Russia is undergoing continued digital development, with growth across all pay-TV platforms as well as increasing uptake of smart TVs, according to the latest research by J’son & Partners Consulting, a leading Russian tech consulting agency. Improved telecoms infrastructure in rural and urban areas, increasingly affordable pricing, and a greater variety of digital offerings are the primary drivers behind this expanding market.
According to J’son & Partners, the base of Russia’s pay-TV subscribers will reach 40.9 million by 2018, with growth of 17% over 2013. The penetration rate of pay-TV services is forecast to rise to 75% by 2018.
Tricolor is the top pay-TV player, while cable is the dominant platform
At the end of 2013, the top three pay-TV players on the Russian market were Tricolor (10.1 million subscribers), Rostelecom (7.5 million) and MTS (2.6 million). Tricolor provides the lowest monthly pay-TV tariff, at less than $2 a month for an extended package.
The average number of TV channels included in a basic package varies from 25 to 114.
The highest penetration rate of pay-TV in Russia in 2013 was in the Northwestern Federal District, which includes the city of St. Petersburg, at 80.4%. The lowest penetration rate was in the North Caucasian and Siberian Federal regions, at 47% and 41%, respectively.
The total volume of the pay-TV market stood at $1.8 billion in 2013. The largest market segment was cable TV, at more than half of total volume, followed by satellite TV and IPTV.
Russian consumers increasingly opting for Smart TVs
Alongside a dynamic pay-TV segment, the Smart TV market in Russia is booming, as consumers appreciate the gadgetry and Internet connectivity of their TVs. In 2013, according to market research agency GfK Russia, 3.3 million Smart TVs were sold, which was just over a third of all flat-panel TVs.
According to J’son & Partners, by 2017 the figure sold will more than double to 7.2 million, representing 78% of all flat-panel TV sales. The available park of Smart TVs in Russia will reach 29.8 million installed devices by 2018, which is 22% of total TV stock in the country.
More value-added services and surge in IPTV will characterize market going forward
As the pay-TV market continues to expand, IPTV will be the standout performer, almost doubling in subscriptions over the 2013-2018 period. Competition from non-linear TV will also increase due to the rise in the broadband Internet penetration rate, with viewing videos online in great demand among the population. While still undergoing expansion, cable TV will see a noticeable slowdown in growth both in Moscow and in the regions.
Struggling for customer retention, most providers will offer an increasing selection of value-added services to subscribers, such as VoD, catch-up TV and alternative technologies, as well as expanding their channel line-ups with digital and HD packages. More partnerships and multi-platform offerings are also expected.
- To order the full version of this research or for more detailed information on the IT, telecommunication, high-tech and media markets, please contact Konstantin Ostrovsky [email protected].
- In partnership with comScore, Ernst and Young and The Next Web, East-West Digital News has released a report on the Russian online video market. You may download the executive summary by clicking here or the full version here.
