“This would create equal tax conditions for all [online video] services,” Marina Surygina, general director of the online video service Tvzavr.ru, told The Hollywood Reporter.
Currently, foreign video services operating in Russia, such as Netflix, don’t pay taxes that are mandatory for local competitors, and the latter called for slapping similar taxes, including VAT, on foreign services, as well.
If adopted, the measure would affect all sales of digital content, including those by iTunes.
Netflix declined to comment. Apple’s Russian office wasn’t available for comment at the time of writing.
Meanwhile, local video services claim they don’t see Netflix, which launched in Russia in early January, as a strong competitor at this point.
According to Surygina, Netflix’ subscription is too expensive compared with those offered by local services – it starts at 7.99 Euro ($8.69) a month against 249 rubles ($3.3) charged by Tvzavr.ru and 499 rubles ($6.5) a month charged by another popular service, Amediateka.
“Netflix launched with a small catalog, which doesn’t even include House of Cards, and without translation into Russian,” she said. “Also, it isn’t offering Russian movies and TV series, which are very popular in this country.”
In 2015, Russia’s online video service industry was estimated to reach 3.8 billion rubles ($49.5 million), which is a 45 percent increase, year-on-year. According to Json & Partners consultancy, the segment’s biggest players are ivi.ru (which accounts for 13.3 percent of it), Okko (10.6 percent), Tvigle (7.7 percent), Videomore (7 percent) and iTunes (6.9 percent).