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Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
Television and on-demand audiovisual services in the Russian Federation
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Television and on-demand audiovisual services in the Russian Federation

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Prepared by Json & Partners Consulting for European Audiovisual Observatory …

Prepared by Json & Partners Consulting for European Audiovisual Observatory

Television and on-demand audiovisual services in the Russian Federation

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  • 1. Television and on-demand audiovisual services in the Russian Federation A report by J’son & Partners Consultingfor the European Audiovisual Observatory
  • 2. Conducted for European Audiovisual Observatory 2
  • 3. The structure of Russian television, 2010 Total households – 52,2 mln (100%) Households with TV – 50,6 mln (96,9%) Pay TV – 16,3 mln (31%) Cable TV Satellite TV 6,3 mln (12%) 9,6 mln (18%) IPTV Источник: J’son & Partners Consulting 0,44 mln (1%) Source: J’son & Partners Consulting Every third family in Russia watches pay TV. 3
  • 4. Classification of TV services and technologies 4
  • 5. Marketing and technological classification of TV services Why is new classification necessary?  The boom of new television technologies and services, abundant new marketing terms  Linguistic incompatibility of two fixedly approaching “continents” that are terrestrial and non-terrestrial TV  Forthcoming total TV digitalization in Russia and new approaches to the commercialization of TV services The example of linguistic confusion: What is pay TV?☹ Pay TV is television, a subscriber pays for! Definition in incorrect, because there is also a fee for conditional-free channels that propagate via networks of shared access and don’t relate to “pay TV”.☹ Definition is twice incorrect. Firstly, there are terrestrial services of “pay TV”, for instance in Pay TV is cable, satellite and IPTV! DVB-T networks. Secondly, cable and satellite TV provide such types of services that include free channels only.☹ Definition is incorrect, because “pay TV” services can be provided in analogue networks as Pay TV is digital TV! well.☹ Definition is close to the real situation in the Russian TV market, however there are also Pay TV is TV with conditional access! examples of “conditional-free TV” with conditional access. 5
  • 6. Marketing and technological classification of TV services Free, Conditional-free and Pay TV services Type of TV services Free channels Free TV Conditional-free TV Technical support Pay TV Paid channels Source: J’son & Partners Consulting The main players on the conditional-free and pay TV marketsIn Russia there is a significant volume of analogue TVconsumption. Many operators provide both digital andanalogue TV services, and they all have the analogue TVsubscriber base, significantly exceeding the number ofdigital TV subscribers. 6 Source: J’son & Partners Consulting
  • 7. Marketing and technological classification of TV servicesМаркетинговая и технологическая классификация ТВ Linear and non-linear TV Linear TV Non-linear TV User terminals Closed systems Open systems Closed systems Open systems IPTV Cable TV Analogue VOD for TV Connected TV TV terrestrial TV Satellite TV Digital TV OTT PC, PAD IPTV Web TV VOD for PC Web-portals VOD for Smartphones TV to mobile smartphones Video to mobile Source: J’son & Partners ConsultingNew technologies and programs and new types of subscribers’ devices move TV market more and more actively to non-linear TV 7
  • 8. Linear terrestrial TV 8
