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April 26, 2006
What Is Russian Media?
The Issues of Government Ownership and Media Control

Verstakov.jpg
Anton Verstakov at Discovery Institute April 17, 2006

Last week my good friend Anton Verstakov spoke at Discovery Institute in Seattle about the freedom of the press in Russia and state control of the Russian media. Anton is a news editor for the Russia Today TV channel in Moscow, Russia’s only 24/7 English-language news network. Anton also has his own documentary movies company, AV Productions. Before he joined Russia Today TV, Anton worked as a reporter and producer for the Russian channel RTR (Rossiya). Anton shared some important facts with us and two day ago his speech was aired on TVW, Washington State's public affairs network. You can click here to listen to the event on TVW's website. I want to share some of his insights and first-hand experience breaking the news in Russia with our readers.

First of all, Russia isn’t Iran or Syria, and people freely protest against Kremlin policies, including state media ownership. Mr. Illarionov, the former advisor to President Putin who now works the Western lecture circuit, recently compared Russia to these Mideast dictatorships at a conference I attended. Mr. Ilarianov also said many other bizarre things in his speech, but these will be addressed in a future post.

On April 16, there was a big demonstration in Moscow, coinciding with the 5th anniversary of state-owned Gazprom Media’s purchase of the formerly private NTV channel. Protestors’ posters read, “Take away the remote from Putin”, and “Channel One, stop lying!” However, according to Mr. Verstakov, everything isn’t that simple.

Russia Blog did some research after Anton’s talk, and learned that NTV indeed was a private TV channel, owned by the exiled oligarch Gusinsky. More than half of the salaries paid by the channel were distributed under the table and off the books. Often, if the “official” salary of an NTV journalist was only $700 a month, the under-the-table total was $3,000 or more. Keeping fraudulent and real sets of books and spending cash left and right, NTV ended up borrowing $1.2 billion from Gazprom, beginning in 1997.

NTV-Logo.jpg
NTV logo

According to the terms of the loan, NTV agreed to put up the channel’s property (cameras, studios, brand name, etc.) as collateral. In 2000, NTV defaulted on its debts, and after another year of paperwork the channel changed ownership. Gazprom wanted to make the business profitable and slashed the journalists’ salaries back to the “official” levels. Hundreds of journalists resigned in protest. In the hopes of finding foreign funding and support, many of the former NTV employees played the “Russia is turning into a dictatorship” card, but very few people were listening, and NTV became another holding of Gazprom Media. Gazprom Media is a property of Gazprom, the state-owned energy giant. This week the International Herald Tribune reported that Gazprom produced $4.6 billion in profits in 2004 and has $14 billion invested in businesses unrelated to oil and gas.

To put the acquisition of NTV in perspective, I thought I would provide the following snapshots.

First, the basic numbers. In Russia today there are over:
- 1,100 TV channels (five major networks and three nationwide channels)
- 670 radio stations
- 50,000 newspapers

How significant is state ownership of the media in Russia? Let’s look at a few more basic facts:

- The total Russian federal budget for 2005 was $104 billion
- The Russian government manages Federal Properties (real estate, companies, and shares in business)
- Federal property can be used for gaining profits that are supposed to contribute to the federal budget

The main difference from many other countries is that Russian government is a major player in the global marketplace. It can buy, sell, profit, lose…

And now, the most important question for our readers - how much does the Kremlin control the Russian media?

