The Changing Business of Acquisitions in Russia

By Elena Sunbeam

The Russian television landscape has been completely transformed since the 1991 collapse of the Soviet Union. These days television is the primary news and entertainment source for the majority of the country’s 130 million residents. The number of television channels has sharply increased: approximately 100 State and 1,100 private channels currently operate in Russia. Interestingly, Russian stations that screen an excessive amount of foreign (particularly U.S.) programming to terrestrial or cable and satellite audiences usually only succeed if there are no market competitors specializing in local programming. Native Russian programming is currently favored in all territories across the former Soviet Union.

In January, VideoAge asked a number of key executives from leading Russian channels to detail their impressions of current Russian acquisition politics.

Anatoly Maximov, ORT - Public Russian Television, director of Cinema Broadcasting and Cinema Production:
“The breakthrough event of this past season was the full-scale development of domestic drama series/miniseries production, something we’ve lacked for the past decade. The great traditions of Russian/Soviet cinema have been the major influence on current mainstream television product. The staggering success of domestically-produced TV product (with audience shares of up to 50 percent) has inevitably diminished the presence of American drama series. Instead, we aim to buy recognizable theatrical movies. Today, the new game in town is licensing game shows. We have licensed such world-known formats as Survivor, Who Wants To Be a Millionaire, Weakest Link, and Russian Roulette. We finance our product ourselves. Domestic investments are rare due to our country’s undeveloped TV market. We welcome foreign investments and look forward to discussing potential co-productions with foreign partners since we are convinced that our product is up to international standards. Traditionally, we participate in the major TV markets (NATPE, MIP-TV, L.A. Screenings and MIPCOM) where we close deals discussed during the year. For us, NATPE is a great opportunity to sign one or two feature deals with American independent producers. We keep product from more than 100 companies under license. Even the smallest deals contribute to our success.”

Dmitry Nesterov, head of Acquisitions, RTR, Russian Television & Radio:
“Like all other Russian channels, growing national product is diminishing the presence of American product. Several years ago we broadcast seven American films a week. Now we’re down to only two, mainly blockbusters. We air very few foreign series. It’s very difficult to find a good foreign series for our audience; however, if we find a good one, we’ll will buy it. The average American product is not successful on Russian television. This is due in part to the history of Russian television — we had very few channels and little foreign product on TV until 1993. Meanwhile, during the last few years, foreign cinema has deluged Russian TV screens with more than 20 foreign films a week. Viewers were saturated with foreign product. Today’s Russian viewers are more interested in what is going on domestically, and they crave product unique to Russian life. While we work with American partners (including Paramount, Warner Bros., and Columbia) and are always on the lookout for a great American film, our newest strategy is to increase the national product on our channel’s schedule.”

Alexander Oleynikov, general producer, NTV:
“Our politics of acquisition are similar to other channels’. Acquisition of foreign product is decreasing while local product is on the upswing. Blockbusters and good films are the only foreign products that are successful on our channel. Currently, Russian series are replacing foreign series. At present, we broadcast two foreign series and three Russian series daily. We will, however, continue to work with American partners. We have a big contract with Warner. Bros., and we are quite content with the quality of their product. In my opinion, there are three factors that dictate a product’s potential success: its cost, its viewership shares, and the cost of advertising. We strive to buy theatrical films and movies licensed on video because these products tend to be very successful. The theatrical release of any film guarantees it will succeed on television. We are planning to attend NATPE. Our main goals are to make contacts with key majors, and to acquire films, series, and foreign formats for our channel. The problems with acquiring American product pertain to the peculiarities of American culture. American culture is different from European and Asian culture in that it assumes certain universal norms of understanding. Qualified American product must be understood by audiences everywhere, in Singapore, Russia, Belgium, etc.”

