Viacom Takes Control for MTV Russia Relaunch
- By Alexander Panin
- Oct. 01 2013 00:00
- Last edited 20:33
Global media giant Viacom will relaunch its world-famous MTV channeláon Russianácable and satellite networks Tuesday,ápart of a strategy toáfocus on a local market that promiseságrowing audiences.
With 8 million more households expected to subscribe to paid television by 2017, Viacom is keen to join Western companies like Disney and guarantee its share of the market.
First launched in September 1998, the music channel was from 2007 run under license by Viacom's Russian partner, ProfMedia, owned by oligarch Vladimir Potanin. After several years of decliningáaudience share, it stopped broadcasting in September 2012.
Abandoning the MTV brand, ProfMedia replaced it in June witháthe entertainment channeláPyatnitsa, which in Russian means Friday. At the same time, ProfMedia's license foráMTVáexpired and Viacom took back full control over the channel.
ProfMedia declined to comment, but previous news reports said company CEO Nikolai Kartozia had admitted failing to broaden the audience. The channel had been flooded with entertainment shows, resulting in a loss of popularity.
"MTV is a great channel, but the audience is too narrow for a national terrestrial channel and ProfMedia finally realized this," said Peter Gerwe, founder of STS, theáfirst privately owned television station in Russia, and now member of the board of Sistema Mass Media.
Robert Bakish, President and CEO of Viacom International Media Networks,áput a positive spin on the summer's events:á"We had a very good experience with our partners but are thrilled that we can now take complete control and bring the Russian consumer the MTV that the rest of the world shares — a combination of global programming that we source from the U.S. and Britain, as well as local content produced in Russia."
The reborn MTV will be a completely different channel, he said, with new faces, new music and new content.
"You will continue to see a mix of music. There will be music videos and more packaged music, such as recordings of live events that we do all over the world," Bakish said.
The channel will also host reality and documentary entertainment programs, made globally and dubbed in Russian, supplemented by locally tailored programming.
"That is the MTV that you will see, and it will continue to grow from there. As it grows, our investment into content will continue to increase," Bakish said. Some programs will be coming to Russia for the first time.
Despite these plans, importing a Western brand into the country is not an easy task, experts said.
"First, you must remain true to the brand. Second, and almost more important, it must be localized,"á Gerwe of Sistema Mass Media said. "The audience needs to feel that it is "their" channel, and it must have an authentic Russian look with significant local production, which is expensive and must be budgeted efficiently."
Viacom management seems awareáof this, stressingáthat localization and relevant content are crucialáfor aágood audience share.
"Dubs are very important," the Viacom International chief said. "And it is not just the translation, it is also having relevant anecdotes and localizing conversation in addition to language, and we spend a fair amount of money doing them."
However, Bakish does not see Russians as being very different from other people in terms of viewing preferences.
"Just like other people around the globe, Russians love to be entertained. They certainly like to see great content, and as in the rest of the world they want it to be relevant to them. There may be some variations, some specific franchises they like, but I would say from the content perspective that we have seen more commonality than not," Bakish said.
Viacom has been in Russia for 15 years.áMTV is its third country-specificáinitiative, afteráNickelodeon,áwhich isáaimed at children,áandátheáParamount Comedy channel. In early 2014 the company plans toáintroduceáa fourtháventureá—áa Paramount movie channelásupported by advertisingárevenue.
So far,átheácompany'sáchannelsáare doingáwelláin terms of audience share, and Viacom expects the market to growáfurther as the penetration levels of paid television in Russia risesátowardáthoseáin Europe or the U.S.
Nickelodeon has become the number one kids'ánetwork on paid television.áParamount Comedy,ágeared atáan adult audience, is alreadyáin the top 25 after only a year on air, Viacom said.
Viacom'sáchannels are oriented at specific target audiences,áputting the company inálineáwitháthe overalládevelopmentáof theámarket, analysts said.áBut experts see more potentialáin Russiaáfor MTV than foráViacom'sáotheráchannels.
"We are more optimistic about the growth of MTVáthanáthe prospects foráNickelodeon," said Alexander Gadalov, head of the marketing planning sector at J'son & Partners Consulting. "There are other very strong players on the kid's television networks, such asátheáKarusel and Disneyáchannels. MTV,áon the other hand,áis a world-known brand and offersáanáintuitively recognizable format and will encounter less competition."
TheáRussian paid television market is one of the biggest in the world,áaccording to J'son & Partners.áBy the end of 2012, there were close to 32 million households connected either to cable, satellite or Internet television networks. And the market is growing. Consultants estimate that there will be more than 40 million households watching paid television content by 2017,áwhileámarket penetration will reach 74 percent.
Still, paid televisionáremainsáa relatively small market compared to broadcast television,áwhich soaks upáallámajoráinvestment,áexperts said.
However, a nationwide transfer to digital broadcasting is on the horizon and is already casting a shadow on the industry.
"In the next five years, Russia will be switched over from analog to digital,"ásaidáGerwe. "This uncertainty, frequency allocation, channel placement, and cost of broadcasting makes for a very difficult investment climate."