The truth is state-owned media outlets do not command the majority of the Russian audience. The state owns Russia Today TV, All-Russia State Broadcasting Company (VGTRK), a controlling share of the “First” Channel, the RIA-Novosti News Agency, and a controlling share in Gazprom which owns 86% of Gazprom-media holdings. The Russian government doesn’t exercise direct ownership of NTV. It would be proper to say the Kremlin has a controlling share of the company (Gazprom) which has 86% of the company (Gazprom Media) that owns the channel NTV. Gazprom Media is the largest media holding in the nation, and consists of:

- NTV Channel, which covers 85% of the territory with 10-12% audience daily share
- NTV Plus Satellite Network (similar to the Comcast on-demand cable service, focused mostly on sports and movies)
- Echo-Moscow Radio (Moscow city FM station)
- “7 days” Publishing House (publishing the Russian equivalents of The Star tabloid and People magazine)

The most important state-owned media conglomerate is VGTRK – the All Russia State Broadcasting Company. VGTRK is made up of:

- “Russia” (RTR) Channel, which covers 90% of Russian territory with a 20% daily audience share
- 80 local TV-stations
- “RTR-Planet” Channel (broadcasting via satellite for Russians abroad)
- “Culture” Channel (has no commercials and shows only historic movies, concerts and cultural programs)
- “Sport” Channel (shows nothing but sports, including the most popular sporting events, U.S. boxing matches)
- “Radio Russia” and
- 25% share in Euronews channel. Yes, 25% of the very popular Euronews channel is owned by the Russian government. It’s done not for political purposes, but for pure profit.

Now, how much of the Russian media is privately held and NOT owned by the government?

- Ren-TV Network
- “TV-Centr” Channel
- The vast majority of Russia’s 50,000 newspapers
- The vast majority of Russia on-line news sites
- Most Russian radio stations

Ren-TV Network consists of 406 commercial TV-stations in Russia and the CIS, reaching an audience of 113 million people (the CIA World Factbook pegs Russia’s population this year at 142 million). Ren-TV Network ownership is split into two pieces, where 30% belongs to the RTL Group, and 70% is owned by another natural resources giant, Severstal, which belongs to the oligarch Aleksey Mordashov.

TV-Centr Channel has an audience of 90 million, and has a subsidiary TVCI International, which broadcasts via satellite to Russians living abroad. TV-Centr is 99% owned by the Moscow government. The Moscow government is an entity of its own, which Russia Blog has touched on in few posts about the mayor and his wife and their friends.

The largest circulation Russian newspaper, Argumenti I Facti - AIF (Arguments and Facts) is private, and reaches 10 million people. Besides the newspaper, the corporate publishing house owns 5 magazines and 3 other newspapers. Trud (Labor) newspaper is a former Soviet-named newspaper, and is rather popular today with over a million readers. 76% of the AIF publishing house belongs to “Promsvyazcapital”, which is the property of the Ananyev brothers.

RussiaToday-SashaYoung.jpg
Russia Today TV presenter Sasha Twining

Mr. Verstakov made the point during his talk that Ted Turner influences the editorial policy of CNN. Rupert Murdoch and Roger Ailes of Fox News make broad decisions about what programming airs on their network. There is no actual censorship in Russia, but there is ownership control, as in any other country in the world. So, how often do we expect CNN to report stories embarrassing to Ted Turner?

Consider the example of the Echo-Moscow Radio station. Mr. Verstakov correctly stated that is it is owned in exactly the same arrangement as the NTV channel, and is probably more popular among Muscovites than NTV. This major radio station has long been known for broadcasting hard-hitting news and strong criticisms of the Kremlin. Again, chasing profits more than political advantage, the Kremlin has maintained the old format and made the station even better. At the end of the day, as with the BBC’s frequently adversarial reporting against Tony Blair’s policies in Great Britain, the media outlet most critical of the government is owned by the government.

RussiaToday-Technician.jpg
A technician works with a teleprompter at Russia Today TV

The main point that Anton Verstakov made was that while the Russian government controls a significant portion of Russia’s media, it does not exercise this control in the way Americans would think. "It’s not censorship control, it is ownership control". The media outlets controlled by the Russian state don’t have as much impact or reach as large an audience as the private broadcasting channels and independent stations. According to the statistics cited above, only one out of every four Russian citizens gets their information from the government-owned media, the rest get their news from privately-owned sources.

UPDATE: We wanted to give Russia Today's Anton Verstakov the chance to clarify his remarks:

Hello guys! I have IMPORTANT THINGS TO SAY!

