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best international practices
  with Russian approach
Legitimate video audience in Internet. Challenges
and perspecs of the developing market as users
see them.
Russian Internet Growth Dynamics
 2005-2011,Web of population 12+ лет.
 Источник: УИ TNS
                  % Index, Россия 100 000+,
     75%



     70%
                  Russia 100 000+                                                                                                  +4%
                  Moscow
     65%                                                                                                                                      68%
                  Saint Petersburg                                                                                                            65%
     60%          Ekaterininburg                                                                                                              65%
                  Novosibirsk                                                                                                                 63%
     55%                                                                                                                                      60%
                                                                                                                                   +8%
     50%



     45%



     40%

                                                                                                                      Annual growth
     35%



     30%
        Dec '05    June '06    Dec '06     Jun '07     Dec '07      Jun '08   Dec '08   Jun '09   Dec '09   Jun '10      Dec '10   June '11
Source: TNS User–centric, June 2011, Russia 100 000+, age: 12-54.
Daily share of TV, Internet and video
  services
               39 274 thsnds.




                                                                                                                  Each third
                                             26 955 thsnds.
                                                                                                                Internet user
                                                                                                                 visits video
                                                                                                                   services


                                                                           7 459 thsnds.*




                     TV                       Internet               Video Services*
TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+.
*Video services audience includes the age group between 12 and 54according to user-centric panel
TV and Internet Audience
               Population of Russia          TV audience           Internet users          Video services visitors

                                               12-17
                                            40%
                                                                                                            TV audience reflects
                                            30%
                                                                                                             the structure of the
                 55+                        20%                                18-24                        Russian population.
                                                                                                                Half of the TV
                                            10%
                                                                                                            audience are people
                                             0%                                                                of 45 and older,
                                                                                                            while video services
                                                                                                            visitors are generally
              45-54                                                            25-34                           people under 34
                                                                                                                 (69% of the
                                                                                                                  audience)

                                               35-44
Source: TNS TV Index, Web Index, june 2011, Average Daily Reach, Average Daily Reach, thousands of people, Russia 100 000+, age:12+.
TV and Internet Audience
                Population of Russia           TV audience           Internet Users          Video services visitors
                                                      males 12-17
                                                        30%
                                                        25%
                        female 55+                                                    males 18-34                            Females
                                                        20%
                                                        15%                                                                dominate in
                                                        10%                                                                TV audience.
                                                          5%                                                               While males
          females 35-54                                   0%                                   males 35-54                  dominate
                                                                                                                           among video
                                                                                                                             services
                                                                                                                             visitors
                   females 18-34                                                      males 55+


                                                    females 12-17
TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+.
*Audience of video services is based on age group of 12-54 year olds according to user-centric panel
TV and Internet Audience
Different age groups

                                                                          13 769 thsnds.
                                                                                                      12 395 thsnds.


     9 048 thsnds.
                                 8 183 thsnds.                8 292 thsnds.
                                              7 178 thsnds.
                 5 932 thsnds.                                                                                         Average daily Internet audience

                                                                                                                       Average daily TV audience
                                                                                           1 432 thsnds.




            12-24                       25-34                        35-54                           55+
                                                                                                           369 min.
                                                                              306 min.
                     225 min.
                                               250 min.                                                                Daily Internet browsing time

       90 min.                     100 min.                    103 min.                                                Daily TV watching time
                                                                                               n/a

TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+.
*Audience of video services is based on age group of 12-54 year olds according to user-centric panel
Challenges of VOD market in Russia
          81% of users cannot refuse from using pirate content in the future
           even if they face computer threats, criminal liability, and poor content
           quality*

          58% of users watch pirate content only because it’s free

          Some users are ready to pay for new content (71% for TV programs, 45%
           for feature films)

          83% of users do not mind advertisements in content as an alternative
           to payments



*According to the research by PWC «The speed of life»
Piracy on the Russian Internet and its International Impact

                                                    By the variety of time zones, Russia is
Russia is the biggest single source of
camcords in the European region                     leading in speed and quantity of
                                                    “pirated" content from TV broadcasters.




        • More than 550 big «Pirate» portals in the Russian language
 1


        • Russian portals are often used as the master to create foreign versions to initiate the piracy
 2        supply within other markets (eg. CIS, Korea, Turkey, Japan, China)


       • The Russian market of illegal content is paid great attention to and under scrutiny from the
 3       world’s leading film studios and is treated as a priority in the fight against piracy globally
NOW.RU – the First Portal in Russia operating
with SVOD Model.

