Saturday, August 30, 2014


Russia

Ad Ban To Hit Russian Cable, Satellite TV

Natalya Sindeyeva, general director of Dozhd TV, is one of those warning that the ban will sound the death knell for more than half of Russia's cable and satellite channels.
Natalya Sindeyeva, general director of Dozhd TV, is one of those warning that the ban will sound the death knell for more than half of Russia's cable and satellite channels.
By Claire Bigg

Dozens of small and independent Russian television stations could face closure after lawmakers approved a controversial bill banning advertising on cable and satellite channels.

The proposal would also consolidate state-controlled channels' dominance of the advertisement market.

The surprise bill raced through Russia's State Duma, the lower house of parliament, last week, sailing through its three compulsory readings in just two sessions.

Excluded from the ban are "national, compulsory, universally accessible" channels and those conveyed by terrestrial broadcasting -- meaning all the state-controlled channels that currently dominate Russian television.

Advocates say the new law aims to end unfair competition on the television market, where pay channels supposedly benefit from mixed funding schemes -- subscription fees and advertising -- while free broadcast channels are limited to commercials.

But the heads of 15 pay channels, including Natalya Sindeyeva of opposition-leaning Dozhd TV, have written a letter to the government warning that the ban will sound the death knell for more than half of Russia's cable and satellite channels.

"Excluding the advertising model could place about 150 thematic pay channels on the brink of survival," the letter says. "Raising payments for television services may lead to understandable customer dissatisfaction."

The signatories also warn that the new law will hurt small and medium-sized businesses currently advertising on pay channels since "only big-business representatives can afford advertising on federal channels."

No Threat To State TV

Many experts believe it's time for Russia to adopt regulations governing subscriptions and payments of paid television channels, whose number has exploded over the past decade. But few see the ban as a suitable solution.

"Pay channels don't have a unified payment system, so there is certainly a need to put things in order," says Aleksandr Melman, a television critic for the Russian daily "Komsomolskaya pravda." "But I don't understand what commercial advertisement has to do with this. As far as I know, we still have a market economy and channels can subsist that way too. It's normal."

A participant holds up a flyer saying "We need Dozhd" during a protest against the threat of closure of Dozhd TV in Moscow in February.
A participant holds up a flyer saying "We need Dozhd" during a protest against the threat of closure of Dozhd TV in Moscow in February.

Melman says the bill could be a preemptive strike aimed at barring independent-minded channels like Dozhd from consolidating their presence through advertising in the future, while at the same time preserving the state channels' near-monopoly of television advertising.

According to the Association of Communication Agencies of Russia, free broadcast channels account for more than 97 percent of the country's television advertising market, raking in $4.4 billion last year.

Dismay over the new bill has spread beyond Russia, with the Organization for Security and Cooperation in Europe (OSCE) entering the fray this week.

"If implemented, these amendments could lead to cutting off private small- and medium-scale channels from their principal source of revenue, which is advertising," OSCE Representative on Freedom of the Media Dunja Mijatovic said on July 7. "That could further limit media pluralism and free flow of information in Russia."

The OSCE urged Russian President Vladimir Putin to veto what it called an "unduly and restrictive measure."

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