Russian Video Portals

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The Internet industry in Russia is growing as fast as in many developed countries (USA, Great Britain, Germany), or maybe even faster. This is driven by many factors: a huge audience, broadband adoption and electronic commerce. Web projects in Russia are often following the trend of their Western counterparts. This was discussed at the recent TechCrunch Moscow 2010 conference. As the audience here is largely Russian rather than English-speaking, most major Internet video projects have their Russian implementation. This is unlikely to happen in most of European countries, since the native audience is not so large there and the costs of acquiring rights to the content most probably will not pay off (Hulu model). In this article, we are going to discuss Runet’s largest online video projects.

In the Russian Internet video market, the copyright holders are not so highly aware of video content security as in the West. This is most likely a temporary phenomenon, though.

The most famous Russian online video portals are:

  • RuTube – free ads based video hosting
  • NewsTube – ads based news video hosting
  • NEWS – news portal of the All-Russian State Television and Radio Broadcasting Company (VGTRK)
  • IVI – the first Hulu-like service in Russia. “Prof-Media” has recently acquired 25% of IVI.
  • Zoomby – the second Hulu-like service in Russia and the first counterpart of the BBC iPlayer. This video portal combines an extensive library of premium video content and TV catch-ups.
  • TVigle – an interesting video project combining premium video content of famous studios with its own video stories. This is an independent ads-based portal.
  • VideoMore – this project was launched by STS, a highly popular youth TV channel. The video portal hosts STS content and enables social features for the audience.
  • Omlet – a major online project of Russia’s largest telecom operator MTS NYSE:MBT, combining paid and free promotional videos.
  • YaTV – online television similar to LiveStream.com, but having substantial variations. It is focused on online streaming. Online streaming is finally gaining momentum in Russia, although somewhat later compared to the West.

However worth mentioning in this context are such major video hosting sites as Vkontakte and Mail.ru, they are often recalled in connection with anti-piracy campaigns of large copyright holders.

Development of online video portals in Russia is affected by heterogeneity of Web access (high-speed Internet only in major cities and poor connectivity in between). Here are the main trends in the market:

  • Efficiency – looking forward to the technologies and mechanisms to improve efficiency (cost efficiency, primarily). Such technologies are CDN and P2P video content delivery. More rigorous financial models can be used to check cost efficiency of HD video delivery.
  • Devices –expanding the range of supported devices (iPhone / iPad / mobile / TV). The first formal announcements of iPad support appeared before iPad was officially launched in Russia. New Web video portals have even emerged, focusing on TV and mobile devices.
  • Budgets – the growth of budgets allocated for online multimedia projects and online advertising. Just as across the globe, the advertising budgets are following the viewer’s eyes and going online. Therefore, the copyright holders are all growing more enthusiastic to online media, and advertisers are more willing to invest online. That’s why IVI and Zoomby are enthusiastic with their pure ads based models though it is treated with skepticism by the Western investors.
  • Competition – the industry is highly competitive, flooded by telecoms, media companies, copyright holders and traditional Web companies. Telecoms have so many users, right holders have a lot of interesting content, while Web companies have a great expertise in the Internet environment.
  • Piracy – there is a high level of piracy online connected to torrents and public video hosting. That’s why Web users do not have a stable habit to pay for the content. However, a series of measures have been taken to remedy the situation, so it is going to return to normal gradually. At the moment, the only more or less feasible business model is ads based.

Unfortunately, some important aspects have been neglected in the market. For instance, no large online video portal in Russia is using advanced Web analysis (audience count is definitely not enough). Someone might still go this direction and gain a first mover advantage.

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