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Russia’s MTS in talks to boost web content

Mobile TeleSystems, Russia’s largest mobile operator known as MTS, is in talks with media companies including News Corp’s Fox and Sony to acquire more films and television programmes for its online entertainment service, executives familiar with the matter say.

Omlet.ru, the Moscow-based operator’s portal that is available on broadband-connected computers and mobile phones, has become Russia’s largest legal online source for entertainment content.

MTS has already secured deals with Walt Disney and NBC Universal . News Corp and Sony declined to comment.

Omlet.ru, which was launched late last year, offers a modest but growing collection of content with 1m music tracks, more than 750 film titles, 90 TV series, 400 episodes of TV programmes, and 10,000 music videos.

Mikhail Shamolin, chief executive of MTS, told the FT last week that Omlet.ru is expected to have access to up to 5,000 films by next year. “We have negotiated with all the major US and Russian studios,” he said, not specifying which discussions were active.

Russia has been named by the US government as one of the world’s worst offenders of intellectual property theft. But it has recently attracted the attention of media groups seeking growth beyond domestic markets.

One executive for a Hollywood studio in “active discussions” about providing films to Omlet said it had been encouraged by the number of Russian internet and mobile users willing to pay pirate sites for faster downloads or higher quality films.

Nicholas Walters, a senior director of strategy for MTV Networks International, owned by Viacom, said Russia held promise for media companies as the number of households with broadband access – which is in the 25 per cent range – is expected to rise significantly.

Mobile operators such as MTS are also focused on expanding access to 3G wireless services, which are anticipated to encourage heavier consumption of entertainment services on smartphones.

“The relationship with mobile operators is a strong possibility,” Mr Walters said. “What doesn’t exist in much form is the [Apple] iTunes model.”

Apple, which offers the iPhone for sale in Russia, has avoided launching a fully fledged iTunes online store, leaving the market open for local companies.

Similar to other western markets a decade ago, the lack of legal options to purchase or rent digital movies and TV programmes has driven consumers to sites hosting pirated content.

Источник: Financial Times

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