The streaming video giant must team up with a Russian company to continue to operate in the country beyond July 1.
Who will say Da to Netflix in Russia?
Under new rules recently adopted by the Russian government and signed into law by president Vladimir Putin, the streaming giant must find a local partner or, as of July 1, it will be shut off in the country.
On that day, a law comes into effect that limits foreign ownership to 20 percent for all online video services operating in Russia.
Netflix is reportedly in talks with several potential partners. While there’s been no official word so far, local video providers, as well as regional online giants are all positioning themselves for what they are depicting as the ultimate corporate win-win.
Here’s THR‘s run-down of the local suitors and their chances for winning over Netflix.
Russia’s largest online company, often dubbed “the Russian Google,” Yandex has recently expanded its operations beyond search to include a music streaming service and KinoPoisk, the local equivalent of IMDb.
The company has already struck licensing deals with several major local studios and TV networks, including Channel One, NTV, Mosfilm and Timur Bekmambetov’s company Bazelevs, to stream their video content online. A Netflix tie-in would be a logical next step.
“Yandex is open for partnership with rights holders and is already offering the direct licensing of content [for streaming on its platforms],” a spokeswoman for Yandex tells The Hollywood Reporter.
Advantage for Netflix: Yandex provides a massive, built-in audience in Russia and, with its current licensing deals, would help the U.S. giant skirt around rights issues concerning video content. KinoPoisk also provides a built-in promotional platform for Netflix shows.
Mail.Ru counts VKontakte, Russia’s Facebook and the country’s largest social network with nearly 100 million monthly users, among its assets.
The group already streams some licensed video content on its platform on a revenue-sharing basis with rights holders. Last month, VKontakte introduced a Spotify-style music streaming service with both subscription and advertising-sponsored tiers.
Advantage for Netflix: Access to social media users, the major consumers of online video in Russia.
One of Russia’s largest and best-known video services, Tvigle provides SVOD for smart TVs. The company has licensing deals with foreign content producers, including Hollywood majors, and its catalog features the likes of The Wolf of Wall Street and Apollo 18.
“In terms, of partnership [with Netflix], we would certainly have something to discuss,” Alexander Petrenko, Tvigle’s brand manager, tells THR. “There is a good potential for smart TV as there is no piracy in that segment, and that audience is prepared to pay for content.”
Advantage for Netflix: Tvigle’s main strength is its strong presence in the smart TV segment, as well as reduced dangers of piracy, otherwise rampant in the Russian market.
Another major online video player, TVZavr boasts a monthly audience of 25 unique users.The company’s catalog features a balanced selection of Hollywood movies, such as Drive and La La Land, as well as local fare.
“TVZavr has a large audience in Russia and substantial amount of localized content, as well as a video broadcast platform and its own CDN [content delivery network],” Marina Surygina, TVZavr’s general director, tells THR.
“Synergy with Netflix’s product offer and marketing experience could lead to the creation of the biggest player in the Russian market,” she adds.
Advantage for Netflix: The company’s main advantage would be TVZavr’s stand-alone video player and independent content delivery network.
One of Russia’s oldest online video services, ivi.ru was the first local company in the segment to secure deals with the Hollywood majors. Its licensing agreements with 20th Century Fox, Walt Disney, Sony Pictures, Warner Brothers, Paramount Pictures and NBCUniversal date back to 2012. Among the more recent titles the video service has on offer are Now You See Me 2 and Gods of Egypt.
Last year, ivi.ru doubled its number of paid users, to 350,000.
Advantage for Netflix: A solid base of paying users and the service’s functioning mobile app are their main competitive advantages for Netflix.