I had no chance to read through the RB's report on my speach before it was published. So PLEASE note there are things I DIDN'T SAY.

First of all I didn't say Ted Turner decides what’s shown on CNN and Rupert Murdoch makes decisions about what programming airs on his networks. This is important - they DO NOT DECIDE THAT. They approve the editorial policy - which is a fair and balanced coverage at CNN, for example. Defining the editorial policy is something of the Owner and Founder responsibilities. WE CAN EXPECT CNN to report stories embarrassing to Ted Turner. Cause THAT IS AN IDEA OF THE COMPANY.

So the OWNERSHIP CONTROL of the Russian Government is not censoring the content but defining the editorial policy (to inform the audience, to make the channel profitable, to make it professional, to make it interesting and trusted) - that has NOTHING in common with deciding of what stories to show and how not to embarrase the government.

Regarding the issue of the government acting as a market player - speaking at Discovery Institute I noted that from my personal point of view that is theoretically wrong. But at this stage of the unprecedented transitional period, Russia is surviving through that could be an ONLY MEASURE TO STAND for the country and nation.
Thank you for the kind comments and words about Russia Today channel!

Anton



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The Issues of Government Ownership and Media Control
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Comments

Dear Friends,

While we're on this topic of media ownership and content control – RussiaBlog's editors have decided not to post any more comments from our reader and former contributor Kim Zigfeld. We made this decision due to the sheer daily volume of her comments (which she constantly demanded we respond to and fact check or rebut) and frequent abusive language directed towards us and our readers.

If you would like to read what Kim thinks of us and Russia, please visit her website http://www.russophobe.blogspot.com/

Thank you for reading Russia Blog!

Yuri

Yuri, an informative read.

I hope that Russia Today succeeds.

I am concerned on whether it's tapping the best possible resources.

Mr. Verstakov made the point during his talk that Ted Turner decides what’s shown on CNN. Rupert Murdoch and Roger Ailes of Fox News make decisions about what programming airs on their network. There is no actual censorship in Russia, but there is ownership control, as in any other country in the world. So, can we expect CNN to report stories embarrassing to Ted Turner? No. Then why do we expect government-owned channels to frequently criticize the government?
Yuri: You often claim that you are avid fan and practitioner of capitalism. The above sentence is a clear indication that you do not firmly grasp what capitalism or press freedom means.

When a government makes editorial decisions, it IS censorship, not "ownership decision." The government, particularly a central government, isn't simply another private actor in the marketplace!

If you don't get that, you really did not learn anything about how capitalism or free press works in the U.S.

James, I've had many arguments with Anton, and if you look at my posts about Ren-TV and other media issues, you'll know that I'm on your side of the fence. In this post I just wanted to re-tell Anton’s speech, backed by multiple links and facts. This is not my point of view. I personally find it wrong that the Russian government is allowed to be a market player. So, please don't take this article as my personal opinion. I don't quite agree with Anton, however I strongly disagree with Illarionov. I’m somewhere in the middle; I'd say things are wrong, but not as dramatic as some people think they are...

Andrew

Hehehe. I know what you're referring to and I agree.

James and Yuri

Good exchange.

I personally find it wrong that the Russian government is allowed to be a market player.
I repeat, the government cannot just be another "market player." Turner and Murdoch don't control an air force or have prisons.
but not as dramatic as some people think they are...
I have always subscribed to the idea that things are rarely, if ever, as bad or as good as people say they are.

A wink, wink to Andy and Alexandra (some day, some way).

Folks, "government controlled media" as such is evident in a number of countries considered as democratic by the Western elitny.

To an extent, this exists in the US as well. A glowing example is the Voice Of America which is an organ of the American government. Kindly note that the VOA has over the years had a better reputation than Radio Free Europe/Radio Liberty. The latter of the two isn't an American government organ (though it relies heavily on funding from the American government).

