Owner of “Cinema Park” and “Formula Kino” Rambler Group acquired online cinema “Okko”

Okko
Okko

This was a non-cash transaction: the owner of “Okko” Era Capital received a share in the parent company of Rambler Group. The size of the share is not disclosed.

The owner of Era Capital Ekaterina Lapshina confirmed the merger. Rambler needs online cinema to “create a cross-media ecosystem covering all screens: mobile, computer, cinema and Smart TV”, the company explains.

The combined group will become the largest distributor of content online and offline with a common loyalty program, which will give new opportunities to advertisers and partners, expect in Rambler.

Alexander Mamut has long studied the possibilities of development in the online video market. Informed sources told that the businessman looked at different video services, including the largest one “ivi”.

Rambler representative confirms that the company held talks “with almost all participants of the online cinema market”. Rambler was already for a transaction in this segment in 2017, the holding company acquired control in “Dalton Media”, developing a platform called Eagle Platform (videos on the websites of “Vedomosti”, the TV channel “Rain” and projects of Rambler work on this platform).

In 2017, Mr. Mamut has acquired the largest cinema network “Cinema Park” and “Formula Kino”, which are now operationally merged with its other media assets (Rambler and publishing house “Azbuka-Atticus”) in holding with projected revenue of 25 billion rubles.

“Okko” was launched in 2011 by the founders of Yota operator Sergey Adonyev and Albert Avdolyan, at first it was called Yota Play. The last few years, the Okko was owned by their fund “Telconet”, and was managed by consulting company Marsfield Capital.

At the end of 2017 Era Capital of Ekaterina Lapshina (also CEO of Marsfield) bought a number of assets from Telconet, including Okko. Merging with Rambler, Mrs. Lapshina counts on integration in the field of home and cinema viewing.

“This is a synergy of online and offline consumption, it seeks to use all services: classics cinemas, e-commerce, marketplace. We are very pleased with the assessment and are interested in getting more interesting results,” she said.

Unlike the majority of online cinemas, Okko works without advertising, the user is offered to subscribe or pay for a separate movie. This model will be preserved after the deal.

By the end of 2017 Okko doubled revenue to 1.38 billion RUB and ranks second among online cinemas after “ivi” whose revenue was 2.43 billion rubles. Okko estimates its market share at 18%. In 2017, the company went on break-even and grows “almost without the use of debt instruments”, Rambler says.

In 2016, the owners of Okko held talks with VimpelCom about the partnership, which assumed the buyback of the company at an estimated $40 million. Ekaterina Lapshina does not comment on this assessment, but notes that since then Okko has grown and is now estimated at a higher value.

In General, the online video market in Russia has been growing rapidly for several years, but most of the services have not yet reached a stable payback. Among the problems — piracy and high costs of licensed content.

The oldest players, like “ivi” and “Okko” started when the market was not ready yet, and lived for a long time at the expense of shareholders. Now is the time when the market is ready, but the question is, what is the financial condition of the online cinema marker after several years of “ice age”.

From the point of view of filmmakers, for a combined player in the field of offline and online preferences are questionable.

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