Russian Online Video Market Booming, Becomes Biggest In Europe

New research by puts ivi.ru – a Video On Demand (VoD) provider in Russia of licensed content, both ad-sponsored and paid – as leader of the Russian market. However, the study from consulting firm iKS-Consulting was commissioned by ivi.ru, so we’ll have to take that with a grain of salt. That said, it does come up with a number of points worth noting about the VOD market in Russia, which is currently the biggest in europe.

(Note that ivi.ru has $40 million total in funding from Baring Vostok Capital Partners, ru-Net Holdings, Tiger Global Management, Prof-Media and Frontier Ventures).

To whit:

- Russia is the largest online video market in Europe with 60 million unique viewers

- Online advertising market grew by 27% y-o-y to approximately $2.2bln

- Online video advertising market grew by 67% y-o-y to approximately $88.7 mln

- The Russian VoD market more than doubled y-o-y to $50.5 mln (a 105% y-o-y growth in revenues)

- Top nine players control 97% of the Russian VoD market

- The ad-supported model accounts for 78% ($39.5 mln) of the market (74% growth y-o-y); while the payment model has grown more than four-fold and accounts for 22% ($11 mln)

- 100-200 mln video viewings are generated via each key player’s service monthly

- A third (24 mln users) of Russian population use the Internet to watch VoD services monthly

- In 2014, Russian VoD market is expected to grow by 75% to $88.7 mln and to reach $290.5 mln by 2018

iKS-Consulting also said ivi.ru, with a market share of 28% (by revenue) would make it the largest VoD service in Russia. For itself, ivi.ru claims to have doubled its revenues to $14.1 million (95% growth), doubled users to 30million per month (114% increase y-o-y) and doubled video viewings to 200 million per month (135% increase y-o-y). It’s also claiming to be the number one player by the total number of downloads of its mobile app on devices (smartphones and tablets) with 9 million downloads and the number one player by audience who watch video on Smart TVs, with 2million users monthly.

Russia is the largest online video market in Europe by audience with more than 66.5 million Russians.

According to iKS-Consulting, in 2014, the Russian VoD market will continue to actively grow by over 75% to $88.7 million and by 2018 will reach almost $290.5 million.

All this is being driven by paid-for video services (including new movie releases) and the decrease in online video piracy.

However, market consolidation and M&A are expected to be driven by both global and Russian Internet companies such as Google, Apple, Yandex, Mail.ru, including social networks like VKontakte and Odnoklassniki.