Sergey Fiks, Film Department director, NTV Plus:
“We desire quality product regardless of its origin. In the past, we traditionally purchased American films to attract viewers to our channel. But now we are seeing an abrupt reduction in interest in American product. Meanwhile, national product featuring our stars and our reality is becoming much more popular. Our goal is to create our own libraries of programs. ORT, RTR and TV6 have their own libraries of series and films, NTV doesn’t as of yet. We plan to fill our own libraries with national product and invest in domestic production. Currently, 50 percent of our primetime schedule is American product; 50 percent is European and Russian.”

Alexandra Vinogradova, program manager, TV6:
“Currently our intent is to buy quality product from foreign partners. After our channel changed its top management, our schedule and viewership changed. Our target audience is businessmen and intellectuals. We broadcast news every two hours. Our specific format coupled with quality product enables us to be tough and competitive, which is very important for an independent national channel. In the past, we broadcast foreign feature films and series. However, for the last two or three years, we have not been able to find series abroad that could effectively compete with our domestic product. When choosing American product, we concentrate on films with recognizable stars and genres. Interest in national product is currently very high and we want to invest in our own production and form our own library of programs.”
In January, TV6 shuttered after the Media Ministry revoked its broadcast license.

Igor Bortnikov, chief editor, CENTER TV:
“We continue our relationships with our American partners: Fox, Warner Bros. and Paramount. Films from these companies score high ratings on our channel. But recently the number of successful foreign films has dropped. The expectations of our American partners do not match the realities of our Russian audience. We prefer the creation of national product over the acquisition of big foreign packages since we can’t be sure that our audience will relate to the foreign product. National product is currently favored on our schedule with European product right behind it. Last year, we had some good Hallmark product on our channel. We also maintain our relationships with Russian distributors representing American companies, Miramax in particular. Crocodile Dundee was one of the most successful American films broadcast on our channel. Good American films cost big money. Meanwhile, we could channel that money into the creation of national product. At NATPE, we plan to visit the majors and buy good packages of movies assuming the cost is not too high.”

Anastasia Bialobzheskaya, program manager, CTC:
“Our channel was founded by StoryFirst Communications (USA). We were one of first Russian channels to position our own programming concepts. Our success began with the series Beverly Hills 90210. Now we are considered the number one entertainment channel. One of our biggest advantages is bright, original programming. We concentrate on acquiring American films and adventures series. Russian viewers will watch good television product. Since American products and actors are well-known, they are easier to promote than European products. American series and feature films are a big success on our channel. Currently, we are also concentrating on producing our own series including comedies, game shows, and drama series. Despite the fact that we continue to purchase product from the bigger studios, our present goal is to increase our share of Russian product by developing our own shows.”

Boris Khanov, head of Film Broadcasting, M1, First Moscow Channel:
“American product currently dominates our schedule. Our structure is very different than other channels. Our revenues cover all our expenses including production and program acquisition expenditures. We have our own strategy. We prefer American movies to European films due to ratings differentials. American stars appear to be stronger than European celebrities. When Russian viewers watch TV, they crave recognizable scenarios and stars.”

Andrei Dementiev, chief producer of Film Broadcasting, REN TV Channel:
“Russian TV currently favors local programming. There are no American series successfully competing with Russian series. This is not a question of quality. The quality of American series is actually better. It’s strictly a question of what our viewers want to see. Our audience wants to watch national product: our life, our realities, and our stars. That is why we aim to reduce our acquisition of American series and invest in our own productions. We broadcast two Russian series daily and one American series twice a week. In the future, we will cut back the broadcast of American series to once a week. However, in terms of feature films, 90 percent are of American origin. We want to buy ‘A’ movies with big stars. Our American partners are Fox, Warner Bros., Universal, and Paramount. The X-Files and The Simpsons were the most popular series broadcast on our channel.

Elena Sunbeam is an author and organizer with an M.A. in linguistics and intercultural communications. Educated in Moscow’s Academy of Theatre Arts and Moscow Linguistic University, Sunbeam came to the TV business in 1997. She founded Planet Sunbeam in 2000.