Netflix and Amazon or Exit the Russian Market

According to a forecast by Digital TV Research, Netflix and Amazon Prime Video are expected to exit the Russian market due to new regulations on OTT platforms. These rules require foreign streaming services with over 100,000 subscribers to limit their content to no more than 20%, similar to the restrictions placed on traditional TV networks. This has already prompted some broadcasters to leave Russia. The report predicts that by 2022, Netflix and Amazon will significantly boost the growth of SVOD (subscription video-on-demand) services across Eastern Europe, excluding Russia. Netflix is projected to reach 3.43 million subscribers by then—nearly three times its 2016 figure—while Amazon is expected to have 1.12 million. However, these numbers do not include Russian users, as both platforms may be forced to withdraw due to the new legal framework. Simon Murray, chief analyst at Digital TV Research, stated, “This regulation is likely to push Netflix and Amazon Prime Video to abandon their independent platforms in Russia. It’s a major setback for their global expansion plans.” He added that the companies might instead partner with local platforms, such as Amediateka, which has already launched the “HBO Home” brand. Similar collaborations have been seen in other regions, like Netflix’s partnership with China’s iQIYI. The loss of the Russian market could be financially significant for both companies. With strict media regulations in place, they won’t be able to operate independently there. After excluding Russia’s 6.8 million SVOD subscribers, Netflix is expected to hold 35% of the Eastern European market, while Amazon will capture 12%. By the end of this year, SVOD is set to become the largest OTT service in Eastern Europe, with revenue reaching $1.3 billion by 2022—up from $190 million in 2016. Digital TV Research also forecasts that total OTT TV and movie revenue in the region will hit $2.23 billion by 2022, quadruple the 2016 level. Russia is expected to account for 46% of this revenue, followed by Poland at 19%.

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