This document summarizes the pay TV and video-on-demand (VOD) landscape in Russia. It notes that the market is divided between operator-based pay TV platforms and online VOD services, with the pay TV market being dominated by a few major providers serving over 36 million households total. It then discusses several of the major pay TV providers' VOD platforms and subscriber numbers, as well as estimates of the overall VOD market size in Russia. Finally, it outlines CTI's experience providing VOD content management services to pay TV operators, including its direct studio contracts and content deals that help achieve higher VOD revenue per user than competitors.

1. CTI
VOD Services for Russia & CIS
November 25th 2014

2. 1.
Pay TV and VOD landscape in Russia

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Russian VOD Market
Divided into 2 diverse categories
• Operator-based (Pay TV)
• Online VOD (B2C, OTT)
• Predominantly AVOD
• Fierce competition among a few venture start-ups
• IVI.RU
• PLAY (OKKO TV)
• ZOOMBY.RU
• AYYO etc.
• All of them constantly raising new capital to finance and still in
the red, some (like NOW.RU) virtually defunct

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Pay TV market in Russia 2014
Pay-TV providers Subs (HH) Share, % Type
Tricolor TV 10 560 000 29 DVB-S
Rostelecom 7 705 000 22
IPTV, DVB-C, Analogue
Cable
MTS 2 595 000 7
IPTV, DVB-C, Analogue
Cable
ER-Telecom 2 650 000 7
DVB-C+IP, DVB-C,
Analogue Cable
Orion-Express 2 320 000 6 DVB-S
Akado 1 129 000 3 DVB-C
Beeline 1 061 000 3 IPTV
Other 8 500 000 23
TOTAL 36 520 000
29%
21%
7%
7%
7%
3%
3%
23%
Tricolor TV Rostelecom MTS
ER-Telecom Orion-Express Akado
Beeline Other

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Operator VOD platforms in Russia
Pay TV VOD
Platforms Sep 2014
Comment:
(current) + immediate potential
Rostelecom 2 500 000 (IPTV)
Beeline-TV* 1 000 000 (IPTV)
Bashinformsvyaz‘* 250 000 (IPTV)
Stream-TV (MTS)** 150 000 (IPTV) + 2 000 000 for the coming hybrid platform
Tattelecom* 100 000 (IPTV)
ER-Telecom* 80 000 (DVB-C+IP) + 2 000 000 DVB-C subs
NetByNet* 15 000 (IPTV) + all the Megafon owned platforms
*Current CTI content service clients
** Prospective – content service deal being finalized

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Operator VOD Market Estimate
• Operator Yearly VOD ARPU = 0.3* – 1.5** USD
• Total operator VOD market = 1.5M – 4M USD
• Real figures are unavailable as operators decline to
reveal them (especially Rostelecom and Beeline*,
possibly because of the heavy losses in the investment
and return)
*Rostelecom insider data
**CTI managed VOD services
***at the moment CTI is only providing technical (encoding, meta data and promo) VOD services
for Beeline-TV

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VOD Market Growth Drivers
• Natural Extensive Growth
• Natural growth of VOD subs of existing platforms
4M hhs (2014) 7M hhs (2017)
• Convergence of existing linear Pay TV platforms
30M hhs (2014) of linear subs (DVB-S, DVB-C platforms)
• Intensive Growth
• Driving up the sales and VOD ARPU 1.5 USD +
• Operator VOD market estimate (2017) = 60M USD
825%Growth

8. CTI
IPTV and VOD experience & practice

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CTI@ Interactive TV services
• CTI is a pioneer of IPTV in Russia
• We designed and installed the first IPTV solution for
Stream (MTS) in 2005
• Besides technology we are providing full content
management services (VOD) for 3rd party platforms
(operator based IPTV/ hybrid)

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A brief history of content services
• CTI went into content aggregation business in 2009
• Initially on the request of existing technology clients
• Initially content services were available only when coupled with
technology (MW) platform
• From the beginning CTI adopted the policy of providing full-
range service (studio deals + file management & encoding +
meta data & promo management + reporting & royalty)
• In 2013 we changed the “platform + content” only
policy, bringing ER-Telecom as the first platform with
3rd party technology solution as content client

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Content services matrix
Negotiating deals
Programming the Libraries
and Packages
TVOD + SVOD
Technical provision ( source
files, editing and encoding,
encryption)
Delivery and Storage
On-air promotion
Trailers and promo spots
Barker channels
Meta data
Storefront management
Analysis of sales and sales
stimulation
Reporting and Royalty
Processing
Product
(Technical)
Provision and
Delivery
Promotion Pricing
Reporting, Analysis,
Storefront
Management

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CTI@VOD Market
• CTI is the #1 VOD aggregator in Russia & CIS
• Direct Major Studio contracts besides CTI
• Only at the “Big 3” – Rostelecom, MTS (in negotiations with CTI) and
Beeline (CTI technology management client)
• CTI client platforms = #1 in VOD ARPU
• 1.5 USD vs 0.3 (at Rostelecom)
• CTI has better deals with studios at the market
(in terms of MGLF ratios, license windows etc.)

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Current content clients
Full VOD clients = appx 500 000 subs
Full technical
management of
VOD platform
30% of Pay TV VOD Universe in Russia

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Pending deals…

15. Thank you!
Tel.:+7.495.784.73.13
a.vdovin@cti.ru
http://www.cti.ru/en