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Russia Profile
October 21, 2009
A False Alarm?
National Media Group Denies Plans to Outsource its News Production

By Roland Oliphant

Last week, Russia’s liberal establishment was perplexed by the announcement of changes at REN TV and the St. Petersburg Channel Five. The two stations, lauded as the last bastions of independent broadcasting on Russian television, are undergoing restructuring, which could potentially see their news services taken over by another company. But is it a move by the state to bring to heel the last remnants of independent reporting on television, or simply a pragmatic management decision prompted by hemorrhaging advertising revenues?

The restructuring, which was reported by the Kommersant business daily last Friday, began with a reshuffle of managers at the two stations and the National Media Group (NMG), the company that owns both stations. In spring, Vladimir Khanumyan, the former director of STS Media, was made general director of NMG’s newly created television division, NMG-TV. According to a press release from the company, from October 23, Alexander Ordzhonikidze, the former general director of REN TV, will become the chief of NMG.

Business newspapers were curious about the realignment of managers, and the staff of Channel Five were so alarmed by the prospect of losing their jobs and their distinct identity as a St. Petersburg (rather than Moscow) station, that they fired off an open letter to leading politicians, including President Dmitry Medvedev, Prime Minister Vladimir Putin and the speakers of both houses of Parliament.

But outside the business and television communities, the machinations of the NMG’s top management have made fewer headlines than the claim (denied by Khanumyan) that REN and Channel Five will from 2010 no longer produce their own news, but will take it from a division of RT (Russia Today), the state-owned English language channel whose office stands opposite REN TV’s headquarters on Moscow’s garden ring.

The claim raised eyebrows because REN and Channel Five have a reputation of the last bastions of semi-independence in their news coverage. Opposition politicians are not banned, and the coverage may even on occasion be overtly critical of the authorities. RT, on the other hand, is a state financed image project dedicated to presenting the Russian government’s point of view to the English-speaking world.

It is apparently a sensitive subject. RT’s press service refused to comment on the issue, but Khanumyan simply denied the claim. “The two channels produce their own news, they always have done, and they will continue to do so,” he said. Asked whether there were any plans for RT to take over REN TV’s and Channel Five’s news production, he said “of course not.”

That was echoed by NMG’s press service, which called it a “fundamentally important point” that “Channel Five and REN TV will continue to produce their own news.” And there seems to be at least some faith in this amongst the staff. Mariana Maximovskaya, a REN TV presenter whom one journalist described as “definitely not a Putin fan,” told the liberal Novaya Gazeta that she is “absolutely sure that REN TV’s information policy will not change in the near future.”

Disquiet in the ranks

Even if Maximovskaya’s colleagues share her confidence in the stations’ continued editorial independence, however, this does not extend to other aspects of the proposed changes. Channel Five’s staff began collecting signatures for an open letter to President Dmitry Medvedev and Prime Minister Vladimir Putin protesting the changes. The text of the letter, which quickly found its way onto the Internet, reminded the recipients that Channel Five is “the oldest in Russia, broadcasting since 1938,” complained that NMG planned to replace it with “another commercial Moscow channel, and St. Petersburg will lose its voice on air,” and warned of a “social explosion” as a result of redundancies. “There will be more than a thousand professionals on the street,” warned the letter. “The television market in St. Petersburg is very narrow, and for many there no chance of employment [elsewhere].”

“The staff of Channel Five reserve the right to mass non-violent protest,” the letter concluded.

On Monday, Khanumyan tried to tackle the brewing discontent at Channel Five head-on with an Email to all employees (also promptly leaked on the Internet) in which he apologized for the confusion caused by “inaccurate and often incorrect” stories in the press and tried to answer their concerns in order.

According to Khanumyan, the move is a strategic management decision pushed for by shareholders, designed to “streamline operations and optimize the business as a whole.” And it is not, he insists, about correcting anything as detailed as a particular station’s news coverage. “The goals are firstly to get Channel Five, which is a loss-making company, to break even, and then to reach a certain level of profitability,” he said. “Some processes will be streamlined, others will be outsourced ­ and that is why we are talking about restructuring. It’s very important to understand the bigger picture.”

He denied that “streamlining” was a euphemism for redundancies. Rather than abandoning the Northern Capital, said Khanumyan, the plans involve building a new television center in St. Petersburg that will provide technical services to other companies, and a third television channel to fill in the local niche that the St. Petersburg-based Channel Five lost when it went national in 2006.

Channel Five’s staff pointed out that the channel had popularity comparable to the State-owned channels Sport, Kultura, and Zvezda. But even they have not been immune to the shake-up in Russia’s television sector this year. Earlier this month the state media holding VGTRK announced that it would replace its six-year-old Sport channel with a new station designed to attract what it called “young and active viewers.” The change was widely seen as a response to heavy competition from private channels for broadcasting rights to major sporting events, but Khanumyan speculated that it was prompted by the same concerns as NMG’s restructuring. “The strategy is to address the new multimedia environment in which we will be living in several years. Whoever you are, the idea is to set up a family of channels and monetize the upcoming digital era from different distribution vehicles,” he said.

So there you have it. NMG’s re-jigging of its television division is simply a matter of responding to shareholder concerns and anticipating the future developments in technology.

Fair enough. But it is too early to say whether those reassurances will assuage either Channel Five’s staff, or critics who believe NMG is trying to put the last nails in the coffin of Russian television news independence. Kommersant, for example, noted in its commentary Wednesday that Khanumyan’s letter does not deny, or even mention, the claims about RT. That’s true, but neither did the Channel Five staff in theirs.

NMG would apparently like people to believe that Kommersant’s story was nothing but speculation. The authors of the article were unavailable for comment Wednesday, but to be fair, it was rather reliant on unnamed sources, and Khanumyan made clear that “it was not based on information they got from the company’s management.” But even if the reaction it generated was unexamined, the concern was genuine. REN TV and Channel Five are hardly troublemakers, but they do have enough of a reputation for independence to have thrown the liberal press into something of a panic at the prospect of losing it. “Independence is part of the brand, it’s part of their historical reputation, and these kinds of changes could really slice the audience share. It would be absolutely illogical for us to change that; we’d lose the audience,” said Khanumyan.

Liberals hope he means it.

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