  • 9. Linear terrestrial TV Analogue broadcasting in Russia Average daily audience federal channels, October, 201118,0 16,4 15,5 15,316,014,012,010,0 8,1 7,9 8,0 6,0 Terrestrial broadcasting is financed by state 3,8 3,4 4,0 2,3 2,1 2,1 1,9 1,8 1,6 1,6 1,3 0,9 0,8 0,8 0,7 budget and advertisers’ fees 2,0 0,2 0,0 Coverage of Russian population by Shares of advertising expenditures of countries, 2010 terrestrial analogue broadcasting Japan 40% 28% 16% 12% 4% 5 channels 33,0% 4 channels 56,1% Poland 49% 21% 14% 11% 5% 3 channels 73,2% Germany 24% 62% 5% 5% 4% 2 channels 96,7% Great Britain 29% 33% 29% 6% 3% 1 channel 98,8% Russia 54% 16% 11% 14% 5% Source: Rospechat’ TV Print Internet Outdoor Radio 9 Source: J’son & Partners Consulting
  • 10. Linear terrestrial TV Switching to digital terrestrial broadcasting Ministry of communication has expressed the need to transition to digital broadcasting standards Risks of FTP implementation: 1997  Financial riskThe first in Russia zoneof experienced digital R & D work "Development of a comprehensive project to establish a  Lack of overall detailed action planterrestrial TV in Nizhny 1998-1999 system for digital television  Delay of legislative regulation and absence ofNovgorod broadcasting in Russia" digital standards 2000 The first samples of the  Compressed transition period digital set-top box DVB T "Elf"  Substantial technical problems with Experimental Zone for digital 2001 implementation of FTP terrestrial and cable TV in St.  Insufficient information campaign to support Petersburg 2004 the transfer to digital format Russian Federation Government Decree "About introduction of the 2005 Russian Federation in the European system of digital television DVB» The first edition of the project To overcome the above mentioned problems, it "Development Programme in the Russian Federation the European seems appropriate to examine and use the system of TV broadcasting DVB» experience of countries that have successfully completed the transition to digital Federal Target Program (FTP) for the development of broadcasting for 2009- 2015 was adopted in November 2009 broadcasting. 10
  • 11. Linear terrestrial TV Partners and regional broadcasting «Single upstream» «Double upstream» Federal HeadEnd Federal HeadEnd Local Broadcasting Network Local Regional Local Broadcasting HeadEnd Broadcasting Network NetworkThree groups of central channels: Number of Subjects of Regional programs,- Russian universal channels (“Channel One”, “Russia 1”, NTV, “Channel TV channel partners RF hours5”),- Federal network channels (“TV-Center”, CTC, TNT, “REN TV”), one of СТС 191 83 2,6which is universal - “REN TV”, ТNТ 522 79 3- Specialized terrestrial channels (“Russia 2”, “Russia K”, “Domashniy”, RЕN-TV 1100 80 3“MUZ”, MTV, “TV3”, “Peretz”, “Russia 24”, “Euronews”, “2x2”, “Zvezda”, ТV-Center 241 33 1,6“Semerka”). Zvezda 335 77 3 Source: NAT 11
  • 12. Linear non-terrestrial TV 12
  • 13. Linear non-terrestrial TVCurrent Pay TV subscribers base evolution Dynamics of Pay TV market volume in Russia andin 2010 – H1 2011, million households Federal districts, 2009-2010 2010 H1 2011 1400 SOUTH Total 16,3 18,1 1203 Satellite 6,3 7,5 FAR EAST 1200 Cable 9,6 9,9 89 mln USD IPTV 0,44 0,7 1023 56 SIBERIA 1000 80 107 Source: J’son & Partners Consulting, companies data 47 116 95 URAL Russian TV market structure by technologies, 2010 800 39 106 31 249 NORTH CAUCASUS 600 224 Analog VOLGA cable 137 85% Satellite 400 111 34% Fix NORD-WEST 66% IPTV Digital 200 411 4% cable 329 CENTER 11% 0 Pay TV market 2009 2010 Source: J’son & Partners Consulting fieldwork data, companies data volume in RF, mln USD Source: J’son & Partners Consulting 13
  • 14. Linear non-terrestrial TV Penetration and Pay TV operators in Russia, 2010In Russia, the highest Pay TV penetration areas generally match the location of the economically developed centers. The onlyexception is the Moscow (24%), Moscow Region (33%) and Kamchatka Territory (65%). 14
