Feature

World Media 2007: Russia

Corruption, fraud and alleged political murder continue to dominate the headlines about Russia, but the country remains a staunch 'ally' of the West, holding, as it does, considerable gas reserves.

Last year, as has so often been the case since Vladimir Putin became Russia's president in 2000, the business stories in 2006 were about corruption, fraud and gangsters - the top media story was about murderous violence.

On 7 October 2006, Anna Politkovskaya, a human rights activist and Russian journalist, who had been severely critical of the Putin administration, not least over its handling of the Chechen conflict, was murdered in an attack that bore all the hallmarks of a contract killing. Her death came as no surprise. In 2004, while on her way to cover the Beslan hostage crisis, she was poisoned and fell seriously ill.

And, of course, poison has become the word commonly associated with Russia - not least because the current regime was (allegedly) involved in the death through poisoning of Alexander Litvinenko, a former security services agent and writer, who had been investigating corruption in Russia before fleeing and seeking asylum in the UK, died a slow and painful death in a London hospital in November last year.

It is unlikely that Russia will become the pariah state that it could (and arguably should) become. It is, for a start, energy rich, with Europe increasingly dependant on its gas reserves.

And second, Russia remains an important ally of the West, bordering as it does on the potential powder keg that is Muslim central Asia. Putin has offered unreserved support to George Bush in his "war on terror". In return for this, Bush has dropped objections to Russia becoming a member of the World Trade Organisation.

But Putin has never knowingly underplayed a strong hand - as the Sakhalin saga shows. In 1996, Russia invited a consortium, including Anglo-Dutch Shell plus Mitsui and Mitsubishi of Japan, to develop one of the oilfields near the island of Sakhalin, off Russia's east coast. The consortium successfully invested billions, but with production due to build up this year, the Russian government has issued what amounts to an ultimatum: hand over control of production to the state-owned Gazprom, or they would close the field down altogether.

As it happens, de facto nationalisation is also the biggest ongoing theme in Russian media. The government has begun buying into arguments that rising marketing costs - notably TV ad rates - are a major cause of broader inflationary pressures. Last year, it began to threaten to take over Video International, the independent sales house that controls 75 per cent of the Russian airtime market.

ADVERTISING EXPENDITURE
USdollars million at current prices. *Estimated **Includes magazines
Total News- Maga- TV Radio Cinema Out- Online
papers zines door
2000 826 240 100 270 45 3 165 3
2001 1,336 310 160 510 70 5 275 6
2002 2,210 495 260 920 115 9 400 11
2003 2,890 585 350 1,240 155 12 530 18
2004 3,910 730 470 1,700 250 15 710 35
2005 5,010 **1,390 - 2,330 300 20 910 60
2006 6,516 **1,640 - 3,192 366 27 1,183 108
2007* 8,389 **1,903 - 4,309 439 34 1,526 178
2008* 10,639 **2,207 - 5,602 527 40 1,969 294
2009* 13,525 **2,560 - 7,331 622 46 2,480 485

Adspend notes 1) After discounts. 2) Includes agency commission. 3)
Excludes production costs. 4) "Newspapers" include magazines in 2005.

FACTFILE
HIGHEST CIRCULATING TITLES
Newspaper: Pravda (daily, 3,200,000 copies)
Business magazine: Business zhurnal (fortnightly, 153,000 copies)
Consumer magazine: 7 Dney (weekly TV guide, 1,300,000 copies)
TOP TV SHOWS
Most-watched TV programme: Putin's New Year's address
Best new TV format: Prison Break
MAJOR MEASUREMENT TOOLS
Press: TNS Gallup Media
TV viewing: TNS Gallup Media
MAIN MEDIA OWNERS
Newspapers: Profmedia, Kommersant
Magazines: Independent Media, Burda
TV (sales houses): Video International, Alkasar

THE LOWDOWN

- Media topic du jour

Will the government dare to seize control of television airtime sales?

- Reigning media guru and why

Sergey Piskarev, the head of the innovative NTV television network and chairman of the Association of Russian Communications Agencies.

- Media mogul to be seen dining with and why

Sergey Vasiliev, the boss of Video International, the sales house controlling 70 per cent of the Russian television airtime market.

- Car to drive: Porsche Cayenne.

- Phone to carry: Nokia 8800.

- Whatever you do, don't say: Actually, I have my doubts about that Putin chap.

BUZZ MEDIA IDEA OF 2006

The Government controls the content side of Russian TV, but recently, the commercial side has been given more leeway. Perhaps no longer, with the Government threatening to hand the country's airtime sales operations over to oligarchs eager to do their bidding. As a result, advertisers have been assessing alternative broadcast options, notably outdoor, where western media owners such as News Corp and JCDecaux have a major presence.