The Post-Soviet Russian Media

Conflicting Signals

Birgit Beumers, Stephen Hutchings, Natalia Rulyova

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134112388
• Edition: 1
• Topic: Filología
• Subtopic: Estudios de comunicación

This book explores developments in the Russian mass media since the collapse of the USSR in 1991. Complementing and building upon its companion volume, Television and Culture in Putin's Russia: Remote Control, it traces the tensions resulting from the effective return to state-control under Putin of a mass media privatised and accorded its first, limited, taste of independence in the Yeltsin period. It surveys the key developments in Russian media since 1991, including the printed press, television and new media, and investigates the contradictions of the post-Soviet media market that have affected the development of the media sector in recent years. It analyses the impact of the Putin presidency, including the ways in which the media have constructed Putin's image in order to consolidate his power and their role in securing his election victories in 2000 and 2004. It goes on to consider the status and function of journalism in post-Soviet Russia, discussing the conflict between market needs and those of censorship, the gulf that has arisen separating journalists from their audiences. The relationship between television and politics is examined, and also the role of television as entertainment, as well as its role in nation building and the projection of a national identity. Finally, it appraises the increasingly important role of new media and the internet. Overall, this book is a detailed investigation of the development of mass media in Russia since the end of Communism and the collapse of the Soviet Union.

Part 1
Media, politics and state

1 Free to get rich and fool around

Ivan Zassoursky

Media in Russia: safeguarding the ‘Third Empire’

The Russian media system is shaped by the same forces of technology and uses largely the same business models as everywhere else, trying to attract audiences and advertisers. The key difference is that, whereas western media systems are characterised by rigid regulations that shape, or, as some argue, fail to stimulate, their transformation, development and growth, Russia faces other political realities and risks. In other words, while the state is not yet proficient in regulating the industry, it is quite keen to control the political arena and, as a result, the media system, which is perceived as the golden key to the ballot box and therefore to the stability of the system of governance, to the political elite and to control of state-owned energy giants and industries.

This obsession with control is, in fact, coherent strategy, quite certainly formulated under the influence of the ‘information security’ doctrine, which itself is the outcome of a certain mentality of the current Russian ruling class. A securitydominated mentality has shaped Soviet and Russian history, and, in the West, this makes the doctrine seem to be a sign of continuity in Russia. However, it may well prove to be a temporary shift rather than a final outcome while a system of governance with strong central power and very limited parliamentary influence is in place. The weak judiciary system, the strong government and the lack of respect for private property (understandable, since it has all been acquired recently) make this a lose-it-all battle (see Williamson 2007). Control over the media is essential in circumstances like this, when future victory may (hypothetically) be stolen by rival forces, in exile and in the West. But it is much more likely that the victory could be spoiled or stripped of its legitimacy. The nightmare scenario whereby the media can manipulate and sway large numbers of voters is unlikely to happen. Thus, in fact, there is not much encroachment from the central government on the new media territories: it is satisfied with what it has got and leaves the web to grow on its own. While so-called ‘niche’ media can print on any topic, broadcasting and the central dailies have to be kept in the hands of supporters and allies.

It has to be borne in mind that media are truly powerful only in a state that has no strong and stable political system with a set of long-established institutions and procedures. Freedom of speech is not a ‘problem’ in itself—the state machine needs the press to keep subordinates in check, to know what is going on in the regions, and to scale down corruption. Once firmly established, the political system is usually not afraid of a free press—even the famous glasnost was started by Mikhail Gorbachev as Communist Party policy. Yet currently Russia is precisely in a stage in which the ruling elite is planning and putting in place just such a set of institutions and making sure there is enough red tape in elections not to hinder their efforts to design and launch a political system. As soon as the political system is up and running, the media will not be able to do much harm. Afterwards, the media can have excessive freedom to make as much noise as possible, so that attention is diverted from issues of critical importance to the ruling class—but that is nothing country-specific, and some critical Western thinkers argue that this practice is commonplace in the United States and elsewhere (McChesney 1999) and that the term ‘political spectacle’ no doubt can be used almost anywhere (Edelman 1988).

The way the maturing system of political media management works is hardly comprehensible to an outsider, but the effects are self-evident. They are twofold: vast horizons for non-political media projects with absent constraints for cross-ownership and convergence on the one hand, and prohibitive risks that act as barriers for entrance to the largest media markets (such as on-air TV and national radio) on the other hand. The resulting business climate has been a boon for many media companies which have positioned themselves as ‘entertainment networks’ (CTC television channel, TNT, MTV and all the licensed global glossies) or limited themselves to print media (Moskovskii komsomolets, Independent Media Sanoma Magazines, Kommersant) and for the Internet in general, which has remained largely off the radar screen for the last decade. It has also helped to speed up cross-media acquisitions and concentration, as state-affiliated companies (via state-controlled energy businesses) have done their best to gather what has been left of the kings-of-the-nineties media empires. This is how Gazpromowned Gazprombank has acquired NTV and TNT and is about to take over Komsomol’skaia pravda, while it owns Izvestiia and Tribuna already.

