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Netflix, Amazon Prime ‘expected to withdraw from Russia’

Newly-implemented 20 per cent foreign ownership equity limit on OTT platforms will deliver a "major blow"

SVoD giants Netflix and Amazon Prime Video will be forced to withdraw their standalone platforms from Russia in the near future, according to the latest Digital TV Research report.

Eastern Europe OTT TV & Video Forecasts reported that although the two platforms will continue to grow in years to come, the newly-implemented 20 per cent foreign ownership equity limit on OTT platforms (to those with over 100,000 subscribers) will deliver a “major blow” to the pair’s global ambitions.

The forecast estimated that Netflix will have 3.43 million subscribers by 2022, nearly triple its 2016 result. Amazon Prime Video, meanwhile, will reach 1.12 million in by that time.

Simon Murray, principal analyst at Digital TV Research, said: “These numbers may seem modest, but they will be accomplished without any subscribers in Russia. We believe that [the equity limit] will force Netflix and Amazon Prime Video to abandon their standalone platforms.

“Instead, they are likely to license their original content to a local platform. Amediateka already brands itself ‘home of HBO’, so deals with other platforms are possible. Netflix has already done something similar in China with IQiyi.”

Excluding Russia’s 6.80 million SVoD subscribers by 2022, the report said Netflix will control 35 per cent of SVoD subscribers in the remaining 21 countries. Amazon Prime Video will contribute a further 12 per cent.

Digital TV Research forecasts 16.5 million SVoD subscribers across 22 Eastern European countries by 2022; quadruple the four million recorded by end-2016.