According to an analyst forecast by Digital TV Research, Netflix and Amazon Prime Video will withdraw from the Russian market because of Russia's new OTT platform regulations.
It is predicted that by 2022, Netflix and Amazon's services will greatly promote the growth of SVOD business in Eastern Europe, with the exception of Russia.
By 2022, Netflix is ​​expected to have 3.43 million subscribers, nearly three times 2016, and Amazon will have 1.12 million.
Number of SVOD subscribers for each platform (in millions)
However, these data do not include Russian users. Russia's recently introduced regulations require that foreign digital video platforms with more than 100,000 subscribers be limited to less than 20%, similar to the regulations of linear television networks. The laws of the linear television network had allowed a group of broadcasters to withdraw from the Russian market.
Simon Murray, chief analyst at Digital TV Research, said: "We think this will force Netflix and Amazon Prime Video to abandon their independent platforms. This is a major blow to the globalization ambitions of the two companies."
“The two companies are likely to transfer their original content to the Russian local platform. Amediateka has already launched the 'HBO Home' brand, and other platforms may also do so. Netflix has also established similar cooperation with China's iQIYI. ."
The loss of Russian revenue will be a major blow, and in the same strict media regulations, Netflix and Amazon have not been able to launch independent services.
By 2022, after removing 6.8 million SVOD subscribers from Russia, Netflix is ​​expected to control 35% of the Eastern European 21 countries. Amazon is 12%.
By the end of this year, SVOD will become the largest OTT service in Eastern Europe. The revenue will reach 1.3 billion U.S. dollars by 2022. In contrast, revenue at the end of 2016 was only 190 million U.S. dollars (occupying 34% of OTT's total revenue).
Digital TV Research predicts that the revenue of OTT TV and movies in Eastern Europe will reach US$2.23 billion by 2022, which is 4 times that of 2016. Russia will occupy 46%, while Poland will rank second with 19%.
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