Russia's online video market set for growth

Market to increase tenfold to $180 million by 2015

MOSCOW -- Russia's online video market is to increase tenfold to $180 million by 2015, according to a research by the J'Son & Partners consultancy.

The company says that major factors contributing to the potential growth are increasing Internet penetration and the development of the online ad industry.

Alexei Pospekhov, an analyst at J'Son & Partners told The Hollywood Reporter that sites offering Internet users legitimate online video content in exchange for having to watch advertisements are on the rise in Russia.

"We believe that this model will continue to develop most actively in this market", he said. "[Also], when major Russian content producers enter the market, users may get an opportunity to, for instance, pay for being able to watch online a new episode of a TV series before it is actually released."

He added that the iTunes model, whereby a user has to pay for content is likely to totally disappear in the Russian market or to occupy an insignificant share of it.

Local producers of movies and TV series are looking at online distribution as a big opportunity but are discouraged by piracy. "Online distribution of video content is certainly a promising niche, and most producers have now realized it," Timur Weinstein, general producer of WeiT Media, told The Hollywood Reporter. "The main deterring factor is online piracy and, as a result, a shortage of resources offering legitimate video content."