So, "government control" of media isn't necessarily bad.

Let's keep in mind how some Russian oligarchs Russia continue to control media outlets in Russia and abroad. Note how some of the oligarchs use media as a means of getting their points across.

For some politically incorrect insight that will get some raised eye brows across the political spectrum, I reference:

Russia Today in the Global Market
http://mediatalk.guardian.co.uk/WebX?14@631.UZnbjWIEOPR.23@.77505420/10

The media business has its definite cut throat aspects. A niche in it should exist for well meaning individuals who want to exhibit what journalism is ideally about (fact based, opinionated, while directly addressing opposing views).

Russia Today has great promise. It might not succeed even if it reaches the best standards of journalism. The competition in the same market is very intense. As of right now, I consider RT's half hour news segement to be competitive with what's found elsewhere (I'm a news junkie). The second half hour of assorted features is open to some changes in the future (I understand this to be the position of RT management).

For those having not yet seen Russia Today, I'd urge them to check it out at:
http://www.rttv.ru

Hello guys! I have IMPORTANT THINGS TO SAY!

I had no chance to read through the RB's report on my speach before it was published. So PLEASE note there are things I DIDN'T SAY.
First of all I didn't say Ted Turner decides what’s shown on CNN and Rupert Murdoch makes decisions about what programming airs on his networks. This is important - they DO NOT DECIDE THAT. They approve the editorial policy - which is a fair and balanced coverage at CNN, for example. Defining the editorial policy is something of the Owner and Founder responsibilities. WE CAN EXPECT CNN to report stories embarrassing to Ted Turner. Cause THAT IS AN IDEA OF THE COMPANY.
So the OWNERSHIP CONTROL of the Russian Government is not censoring the content but defining the editorial policy (to inform the audience, to make the channel profitable, to make it professional, to make it interesting and trusted) - that has NOTHING in common with deciding of what stories to show and how not to embarrase the government.
Regarding the issue of the government acting as a market player - speaking at Discovery I noted that to my personal point of view that is theoretically wrong. But at this stage of the unprecedented transitional period Russia is surviving through that could be an ONLY MEASURE TO STAND for the country and nation.
Thank you for the kind comments and words about Russia Today channel!

Anton

Congratulations on dealing with the recent 'SPAM' problem. It was making the Russiablog unreadable.

As for the question of censorship, it exists everywhere, especially here in the West. It's just far more sophisticated and many of my journo buddies agree. It is a business after all...

The obvious example here is the BBC Charter that comes up for renewal evey 7 or so years (i.e. a poll tax). The british government uses this to push what it considers is in the 'public interest' & the state's interest, but who are they to judge?

We could also mention the 'Gillian affair', where he orignally raised government hackles over his reporting from Kosovo and then became a full target of the PM's Spin Meister Alistair Campbell over the WMD story/Dr. Kelly.

A quick example of BBC 'correctness': they quite happy to mention the word 'genocide' in connection with Bosnia, yet almost every single BBC journalist who writes about the Armenian genocide, is if by rote, describe it as 'mass killings'....

Being a bit of a balkanite myself, I've seen directly how badly the reporting on the balkans over the last 15 years and it is not just through sheer ignorance (of which there is still plenty). There are many cases of the Media at least willing to play the role of 'useful idiot' if not sheer partizan opinion. Fortunately the advent of the Internet and Blogging has cracked right open the cosy relationship between the networks and power centers. Information only needs to be leaked once, and it is out in the wild forever...

Back to Russia, it's clear that Putin has a 'sensitive' media soul (rather strange for a spook n'est pas?), though I really wonder to what extent government policy vis-a-vis the Media is a result of the Kursk debacle (amongst others)???