Audience, Key Figures
Gazprom-Media Holding and TNT TV
Channel launch a paid, Internet video
 service www.NOW.ru. Any Russian
Internet user can watch an unlimited
      number of feature films,
    documentaries, TV series, and
cartoons by taking a subscription for
       499 roubles per month.
NOW.RU IS A BIG RUSSIAN PROJECT, CREATED IN THE BEST
WESTERN TRADITIONS, BUT WITH RUSSIAN FEATURES, SUCH AS:

• Exclusive content is available on a Subscription basis
  before TV air

• Free of charge movies are placed in a special section to
  attract users

• Pay-Per-View Movies are Premiere Movies

• The largest collection of legitimate movies and TV series
  on the Russian Internet, which is growing every day
DATA
• From the launch of NOW.RU more than 17 mln. people have
  visited the site

• Our users have watched more than 52 mln. Pages

• Recently the PPV views on NOW.RU are 6 times higher than
  the FREE views.

• As for the territory, at the moment, our primary audience is
  residents of the Russian millionaire cities

• Moscow and St. Petersburg audiences make up 27.7% in total
Audience Interest

More than 45% of the daily
audience is permanent
(returning audience)

The number of repeated
purchases in several
content categories is up to
79%
Consumer activity
!       Over the past month (from 27th August) the growth dynamics of subscribers
        in the category of "30 Days" was 76%.


                                                                              8%
                                             Conversion to purchases          7%
                                                                              6%
                                                                              5%
                                                                              4%
                                                                              3%
                                                                              2%
                                                                              1%
                                                                              0%
                               Instant Buy      In a month     In 2 months
* Registered users                                             (projection)
The VOD Market Development, New Formats and
Time-Window in terms of NOW.RU
How soon will the video content start earning money?

 !      70% of the Users are ready to wait no more than 1 month


                   40%
                   35%                                        37%
                   30%
                   25%
                   20%
                   15%                              18%
                                           15%
                   10%
                                  11%                                               11%
                    5%                                                   8%
                    0%
                                  1 day   1 week   2 weeks   1 month   3 months   6 months



!      76% of the Users are ready or partially ready to pay for the content appearing
       right after its TV or Theatre release.
Source: PWC «The speed of life»
Pre-Air content on NOW.RU. Traffic.



                                      Opening day

                                      Normal day
What do you look at when you choose a film?
Maximum Monetization
                           Income distribution depending on the model
           12
                $
           10

           8

           6
           TVOD
           4
             /                  SVOD/
           2
            DTO                  DTO                    AVOD
           0              30
 PRE-AIR
           1st release   days   2nd release   1 year
  Model
THANK YOU

Welcome to our CINEMA-Site

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Mip com2011 russianhouse_english

