CTC enters ad sales arena

Change in Russia law gives broadcaster entree

Russia’s leading commercial TV network CTC Media is launching its own direct advertising sales house, taking advantage of a change in broadcast regulations.

New law restricts any company from holding a market position bigger than 35%. This means that Russia’s biggest airtime sales house Video Intl., which shifts around 60% of the country’s TV advertising, will have to allow others to enter the market.

CTC has reached a preliminary deal with VI to curtail the existing agreements — understood to run through 2012 for the main CTC channel and through 2014 for subsidiary channels Domashny and DTV.

CTC CEO Anton Kudryashov said the decision came on the back of strong second-quarter figures, which had rebounded after last year’s advertising slump.

CTC Media’s revenues year on year for the second quarter were up 15% in U.S. dollar terms to $130 million compared with last year’s $114 million, although when translated into rubles the increase was only 7.4%.

With the group’s Russian channels now almost sold out for the year and pricing levels up for the second half of the year and the fourth quarter in particular, the company is expecting full year growth of 10% in ruble terms.

Anton Charkin, VI’s spokesman said it was negotiating fresh agreements with many of its client channels.

“We’ve always maintained that the charges we made for our services were not for purely selling advertising, but for providing analysis, ratings and legal advice,” Charkin said.

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