However, as the election cycle reached a climax with parliamentary elections in 2007 and presidential elections in 2008, the situation is set to change. The state, which is now seen as a largely centralised apparatus, is determined to satisfy voters and ensure that no one will tell them they are not satisfied. There is increasing pressure on the media, the advertising industry and its clients from lawmakers who have cut advertising slots on TV channels (see details below) and set limitations on the advertisement of cigarettes and alcohol practically everywhere. But the biggest and not quite predictable developments are expected in the press market and in the Internet sector. Large-scale intervention of the state in media affairs is unlikely, and in this sense the dangers are too easily exaggerated. There are politically motivated takeovers of ‘old’ and even ageing media (which in itself may be seen an act of grace), but no confiscations, and a set of new laws covers the remaining loopholes. The nasty clean-up took place almost seven years ago, with Vladimir Gusinskii and Boris Berezovskii fleeing the country and selling their stakes. Now to be attacked one first has to provoke, and try really hard.

It is also important to note that none of this comes as a surprise to the media managers. The scope for action by the state is rather limited as some of the biggest media actors in potentially sensitive sectors are registered as international companies (CTC Media, Independent Media, Rambler Media etc.), which rules out direct confrontation and aggressive pressure, but opens the window for cash and other carrots, as well as populist campaigns by parliament and competitors not limited by ethics and caution. This explains why media management are spending more and more of their time on constructing a balanced relationship with the state directly or through such emerging instruments as the so-called ‘chamber of commons’ (obschestvennaia palata) and Chamber for Trade and Industry (torgo vo-promyshlennaia palata). Even if state and media still have a carrot-and-stick relationship, now the carrot comes first.

Television: still total reach

Still the biggest media market sector by far, Russian television is mostly an onair business, and is still regarded as the only way to reach and sway the majority of the population. Of over a dozen nationwide television channels and networks, half (Channel One, Rossiia, Channel Kul’tura, Sport, NTV, TNT) are directly or indirectly controlled by the state, whereas the other half (CTC, Domashnii, TV3, DTV, MTV) come under international companies, with some niche and regional channels (Muz-TV, 2x2 etc.) jammed in between. The formerly independent channel Ren-TV sold a minority stake of 30 per cent to the media giant RTL, with 35 per cent belonging to each of the oil and industry heavyweights Surgutneftegaz and Severstal groups. The transfer of ownership of RenTV from the Lesnevskii family and RAO UES (30–70 per cent) has led to changes in the management: the founders Irena and Dmitrii Lesnevskii have stepped down to make way for a new management team. Russia Today, an English-language regional channel, was launched by the state broadcasting corporation VGTRK but received sceptically by experts and may not yet be seen much by its designated audience. However, Vesti24, the 24-hour news channel owned by VGTRK, is rapidly growing and spreading its coverage as it gains more and more frequencies in the regions.

Television grossed 44.1 per cent (worth US$2.33 billion) of the Russian advertising market in 2004, and 46.5 per cent of the total advertising expenditure in 2005 (US$5.01 billion), according to an estimate of the Russian Association of Communication Agencies (RACA).¹ It is set to attract 49.2 cents out of every advertising dollar spent in Russia in 2006, according to the same report, maintaining its clear status as leader among all media markets. The continuing increase in television advertising expenditures is understood to result not from an the increase in the number of channels, but as a plain price hike driven by state regulations that limit advertising to 20 per cent of airtime and four minutes per slot from 1 July 2007. Beer ads are banned from television between 7 a.m. and 10 p.m., from 9 a.m. to midnight on radio, and from 7 a.m. to 8 p.m. in cinemas; new restrictions have been placed on other players, notably the gambling industry. However, as the price hike shows, there is still no deficit in ads, and time on channels is booked heavily, which is best explained by the strong economy with booming consumer spending fuelled by high oil prices and heavily expanding consumer credit programmes.

The two state-owned channels (Channel One and Rossiia) compete fiercely for ratings in every slot, with Rossiia on the rise. Both channels are investing heavily in the production of television series and Channel One is also developing a film production arm that helps this major broadcaster place promotion campaigns that enable it to cash in through cinemas, where almost every new film sets a box office record, thus providing a long-needed boost to the domestic film industry.

However, the biggest hits are more and more often produced by CTC, a non-political entertainment broadcaster, whose IPO on NASDAQ was a smash hit in itself. The extremely popular series My Fair Nanny (Moia prekrasnaia niania, 2006) has pushed CTC to the top of the ratings, with the Ukrainian actress Anastasia Zavorotniuk instantly earning recognition as a leading TV actress. Not surprisingly, according to the new Video International price policy, it is becoming more expensive to advertise on CTC in comparison to other channels, which is a small revolution in the local television advertising market—good news before the planned CTC-Media IPO, which is said to have raised up to $175 million in cash and set the company value at over US$1 billion in 2006 for a television operation that now includes also the Domashnii (Home) channel, which itself has set the record for a rating-point-based advertising price growth, up 33 per cent from the previous year.

