Movie on the tracks: can the Railways make money on movies in trains

In 2014, the “daughter” of Russian Railways, Federal passenger company (FPC) has decided to provide train passengers with a Wi-Fi network. For partner status FPC claimed by several companies, but a member of the pilot project was one firm — “RDL-Telekom”, created for two or three months before. Now, according to the representative of the Russian Railways, Wi-Fi in trains in commercial operation provides only the “RDL-Telekom”.

A operator created by Vladimir Litoshenko, together with partners, whose names he refused to disclose. He Litoshenko previously worked with firms that are contractors, Railways, follows from the information in the database “SPARK-Interfax” (see incision). Initially, the “RDL-Telekom” planned to equip Wi-Fi networks all branded trains Railways — more than 200 compositions, but is limited to 32: for the remaining state company wants to buy equipment on their own.

In addition to the payments for the Internet access in trains decided to make the screenings. The first contractor among online cinemas found from (his name Litoshenko did not disclose), but the project failed: in the catalog of the films were not blockbusters, and that “the decisive factor for customers,” said Litoshenko.

“The advantage of train over other modes of transport that the average person is in this day without access to the outside world. Or to sit on the Internet or watch a movie — what else to do?” explains Litoshenko the business model.

At the end of 2015, the “RDL-Telekom” has begun negotiations with online theater Okko, investors are the founders of Yota Devices Sergei Adonyev and albert Avdolyan. To develop software for the partnership project Okko launched in early 2016, it took 2.5 months.

30 trains equipped with Wi-Fi “RDL-Telekom”

3,5 million rubles is the average cost to equip a Wi-Fi network one train

27 trains offers Okko movies

250 RUB is the most expensive film Okko trains

149 rubles — the minimum that you have to pay for Wi-Fi from the “RDL-Telekom”

5% of revenue “RDL-Telekom” bring the payments-per-view movies

Source: company data

“RDL-Telekom”, for its part, lays in trains, cables, installs Wi-Fi access points and equipment from the Swedish manufacturer IComera, which serves as a server (to store movies) and router (connected to the networks of mobile operators through the antennas on the train roof). The operator also controls the portal to which users are directed Wi-Fi. In the middle of the year, the partners launched a pilot project in 27 trains, mostly proprietary, such as “Leo Tolstoy” (Moscow — Helsinki) soon will be added another three part.

48 hours

The service allows passengers to watch movies from your library Okko on your laptop, tablet or smartphone. The user has about a hundred pictures (all in the collection of the cinema more than 5 thousand films and serials) — number is limited capacity in the trains of servers that upload content and go along with the audience.

To users on the start page when opening the browser. The unit value of the content — from 79 up to $ 250, to pay online using credit card, the service “Yandex.Money” or account number. After payment, the movie is available for 48 hours, but only on the train.

The Internet connection to the screening, don’t need to watch movies online is still not possible, explains technical Director of online cinema Igor Sokolov. “It’s a train, it moves all the time. Especially if you go somewhere in the region of low signal level will not provide a download of the film,” he says. Private investment is not demanded, doing them in-house developers, adds CEO Okko Ivan Grodetskiy.

“No business case”

Now purchases “ten month” because of the small number of connected trains, said grodecki. Partners share the profits among themselves, but did not disclose the proportion of allocation of funds. The number of users and income Okko Grodetsky also did not disclose. In total, the service was 5.5 million devices. Total revenue for 2015, according to J’son & Partners Consulting, amounted to 645 million rubles in the Okko called that figure “close to real”. In the network “RDL-Telekom” on average it takes 300 payments per day, of which about 5% movies, the rest for Internet access, says Litoshenko (operator’s revenues in 2014 amounted to 5.3 million rubles, while the net loss of 5 million rubles, according to “SPARK-Interfax”). However, he is sure that the content should bring the company not 5% and 40-50%, which is only possible by increasing the number of trains. Grodetsky considers that the potential of the project 240-270 trains with passenger traffic of about 21 million people a year: “Of all passengers 20% will see the service, 10% make a purchase”.

In the near future the share of services in Okko revenue is unlikely to exceed 1%, the Director of the Department of TV and media content J’son & Partners Consulting Dmitry Kolesov. “The online cinema is the content and the necessity to keep it through the maximum number of channels. This is one of them,” — said the expert.

When will the pilot phase and will start if the primary partners have not decided. The determining factor is the number of trains that will run “RDL-Telekom”. If the project will be 27 trains, Okko it is not very interesting — “it’s not a business case,” says Grodetsky. Agree with him Litoshenko: “We are not built for this company.”

The operator of the train past

“RDL-Telekom” on 100% belongs to Peter Litoshenko, from the data “SPARK-Interfax”. Until March 2016 by the operator belonged to the company “ABA-invest”, which in equal shares belongs to Vladimir Litoshenko (Peter’s brother), Andrei Dudko and albert Rothfus and its CEO is Alexei Orlov.

Partners Litoshenko participated in projects related to Railways. For example, Rufus owns 100% TD “Vladimir”, which in 2012-2016 has received from the Railways orders for supply of IT services for a total amount of 644 million rubles eagles owns 75% of the company Transrestoranservis Swallow”, which serves trains “Swallow”. He Litoshenko was previously the commercial Director of “Axiom Group” (until February 2016 belonged to Rufus). Key customers of this IT-company called Russian Railways and its subsidiaries: in 2013-2016 “Axiom” concluded with FPC contracts for a total amount of 141 million rubles. Previously, 50% of the “Axioms” owned “Transservisgrupp” — a major contractor of the Russian Railways.

In tandem, the “RDL-Telekom” and Okko have competitors: at approximately the same time on the train Moscow — Adler was launched a joint project operator “TransTeleCom” and the online cinema TVzavr. The partners have created a portal with movies, TV series and information about the route of the train. The development platform was engaged in TVzavr, spending $1.5 million, said a company spokesman Oles Teplova. From may to August 2016, access to content was free, and in the fall TVzavr engaged in monetization. “The cost will be included in the price of the train ticket and the price of the library’s movie starts from 49 rubles.”, — was noted by Teplov.