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CENTRE
TV
I.
Moscow-based Centre TV gets reduced funding.
The Moscow city duma [local parliament] has adopted
the capital’s budget for 1999. It is R1.3bn
[roubles] up on the budget adopted on first
reading. The final budget has allocated to
spend only slightly over R400m on the Centre TV company,
whereas the first draft proposed that R1.2bn be allocated
to Channel 3 [Centre TV] . . . .
The
channel is losing its best journalists, and its ratings
and advertising revenue along with them. The Centre
TV leadership remains split into two camps—those of
Vladimir Yevtushenkov, chairman of the board of
directors, and Anatoliy Lysenko, chairman of the Moscow
Government Telecommunications Committee . . . .
According
to the information received by ‘Izvestiya,’
Yuriy Mikhaylovich [Luzhkov] still favours the option of
re-registering the television company as a state
enterprise. After a while, when the capital’s
budget increases (by R5bn), the financing of Centre TV
will rise accordingly.
‘Izvestiya,’
Moscow, February 27, 1999
II. Centre
TV loses out on ad revenue.
At the beginning of this week, the mass media market
was agitated by an announcement which the general
director of the Centre TV channel made to the Interfax
agency. According to Boris Vishnyak, the largest
advertising agencies had decided to boycott Centre
TV. But Vishnyak reassured a ‘Kommersant’
correspondent, saying that the “situation has
already been resolved.” According to our
information, the agencies were simply reminded how
influential the channel’s proprietor was.
Transnational
corporations, that is, the largest advertisers, prefer
their products to be advertised in various countries by
local divisions of a single agency. Such agencies
control a large part of the Russian television
advertising market, and the fate of channels often
depends on them. Before last summer, Western
agencies (there are about 20 of them operating in our
country) managed approximately 80 per cent of the money
on the Russian television advertising market, and each
central channel received its portion of the orders.
But after 17th August, the advertising budgets
“shrank.” According to the data of the
analytical agency Russian Public Relations Group (RPRG),
last year the volume of the television advertising market
amounted to 500-600m dollars, and in 1999 it is hardly
likely to top 250m.
According
to the information received by ‘Kommersant,’
not long before the New Year, the agency networks decided
not to “spread thin” the sharply reduced
budgets among dozens of “second-tier” channels
and to redistribute the money in favour of ORT [Russian
Public TV], RTR [Russian Television and Radio] and NTV .
. . .
The
second-tier channels are trying not to lose their
wits. For example, president of TV-6 Eduard
Sagalayev told ‘Kommersant’: “The
major advertisers have not left our channel; the
percentage of advertising by major international
companies on TV-6 has remained the same.” But,
according to the data of the RPRG agency [Russian Public
Relations Group], there was half as much advertising on
TV-6 in January as in December.
The
only one which has decided to fight is Centre TV.
At the beginning of this week, the channel’s general
director, Boris Vishnyak, declared in an interview to the
Interfax agency: “A palpable blow to Centre TV
has been dealt by the boycott declared by a number of
major advertising companies against the Maksima agency,
the channel’s principal advertising
partner.” Indeed, while in December, according
RPRG’s data, advertising on Centre TV took up 2,234
seconds, in January it took up only 895. In a
conversation with a ‘Kommersant’ correspondent,
Boris Vishnyak confirmed that “before the New Year,
the last major advertiser, Unilever, left the
channel.” But he immediately added that
“now the situation has already been resolved.”
The
principal shareholder in Centre TV is indeed the Moscow
city government. Rumours are circulating that the
Maksima agency reminded the networks that the prosperity
of their clients in Moscow depends on the local
authorities, who have an interest in the presence of
advertising on Centre TV. It seems that
Maksima’s arguments turned out to be
convincing. In any case, according to the
information received by ‘Kommersant,’ the
agency was able to reach agreement with the networks on
some fixed percentage of the advertising budget that
Centre TV will be guaranteed. According to some
reports, this is 10 per cent of the amount allocated by
the agency networks for television advertising. For
Centre TV, this is not bad at all—the channel now
receives only 2.51 per cent of the advertising budget of
the 12 Russian television channels.
‘Kommersant,’
Moscow, February 12, 1999
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