The breakthrough of CTC-Media is also the final proof that NTV, which was a firm number 3 all through the late 1990s, has slipped down, either because its news programming was sterilised after the transfer of the company to Gazprom-Media, or because there is indeed no longer so much politics to report on for its former, highly politicised audience, or because of the industry-wide tidal wave that is making entertainment the number 1 priority of audiences when it comes to television (scary gangster epics could be an outdated response to that trend). It is interesting that TNT, another member of Gazprom-Media, which is still growing and booming as a reality television channel, has experimented widely with the Internet and made a lot of cash on mobiles (SMS and other value-added services), and instantly became a successful publisher with its Dom2 magazine, selling over half a million copies of what is basically a reality-show follow-up, mimicking the Channel One movies breakthrough in print. Convergence and diversification are thus becoming the new rules of the old game. To support this conclusion, we need to look at the rise of television channels owned by Internet companies, such as RBC and Rambler Media, both niche formats: one is a business information network, the other a knowledge channel. Both are public companies: RBC is listed in Russia and Rambler Media is registered in London. However, if business television were to take root, the half-hearted ‘knowledge’ channel Rambler-TV would most likely be scrapped to let the niche animation channel (featuring The Simpsons [1989–] and South Park [1997–]), based on the 2x2 brand and owned by ProfMedia, take its network into the regions.

There are more television channels to emerge as the prospect of digital television is looming ahead, but the space for new ventures can already be felt thanks to the activity of cable operators in Moscow and the regions, the NTV+ satellite television expansion and numerous other signal distributors fighting for a market share. NTV+ is now transmitting to Siberia and the Far East, whereas the biggest inroads have arguably been made by the Moscow-based telecommunications and electronics empire Systema Telecom, which is building a strong digital and cable network using ADSL technology and relying on its well-established broadband network in the capital, which sits on top of the city-wide fixed-line phone operator MGTS, part of the same holding that also includes MTS, the countrywide GSM network. There is also talk about the ongoing consolidation of cable operators and numerous initiatives by telecommunications and Internet providers to get into this lucrative market, but this lies in the future.

The Internet: growing up as a happy child

In the nascent economy of attention, advertisers are set to follow the consumer wherever the eyeballs move, and thus the record growth of Internet advertising (up by 71.4 per cent in 2005, and with a growth of 67 per cent in 2006) may explain the slowdown of advertising revenue in the printed press. The Internet audience is growing, although at a slower pace, down to an estimated 30 per cent growth per year from 40–50 per cent in previous years, which is still a formidable figure across the media industry. Whereas the mobile telephone sector has matured, reaching almost 100 per cent penetration (by SIM-card numbers), the Internet is still maturing with three big players (Yandex, Rambler, Mail.ru) running so far ahead of their followers as to be now almost unreachable, just like the three big cellular companies MTS, BeeLine and Megafon. Interestingly enough, all three are protected—as a wise precaution—by some foreign ownership, with Rambler Media listed in London, Mail.ru partly owned by the South African media giant Naspers Limited (30 per cent) and other investors, and Yandex connected to the Cyprus-based Yandex Technologies. Although the Russian government embraced a ’hands-off’ policy towards the Internet long ago, one is left to wonder whether any other option was available, considering the ownership structure.

The trend of audience growth may continue if the long-promised state computer penetration programmes are finally implemented, but that is a notoriously risky bet. One can argue, however, that things are good as they are, because the lack of state intervention might have been the greatest blessing for Russian Internet throughout its history, as all sorts of regulations were continuously dumped in favour of the ‘hands-off’ approach maintained by the Ministry of Information Technology and Communications. There is a visible move by the Federal Agency for Press and Mass Communications to ensure more responsibility by online news media and the three big portals, which may result in some corrections to the 1991 Media Law, but nothing has come of this yet. The online news media are doing well with RBC, Utro.ru and Lenta.ru still ahead in Rambler’s Top 100, but only after Vzgliad.ru, which is linked to the Kremlin—a maverick business news project promoted on the front page of Mail.ru throughout 2006, thus pushing it from zero into the top ten online news sites.

Yandex was planning to list abroad in 2006 with the help of Morgan Stanley and Deutsche Bank, but eventually did not. What makes Yandex a Russian Google is the context advertising (80 per cent of Yandex advertising revenues, by company disclosure), a new kind of ‘classifieds’. Context ads are estimated at 40 per cent of the total Internet advertising budget (US$34–50 million), and are expected to grow with market leaders Yandex Direct and Begun (an operation owned by Finam and Rambler Media jointly) leaving little space for Google’s AdSense and other players. Google, which has finally appointed...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of illustrations
• List of contributors
• Acknowledgements
• Introduction
• PART 1 Media, politics and state
• PART 2 The language of the media
• PART 3 The media and memory
• PART 4 Culture, state and empire in television serials
• PART 5 New media, censorship and identity
• Glossary
• Bibliography