Author: Katharina Dorn

TV-industry of Russia
Contemporary state and development prospects

The Russian broadcasting sector: structure, economic models and interference

Written by Katharina Dorn

Dr. Mikhail Makeenko, Associate Professor at the Faculty of Journalism of Lomonosov Moscow State University gave us a lecture on the Russian broadcasting system. TV is the most popular medium in Russia. 73% of the Russian population watch TV daily – 93% at least once a week. Television is the leading source of information. The TV industry of Russia consists of more than 20 federal broadcast networks, about 900 regional TV stations, approximately 350 cable and satellite TV channels and an unspecified number of local cable channels.

The three channels with nationwide outreach are Channel 1 (Первый канал), Rossija 1 (Россия 1) and NTV (НТВ) which own 39% of the market share and about 50% of the advertising market share of the broadcasting sector.

However, the huge size of the country (9 hour zones from Kalingrad to Magadan including about 200 nationalities) and its great cultural, economic and ethnic diversity also lead to the development of regional and local self-programming broadcast television. Thus, the Russian broadcasting system is largely decentralized with local TV stations working as affiliates (similar to the German ARD). This network system is very important with about two dozen networks which help disseminate information all over the country (in comparison: the number of networks is 3-4 times higher than in Germany or Italy).

Makeenko could isolate three typical economic models of modern self-programming broadcasters:

  • Budget needle (most common): broadcasters which are state owned or state subsidized with low or negative profitability
  • Unstable balance: private broadcasters with low net profit (<10%) and a significant share of local government investments
  • Profit generator: broadcasters with high net profit (10-30%), small dependence on local authorities and an orientation towards commercial revenue sources

Important TV owners are Gazprom-Media, CTC Media, NTV and the All-Russia State Television and Radio Broadcasting Company VGTRK. An analysis of the ownership structure of the Russian broadcasting sector shows that the national media outlets with the highest audience reach are controlled by the state (directly by subsidies or ownership of the state or indirectly by close relationships of media owners with politicians). Channel 1, for instance, is partly owned by Yuri Kovalchuk – chairmen of the Board of the Rossiya Bank and Putin’s personal friend. According to Makeenko, NTV is the only independent owner, since it does not show any direct or indirect ties to financial groups that control the other channels. It is considered one of the most objective and professional television networks in Russia.

Despite its financing by advertising or sponsorship, state subsidies play a crucial role for the continuing existence of the broadcasting system. Nearly half of the TV market is subsidized by state (about 16-17 billion rubles annually). ”Losses are compensated by state subsidies. The role of the economic regulator has been carried out by the state, which makes it a rather unprofitable system”, Makeenko states. Some private TV owners even report that their revenue isn’t high enough in order to receive subsidies. This state funding has a long tradition since it existed since the times of the Soviet Union.

Special types of broadcasting
Pay TV is very cheap in Russia in comparison to the USA. A basic package with 60 channels costs about 2€ per month, due to missing translations of contents and the fact that the broadcasts are produced for the main market (US, EU) in any case.

Regarding the online video sector there exist a lot of private sites, like Ivi, Megogo, TV Zavr and Tvigle which were surprisingly not replaced by the streaming giant Netflix (no “Netflix effect”).

Current developments
Russia is still in transition from analog to digital TV (the digital switch has been postponed to 2018).

State subsidies: He who pays the piper calls the tune?
After the presentation, we asked Dr. Makeenko if the high rate of state subsidies negatively influences the media freedom of broadcasters. Astonishingly the scholar negated this question due to several reasons:

  • Promotion of media freedom through subsidies: since the local advertising market is very weak, subsidies can also guarantee diversity, for example of local cultures. According to the scholar, “cultural diversity is more important than ideological diversity”.
  • Shift in donors, shift in influence: during the times of the Soviet Union, the state was the main donor of the broadcasting sector. Today, private founders (e.g. from other economic fields, like the gas company Gazprom) play a crucial role in financing. Consequently, the interests of several businessmen are strongly involved. Therefore, personal relationships seem bigger limits to criticism than state funding.
  • Liberal legal situation: there’s no law which states that criticism of the government is prohibited when a media outlet receives state funding. Furthermore, the Russian Law on Mass Media (1991) outlines the unacceptability of censorship.
  • Sanctity of power: media outlets are obedient to the state, which guarantees stability of the system. According to Makeenko, there’s no need to criticize it.

To my surprise, he also compared the Russian media system to Sweden, which is very liberal despite state subsidizing. Makeenko emphasized that Russian broadcasters are free to say what they want, they receive the funding in any case.
In my opinion, this fact is highly questionable. Even though there’s a strong significance of private men financing the broadcasting sector, it is apparent that there exist close ties between these donors and the government (as shown above) and therefore an indirect influence of the state on media freedom. Moreover, it is debatable if the liberal legal situation really reflects the reality. Perhaps there are unwritten rules that do limit criticism of the state. Furthermore, there seems to exist a clear discrepancy between old scholars and the younger population regarding their opinion of Russian media autonomy, as discussions with students at the university have shown to me. Astonishingly, the faculty of journalism is not located in the main complex of the Lomonosov University, but close to the Kremlin – the centre of power. Honi soit qui mal y pense?

I was somehow confused after the presentation, because it was hard to understand Makeenko’s point of view. “Russians are aliens”, he finally concludes – almost as if this could be taken as a justification for everything. Perhaps we aren’t able understand the Russian media system when comparing it with our personal experiences and our Western view. I, nevertheless assume, that this sentence was rather used to prevent external criticism and further discussion.