If piracy of video resources can be eliminated successfully, the market revenue of legal video will rapidly increase, primarily by adding subscribers to SVoD services. As of April 2019, the number of cord-cutters (people who have left pay-TV services) represents 4.3 per cent of the population of major cities. This equates to 1.7 million people or 660 thousand households. Most viewers of professional online video seem to be unwilling to have a paid subscription. 17 per cent of them, however, have signed up for one at least once.