10-22-2013 01:04 PM

Russian online TV site Tvigle seeks new funding

MOSCOW | Tue Oct 22, 2013 9:04am EDT

Oct 22 (Reuters) - Russian internet TV portal Tvigleaims to raise more than $10 million and seek private equityinvestment so it can grow its business as a legal alternative topirated content.
Russia became Europe's largest internet market by audiencein 2011 thanks to improved access to the web and has seenexplosive growth of online businesses. However, videodistribution has lagged due to competition from websites thathave free, illegally downloaded content.
The company's founder and chief executive Egor Yakovlev saidon Tuesday that Tvigle plans to attract private equityinvestment next year and is currently talking to potentialbackers which could include new as well as existing investors.
Tvigle's revenues come from advertising but it is alsodeveloping a pay-per-view model, expected to gather groundfollowing the tightening of anti-piracy legislation last summer.
Tvigle, an online streaming service similar to U.S. firmsHulu and Netflix, raised initial funding in its earlystages in 2007 from Allianz-Rosno Asset Management, part ofGerman insurance group Allianz, and a further round in2011 from PromSvyazCapital, the investment arm of bankers Dmitryand Alexey Ananiev.
The company has said that luring people away from internetpiracy is a top priority and key business opportunity for it.
Around a quarter of the company is owned by Allianz and athird by Media3 - a holding structure of PromSvyazCapital.
Founder Yakovlev owns about a quarter, with the restdistributed among the company's management.
According to East-West Digital News, Russia's digitalcontent market is worth around $1.4 billion, of which 97 percentis games. Video accounts for just 2 percent due to the highlevel of piracy, but its share is expected to grow along withthe legalisation of video content.

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