  • 2. Legitimate video audience in Internet. Challenges and perspecs of the developing market as users see them.
  • 3. Russian Internet Growth Dynamics 2005-2011,Web of population 12+ лет. Источник: УИ TNS % Index, Россия 100 000+, 75% 70% Russia 100 000+ +4% Moscow 65% 68% Saint Petersburg 65% 60% Ekaterininburg 65% Novosibirsk 63% 55% 60% +8% 50% 45% 40% Annual growth 35% 30% Dec '05 June '06 Dec '06 Jun '07 Dec '07 Jun '08 Dec '08 Jun '09 Dec '09 Jun '10 Dec '10 June '11 Source: TNS User–centric, June 2011, Russia 100 000+, age: 12-54.
  • 4. Daily share of TV, Internet and video services 39 274 thsnds. Each third 26 955 thsnds. Internet user visits video services 7 459 thsnds.* TV Internet Video Services* TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+. *Video services audience includes the age group between 12 and 54according to user-centric panel
  • 5. TV and Internet Audience Population of Russia TV audience Internet users Video services visitors 12-17 40% TV audience reflects 30% the structure of the 55+ 20% 18-24 Russian population. Half of the TV 10% audience are people 0% of 45 and older, while video services visitors are generally 45-54 25-34 people under 34 (69% of the audience) 35-44 Source: TNS TV Index, Web Index, june 2011, Average Daily Reach, Average Daily Reach, thousands of people, Russia 100 000+, age:12+.
  • 6. TV and Internet Audience Population of Russia TV audience Internet Users Video services visitors males 12-17 30% 25% female 55+ males 18-34 Females 20% 15% dominate in 10% TV audience. 5% While males females 35-54 0% males 35-54 dominate among video services visitors females 18-34 males 55+ females 12-17 TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+. *Audience of video services is based on age group of 12-54 year olds according to user-centric panel
  • 7. TV and Internet Audience Different age groups 13 769 thsnds. 12 395 thsnds. 9 048 thsnds. 8 183 thsnds. 8 292 thsnds. 7 178 thsnds. 5 932 thsnds. Average daily Internet audience Average daily TV audience 1 432 thsnds. 12-24 25-34 35-54 55+ 369 min. 306 min. 225 min. 250 min. Daily Internet browsing time 90 min. 100 min. 103 min. Daily TV watching time n/a TV Index, УИ Web Index, TNS User–centric, June 2011, Average Daily Reach, thousands of people, Russia 100 000+, age:12+. *Audience of video services is based on age group of 12-54 year olds according to user-centric panel
  • 8. Challenges of VOD market in Russia  81% of users cannot refuse from using pirate content in the future even if they face computer threats, criminal liability, and poor content quality*  58% of users watch pirate content only because it’s free  Some users are ready to pay for new content (71% for TV programs, 45% for feature films)  83% of users do not mind advertisements in content as an alternative to payments *According to the research by PWC «The speed of life»
  • 9. Piracy on the Russian Internet and its International Impact By the variety of time zones, Russia is Russia is the biggest single source of camcords in the European region leading in speed and quantity of “pirated" content from TV broadcasters. • More than 550 big «Pirate» portals in the Russian language 1 • Russian portals are often used as the master to create foreign versions to initiate the piracy 2 supply within other markets (eg. CIS, Korea, Turkey, Japan, China) • The Russian market of illegal content is paid great attention to and under scrutiny from the 3 world’s leading film studios and is treated as a priority in the fight against piracy globally
  • 10. NOW.RU – the First Portal in Russia operating with SVOD Model. Audience, Key Figures
  • 11. Gazprom-Media Holding and TNT TV Channel launch a paid, Internet video service www.NOW.ru. Any Russian Internet user can watch an unlimited number of feature films, documentaries, TV series, and cartoons by taking a subscription for 499 roubles per month.
  • 12. NOW.RU IS A BIG RUSSIAN PROJECT, CREATED IN THE BEST WESTERN TRADITIONS, BUT WITH RUSSIAN FEATURES, SUCH AS: • Exclusive content is available on a Subscription basis before TV air • Free of charge movies are placed in a special section to attract users • Pay-Per-View Movies are Premiere Movies • The largest collection of legitimate movies and TV series on the Russian Internet, which is growing every day
  • 13. DATA • From the launch of NOW.RU more than 17 mln. people have visited the site • Our users have watched more than 52 mln. Pages • Recently the PPV views on NOW.RU are 6 times higher than the FREE views. • As for the territory, at the moment, our primary audience is residents of the Russian millionaire cities • Moscow and St. Petersburg audiences make up 27.7% in total
  • 14. Audience Interest More than 45% of the daily audience is permanent (returning audience) The number of repeated purchases in several content categories is up to 79%
  • 15. Consumer activity ! Over the past month (from 27th August) the growth dynamics of subscribers in the category of "30 Days" was 76%. 8% Conversion to purchases 7% 6% 5% 4% 3% 2% 1% 0% Instant Buy In a month In 2 months * Registered users (projection)
  • 16. The VOD Market Development, New Formats and Time-Window in terms of NOW.RU
  • 17. How soon will the video content start earning money? ! 70% of the Users are ready to wait no more than 1 month 40% 35% 37% 30% 25% 20% 15% 18% 15% 10% 11% 11% 5% 8% 0% 1 day 1 week 2 weeks 1 month 3 months 6 months ! 76% of the Users are ready or partially ready to pay for the content appearing right after its TV or Theatre release. Source: PWC «The speed of life»
  • 18. Pre-Air content on NOW.RU. Traffic. Opening day Normal day
  • 19. What do you look at when you choose a film?
  • 20. Maximum Monetization Income distribution depending on the model 12 $ 10 8 6 TVOD 4 / SVOD/ 2 DTO DTO AVOD 0 30 PRE-AIR 1st release days 2nd release 1 year Model
  • 21. THANK YOU Welcome to our CINEMA-Site