I don't think Putin et al are doing themselves any favors by 'regulating' the media in the medium to long term - if that is really their goal or if it is only a short term measure considered 'necessary' until Russia is more 'mature' - but it certainly was pretty wild until then, being at the hand of the Oligarchs. Just look at the news now and see that the Serbian authorites have just shut down BKTV (Braca Karic TV) as part of their fight against this considered oligarch and supporter(!) of Milo, despite BKTV and PinkTV being the most popular and profitable channel in Serbia. There is total silence regarding this coming from the EU & the US. It seems to me a fairly clear example of where 'extra measures' are allowed in one country if it is deemed of benefit to foreign policy, yet in another, they behave like a bunch of screaming cassandras!

Re RFT/RL, I seriously don't like it, but their polish correspondent covering Byleorussia wrote some very good pieces on the Polish attempt (on behalf of the americans?) to engineer a crisis between the EU and Bylerussia last summer over the polish minority there. His report put many of the leading media outlets in western europe to shame.

Strange but true.

We need to add that so called "double accounting" still a practice in Russian biz.In 1990s Governments 1st channel(ORT) controlled by B.Berezovskiy used same practice of tax evading ,and I suspect another media acted same way.
3K USD is a good money for reporter in Moscow and Seattle ,but problem that only minority of staff get 3K or more,most earned 700-800 or about it.

Interesting read. Raises for me this question: beyond “ownership,” what legal protections exist for the press, and what controls exist for content? For instance, here we have the FCC that regulates content on the broadcast of radio and TV over licenses granted by the state. This does not affect “news” so much as it affects entertainment or “decency.”

I am of the opinion gov't owned media is a bad idea. Both the NPR/PBS in the US and the BBC in the UK are nothing more than propaganda organs for the elites in both countries.

Since their funding is secured, they don't have to compete for market share and listeners. As a result, they tend to cater to the aristocracy, and by aristocracy, I am referring to the entertainment, academic, and business professionals who support socialist/marxist causes because it a) assuages their guilt about their own wealth and b) makes them feel morally superior to the rest of the unwashed masses.

I'm a United States citizen. The media here is privately owned. It does not supply me, personally, with relevant and important news that might give me an honest understanding of the world. (Except sometimes The New York Times, which is a good newspaper) The major news channels here in the United States usually tell us about things like fires or murderers, with a nice human interest story thrown in for good measure. I'm not an expert on this, because I have stopped watching television long ago.

At this point, I get most of my news from NPR (National Public Radio) & the internet.

I remember the time when I became most disturbed by the reporting in my local newspaper, The Plain Dealer. There was an article about protests in Seattle outside the WTO talks. I had no idea why these people would be so upset about something like the World Trade Organization. It began a long search on my part that has led to a very different world view than the one that the majority of North Americans have been encouraged towards. It's not a matter of easy public understanding that the WTO destroys the economies of small, third world countries.

When the North Americans went to war in Iraq, claiming Iraq's possession of weapons of mass destruction, it was not publicized across the country, in many major news outlets, that the opinion of Iraq's supposed possession of these WMDs was merely that -- opinion. There was a man who'd gone to Africa to try to determine whether Saddam had been buying uranium. He said that there was no evidence of this. The top American government officials leaked the identity of this man's wife, a CIA agent, to punish him. Because of my news source, NPR, I knew about this when it happened, years ago. But now, in the end of 2005, beginning of 2006, this illegal action is being publicized.

Another disturbing development in the news situation here in the United States is the government's requirement that reporters reveal their sources. (Ironic that the source of the CIA agent's identity was leaked by a government official anonymously -- in that case, they didn't want the identity of the leak known) Recently, a reporter was sent to jail for protecting her source. Now, the papers are even more careful about what they publish.

So. In the United States, the government doesn't own the media, but the media has been very friendly to the lies issued by the government.

i guess that this whole question of media & government control may be more complicated than we know.

Jason, you're joking, right?

Check out this garbage:

http://www.russiaprofile.org/cdi/2006/4/28/3618.wbp

I happen to know that Russian Sate Television has made earnest efforts to have on Richard Holbrooke, Wesley Clark and Madeleine Albright. They don't want to come on and as a result Russian State Television is accused of bias.

