Video streaming giant Netflix has announced plans to provide its services to residents of Russia, a troubled market for the entertainment industry.
Although some other key players in the entertainment are leaving Russia, Netflix plans to swim against the tide and start offering its services there. Just last month NBCUniversal announced that it would be withdrawing from Russia, one of a number of global corporations considering a similar move, writes Leo Barraclough of Variety.
Netflix to battle conditions in Russia
Russia’s worsening economic situation, caused in part by sanctions and low oil prices, as well as a difficult legislative environment, which bans advertising on pay TV channels and limits the extent of foreign ownership, are discouraging foreign companies from operating in Russia.
A move into Russia would come as part of a planned global rollout for Netflix, which it hopes to complete within the next two years. After finding success in its home market in the U.S., the company’s first international markets were Canada, Latin America, the U.K., Ireland, the Nordics and the Netherlands.
Since then Netflix has launched its service in France, Germany, Austria, Switzerland, Belgium and Luxembourg, while operations are planned to start in Australia and New Zealand in March, and in Japan later this year.
Part of a global plan
“It is our ambition to be a global internet TV network,” said Joris Evers, Netflix’s head of communications for Europe, “and we expect to complete our global expansion over the next two years.”
“We would certainly hope that Russia is part of that expansion, but I am not able to share any further details at this time. We have confirmed that we will launch in Australia and New Zealand in March and in Japan later this year, but beyond that we have not announced any specific expansion plans,” he added.
Any potential entrance by Netflix into Russia will be complicated by the high levels of competition from legal, as well as illegal, operators. One legal rival is Amedia, which already has deals with Starz, HBO, CBS/Showtime, Fox, Warner Bros., Sony and ABC Studios, among others.
Despite the best efforts of the Russian government to get a better handle on pirates, illegal content could still significantly affect audience numbers for high-profile shows and movies released by Netflix.