MOSCOW – As Moscow’s main TV transmission tower blazed in the last days of August, it looked like the final straw for an industry that has been under a different kind of fire in recent months.
The repercussions of Vladimir Putin’s March 26 election as president have turned up pressure on broadcasters, making politics rather than commerce the main concern of most major players, many of whom now look distinctly nostalgic for the more relaxed Boris Yeltsin years.
Given that the future profile and management structure of the two main commercial channels — the top independent NTV and Channel 1 ORT (Public Russian Television) — looks distinctly uncertain, the purchasing policy of their buyers at Cannes this year are likely to be hesitant and short-term, to say the least.
Though political pressure is directed mainly at the outfits’ domestic news programming, many industry observers here expect major management changes in coming months, leading to inevitable readjustment of programming strategies.
The impact on the international market may not be that significant, however, given the continuing move by almost all broadcasters into domestic production. Following the initial lead of NTV in bringing locally produced series into primetime evening slots that were previously occupied by shows acquired from the U.S., almost all leading players expect to reduce their long-term foreign acquisition strategy.
“Future success with viewers is in locally made programming; the time of Brazilian soaps is coming to an end,” comments Sergei Vasilyev, head of top ad broker agency Video-Intl. Media-Service. “Within a few years, schedules will look very different, with up to 90% local programs, and American blockbusters showing no more often than once a week.”
The only bright spot in a market that looks distinctly stressed at the moment is the fact that economically the Russian advertising industry is at last picking up after the disaster of the territory’s August 1998 financial crash.
Television spend also continues to lead the general ad-market upturn, with local agency Russian Public Relations Group charting a 75% increase in TV spending in the first half of 2000 compared with the year-ago period.
Even though ads for local product have entered the market in a significant way alongside the major international brands, there’s still a long way to go before Russia’s general ad market achieves 1997 levels, which were close to $2 billion in spending. This year, the total should come in about half that, though even that marks a 32% increase on 1999, according to the Russian Assn. of Advertising Agencies.
Elsewhere, figures like these might have sellers lobbying for price increases on product. However, with Russia, any such arguments look unconvincing: Most buyers can truthfully argue that they’re too uncertain about the future path of the industry to make long-term decisions.