AFK Sistema, a Russian LSE-listed holding, announced last week that it has invested in Stream.ru, a paid video content portal formerly known as Omlet.ru. Stream.ru was launched in 2009 by MTS, a Sistema subsidiary and a leading Russian mobile operator.
With a reported investment of 496 million rubles ($15 million), Sistema now owns 55% of the company, while the MTS stake has shrunk to 45%. Sistema Mass Media, a separate AFK subsidiary set up to produce and distribute content, will take on day-to-day management of Stream, the new investor said.
Following its rebranding, Stream.ru needs new funds and expertise to gain a firm foothold on Russia’s vast video and audio content playground – this is how MTS president Andrey Dubovskov explained the long-awaited move, adding that with the newly adopted roadmap for Stream’s development, MTS will retain influence on its asset.
Stream.ru has been building itself up by aggregating licensed content from major international studios such as Paramount Pictures, Disney, Universal Pictures, Warner Bros Entertainment, Sony Pictures Entertainment and some others. Originally designed for desktop computers and Smart TV devices of Samsung, Phillips, LG and Panasonic makes, Stream.ru is now accessible from smartphones and tablet PCs. Its catalog numbers more than 7,000 movies, and according to MTS the portal has in excess of 1.5 million unique visitors a month.
But Stream.ru competes with other paid video content sites, such as Now.ru, as well as with the ad-funded sites Ivi.ru, Tvigle.ru, and Zoomby.ru – not to mentionVkontakte.ru, Russia’s leading social network, which hosts a virtually unlimited amount of video content that is shared, sometimes illegally, by its users.
The Russian market is also being eyed by global video sites Hulu.com and Netflix.com.