  • 15. Linear non-terrestrial TV Subscribers’ equipment Sales of subscribers’ equipment in physical terms by types, mlnSales of subscribers’ STB equipment in money terms, mln USD units 0,1 246 0,2 0,1 0,5 0,6 0,6 0,2 0,3 0,3 171 185 0,2 151 152 1,9 90 0,1 1,7 1,5 1,6 1,6 0,2 0,52007A 2008A 2009A 2010A 2011E 2012F Source: J’son & Partners Consulting 2007A 2008A 2009A 2010A 2011E 2012F Satellite Cable IPTVThe structure of sales of subscribers’ equipment in 2010 Source: J’son & Partners Consulting The share of leading players of the Russian market of STB equipment Smartlabs 7% HUMAX Elecard 11% 4% COSHIP Realcube 2% 2% General Satellite 28% ZYXEL Другой Другое 2% 15% 3% AMINO ZTE 3% Digi Raum 3% Electronics 35% Source: J’son & Partners Consulting Source: J’son & Partners Consulting 15
  • 16. Linear non-terrestrial TV Digital non-terrestrial linear televisionOperator Package Pay TV channels breakdown by provenance and localisation degree Russian- language channelsThe most popular translated TV channels:Animal Planet, Discovery Channel, National Geographic 19%The most popular untranslated TV channel: 55% TranslatedBBC World channels 26% UntranslatedThe most popular Russian-language TV channel: channelsRBC-TV Source: J’son & Partners Consulting, company dataOperator Pay TV channel bundling by categories, 2010 Adult; 1% Entertainment; Education; 20% 25% This fact highlights a considerable difference Music; 11% Sports; 11% between Russian viewers and their Western counterparts who prefer movies and sports Ethnic; 0,4% Movies; 13% channels Childish; 8% Information; 9% Source: cableman.ru 16
  • 17. Linear non-terrestrial TV Forecasts of linear TV development in Russia by 2015 The definition of “digital dividend” Pay TV subscriber base dynamic in Russia, 2009-2015 digital dividend 40% 42% 25,0 45%Spectrum 37% Existing 32% 35% 40% 20,0 30% 35% analogue Existing 27% 30% channels program 15,0 25% channels 21,1 22,5 23,6 20% 10,0 18,0 19,4 14,5 16,3 15% 5,0 10% Analog Digital Time 5% broadcasting Transition broadcasting 0,0 0% 2020 2009 2010 2011 2012 2013 2014 2015 Source: ITU Source: Json & Partners Consulting By 2016 four of ten households will use pay TV 17
  • 18. Linear non-terrestrial TV Forecasts of linear TV development in Russia by 2015Forecast of Pay TV subscriber base structure in Russia by Federal Districts, 2009-2015 100% SOUTH 90% FAR EAST SIBERIA 80% URAL 70% NORTH CAUCASUS 60%Central Federal District has the largest subscriber VOLGAshare and, according to estimated of J’son & 50%Partners Consulting, the share of this district will NORD- 40%be growing and by the end of 2015 will reach 37% WESTof the total Pay TV subscriber base 30% 20% CENTER 10% 0% 2009 2010 2011 2012 2013 2014 2015 Source: Json & Partners Consulting 18
  • 19. Mobile TV 19
  • 20. Linear television in Russia Mobile linear television The subscriber base and penetration of mobile TV in Russia, thousand of people 6000 5772 10,8% 12% 5038 5772 6000 9,5% 12% 5038 10% 5000 4164 4164 8,1% 10% 4000 10,8% 8% 4000 3152 3152 6,2% 9,5% 8% 3000 2136 8,1% 6% 6% 1274 21364,4% 6,2% 3,5% 4,0% 4% 2000 2,9% 4,0% 2000 660 1274 2,9% 2,2% 3,5% 4% 4,4% 1,5% 2,9% 1000 0,9% 2,2% 2% 660 0,4% 1,7% 2,9% 1,7% 1,5% 2% 0% 0 0,9% 0,4% 2010E 2011F 2012F 2013F 2014F 2015F 2016F 0 0% 2010E 2011F 2012F 2013F 2014F 2015F 2016F Subscriber base, thsd subs Penetration from cellular subscribers, % Penetration from wireless BBA subscribers, % Source: Json & Partners Consulting The dynamics of mobile TV subscriber base by FD, thousand of people 2010-2016 NORTH CENTER NORD-WEST VOLGA URAL SIBERIA FAR EAST SOUTH2016 CAUCASUS 1648 635 578 388 1091 409 640 383 367 131 235 1372011 141 91 86 86 0 1000 2000 3000 4000 5000 6000 Source: Json & Partners Consulting 20