Holbrooke, Clark and Albright have no problems making it to shows like Charlie Rose, which rarely have on Russian and Serb friendly views. Rose is far from being an even keeled journalist. He's quite soft on the likes of Tom Friedman and the previously mentioned. Rose is noticeably more confrontational in those few instances when he hosts the likes of Sergei Lavrov and Amy Goodman.

When it comes to covering the coverage of Russia, media watchdog groups like FAIR and AIM aren't interested. For all its efforts at breaking into the English language news market, Russian government funded media operations appear lacking in this regard as well. They need hard hitting analysts who speak American and are familiar with the antics of Rose, Fareed Zakaria, Bill Kristol, George Will and a cast of many others.

Some politically incorrect media observations that have some (I stress some)relevance to present day realities:

http://english.intelligent.ru/cgi-bin/loadtext.pl?id=9363&file=letters/letter_e0125.htm

Derek, no I am not. Your comment brings up a good point though. Depending on which side of the political aisle you are from, will color what media sources you consider to be "fair and balanced". There simply is not a mainstream source of media that exists in this world today that both sides of political divide would consider truthful or fair in is reporting of news. It is definitely not the BBC or the NYT, as everyone knows, those are leftist/socialist media sources.

Calling NPR and PBS propaganda organs of the elite may be one of the most retarded statements ever made on an internet message board.

To the Greek Orthodox church and the other demon democracy we say, persecuting the Jehovahs' witnesses is wrong, they are peaceful people who spread the word of Christ and his Father Jehovah because they know who the King of peace is, it is not their fault the trinity is a lie and what you practice is abhorrent, your priests with their garbs of gold and purple sit there drinking the blood of the prophets. You let godless men take over your country and you hide away in the shadows like the cowards you are, while millions of your brothers and sisters were put to the flame, then you asend with the other demon democracy to laud it over good people again,
Ephesians 6:11,12 Put on the complete suit of armor from God that you may be able to stand firm against the machinations of the Devil; (12) because we have a wrestling, not against blood and flesh, but against the governments,against the authorities, against the world rulers of this darkness,against the wicked spirit forces in the heavenly places.the heavenly places referred to in that scripture are your churches, the cross is a symbol made of wood dead.this is demon worship,
Deuteronomy 5:8,9,10 You must not make for yourself a carved image any form like anything that is in the heavens above or that is on the earth underneath or that is in the waters under the earth. (9) You must not bow down to them or be led to serve them, because I Jehovah your God am a God exacting exclusive devotion, bringing punishment for the error of the fathers upon sons and upon the third generation and upon the fourth generation in the case of those who hate me 910) but exercising loving-kindness toward the thousandth generation in the case of those who love me and keep my commandments.
John 4;23,24 Nevertheless, the hour is coming, and it is now, when the true worshipers will worship the Father with spirit and truth, for, indeed, the Father is looking for suchlike ones to worship him. (24)God is a spirit, and those worshiping him must worship with spirit and truth.
the cross has been used to unite the Father and the Son in an abhorrent way,
Nahum 1:2 Jehovah is a God exacting exclusive devotion and taking vengeance; Jehovah is taking vengeance and is disposed to rage. Jehovah is taking vengeance against his adversaries, and he is resentful toward his enemies.
and all adoration is His and thru Jesus Christs loving sacrifice we can approach our Supreme Father Jehovah in supplication and prayer. Jehovah does not kill he uses the right hand of justice Jesus. We urge you to cease your actions against the Jehovahs' witnesses and to advice you that you are truly standing on shaky ground
Two dressed in sackcloth

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Russia Blog presents up-to-date news, facts and commentary on the state of events in Russia and the former Soviet Union. The blog is managed by Yuri Mamchur, Director of Discovery Institute's Real Russia Project, a member of MBA class 2011 at Vanderbilt University's Owen Graduate School of Management, and a composer in his spare time.


 






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