Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

For State TV Networks, Advertising Is Freedom

Russia's state television giants wilt probably never be the profit-driven independent networks that their American counterparts are, but they are realizing, as political pressure from conservatives mounts, that some financial independence has its advantages.

So it came as little surprise when Ostankino, Russia's largest network, announced that it would double its advertising rates beginning Sept. 1.

Ads will now cost up to $I2, 500 per minute for a prime-time slot, such as before or after the 9 P. M. news. Advertisers had been charged no more than $7, 000 for the same time previously. These rates are for foreign advertisers; Russian companies will be given a discount in rubles for certain time slots.

Why the steep hike? First there is the prestige element: the network wants to bring its rates closer in line with those in the West, arguing that Ostankino wilt be then be taken more seriously.

Raising rates should also ease Ostankino's severe budget problem, TV executives argue. Advertising presently covers a meager 15 percent of Ostankino's immense budget, which for the third quarter of this year was approximately four billion rubles, according to Oleg Slabynko, the network's youthful general director.

This amount, which except for the advertising revenue comes from the state, far from covers Ostankino's needs. The network is in debt 2 million rubles, salaries are not competitive, and three-quarters of its studio equipment needs replacing. In desperation, Ostankino has been known to accept betacams instead of dollars for its western ads.

But with 2 1/2 of its 19 hours per day of airtime given over to ads, revenues should be feeding far more than 15 percent of the budget. If Ostankino were doing things the way it should, Slabynko said, advertising would cover 75 percent of costs.

The fact that it does not is a direct reflection of the logistical disaster advertising has been at Ostankino ever since the first reklamy (advertisement) hit the airwaves three years ago. Despite repeated attempts to create a centralized advertising department that would control the flow of revenue, individual studios and producers have been allowed to cut their own deals; keeping the money for themselves rather than turning it over to the network budget. There is no one person to go to if you want to place an ad at Ostankino; you either talk to the programming director for a slot between shows, or the studio itself to place an ad during its program.

Following his predecessors, each of whom announced firm plans to create an ad department only to fail at following through, Slabynko says that Ostankino's advertising department will be up within six months. Until then ad rates are $12, 500 per prime-time minute, or whatever rate you can cut for yourself.