Russia’s Duma has passed a bill banning advertising on pay cable channels in an attempt to prop up the businesses of Russia’s state-owned TV networks, which have been losing market share to newer channels.
In 2003, 58% of Russian households watched Russia’s “big three” channels, owned by the state and Gazprom Media, while today only 40% do, according to Russian consultancy TNS. The percentage of households who watch cable and satellite channels meanwhile has risen to 12% over the same period, notes the Financial Times story.
Today 33.5 million Russian households, or more than half the country, pay for premium cable and satellite channels, with 9% more Russian households signing up for subscription channels in 2013 alone.
In comments to the media, the bill’s author Igor Zotov, a deputy for the Kremlin-friendly A Fair Russia, said the legislation was meant to create an even playing field for the country’s basic cable channels, which are free to users, and cable channels, which make money from both ads and subscriptions.
One Russian TV industry executive argued that the principle of the bill was not entirely wrong: in the US, for instance, cable channels must choose whether they want to live off subscription or ads.
But he added that bill was seriously flawed in its current form as it did not differentiate between bigger cable channels such as Discovery which collect money from both ads and subscription, and smaller cable channels that are free for viewers and rely solely on ads.
The bill was passed after just two weeks of discussion on the last day of the Duma’s spring session, and will now go to Russia’s upper house of parliament, the federation council, before being signed President Vladimir Putin. The legislation is set to take effect next January.
Ilya Ponomarev, a Duma deputy and member of the anti-government opposition, said he believed the legislation had been drafted for commercial rather than political reasons, nevermind that the vast majority of advertisers work primarily with the basic cable channels.
See the full Financial Times story here.