  • 21. Non-linear TV 21
  • 22. Non-linear TV in Russia Closed systemsThe main players of VOD market in closed systems Providers Devices VOD type TV sets PPV, NPVRBeeline Smartphones PPV, SVOD The main business model used by TV sets PPV, NPVRМТSMegafon Smartphones Smartphones PPV PPV, SVOD providers is PPVAKADO TV sets PPVRostelecom TV sets PPV, NPVR, PVR, SVODBeeline TV sets PPV, NPVR Source: companies dataIndicators of VOD in closed systems by devices in Russia, 2010-2011 PPV per unit of content, RUB, 2011 Number of subscribers, mln of people Number of projects 14 100 12 5,3 8 3 4 1,5 0,7 1,3 2 2 89 2010 2011 2010 2011 VOD for TV VOD for smartphones VOD for PC Source: J’son & Partners Consulting 22
  • 23. Non-linear TV in Russia Open systems Shares of content segments at the Russian Forecast of Web TV market, million USD, 2010-2016 market, 2010 music non-linear 8% Mob TV 4% games and 17 TV applications broadcasting in the 9Market volume is 6% vendors shops 41 799 mln USD information 12% 0,1 0,2 0,72 1,7 3% RBT pictures 41% 6% 2010 2011 2012 2013 2014 2015 2016 games 20% Source: J’son & Partners Consulting Video advertising market structure in 2010, million USD; % Rutube.ru 6,54 4,9 TvigleAccording to forecasts of J’son & Partners Consulting, 24% ВГТРКInternet video advertising market in Russia will increase from 32% Mail Group2.4% of Internet advertising market in 2010 to 12% in 2016. It 2,5 Smotri.com Ivi.rucorresponds with the gap in share of video advertising in the 0,2 12% Russia.rustructure of internet advertising market as a whole of USA 1% 0,8 Zoombyindicators for three years. 0,9 1,2 1,8 Другие 4% 1,4 Others Others 5% 6% 9% 7% Source: J’son & Partners Consulting 23
  • 24. Non-linear TV in Russia Open systems Successful projects of paid open online-cinemas GetMovies.RU NOW.RU Project start: 2006 VIDEO.RU Project start: March, 2011 The first full-fledged legal digital video store in RuNet. Project start: July, 2007In July, 2011 the portal has signed an agreement with the Daily audience is 50,000 users. Video.ru became the first portal to offer video content oncompany "Russian World Studios“; due to that for the first The only project that offers HD Ready video. the terms of the unlimited access.time in Russia films will be legally available online earlierthan in cinema theatres OMLET.RU TRAVA.RU Project start: May, 2009 Project start: June, 2010 Omlet.ru became the only Runet web site, providing the Multimedia portal of licensed entertainment content "Trava.ru" possibility of online-broadcasting and purchase of the is available on browsers and all popular mobile platforms. content on the VOD model without advertising. Project is based on "cloud technology". Source: companies’ data 24
  • 25. Non-linear TV in Russia Forecasts of Non-linear TV development in Russia by 2015Forecast of subscriber base and revenue from the sale of services and terminal equipment for Non-linear60 2009-2015 TV, 200 185,72 70 171,2 17751,6 180 159 165 152,7 156 46,5 51,6 60 50 160 41,1 46,5 35,7 50 140 30,5 41,1 40 200 120 35,7 40 171,2 185,72 30,5 30 150 100 25,6 30 80 18,9 159 165 177 100 20 25,6 152,7 156 60 20 50 10 18,9 40 10 20 00 0 0 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 Sales of services and terminals, mn USD Non-line TV subscriber base, mn people Source: J’son & Partners Consulting Revenue from the sale of non-linear TV services in 2010 amounted to only 0.4% - 0.8 million dollars. This is primarily due to the newness of the format, poor consumer culture of paid digital content and the absence of its broad relevant base. 25
  • 26. Questions are welcome! DESIGNED BY J’SON & PARTNERS 26

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