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. Last Updated: 07/27/2016

Kapital Sets Precedent With Paid Circulation

The Russian-language business and management newspaper Kapital, published by Independent Media, goes on sale around Moscow on Wednesday as the year-old weekly seeks a wider audience and new sources of revenue.

The transition from free distribution to paid, which company officials say is virtually without precedent in the Russian market or elsewhere, is aimed at stemming losses approaching $1 million and broadening the weekly's reach to managerial and professional readers.

"We believe that there's a strong market for a newspaper that gives [readers] practical advice and information they can trust," said David Randall, managing director of Independent Press, Independent Media's newspaper division which also publishes The Moscow Times.

Company officials are hoping to achieve paid circulation of 40,000 a week by the end of the year, a level they say would ensure profitability. It typically takes a newspaper at least three years from its launch to turn a profit, and Randall said he hoped to achieve that target next year.

The regular 32-page weekly -- 40 pages in Wednesday's edition -- will be available at kiosks, metro stations and from street sellers, including 200 specially hired sales staff. Until now its distribution of 40,000 copies has largely been limited to a small number of Western-style supermarkets, business centers and hotels.

"The point of selling it isn't just to get money, it is to get it into places where people will recognize it," co-editor Mark Whitehouse said. "Once they read it, it should speak for itself."

With a recommended retail price of between 1,500 rubles and 2,000 rubles, Kapital will be priced well below other business publications -- such as Dengi, or Money, and Expert magazines -- a strategy aimed at winning market share, Independent Press group marketing director Lyndsay Henderson said.

A $250,000 Western-style marketing campaign is accompanying the start of paid circulation. It encompasses radio advertising, widespread free distribution in recent weeks and promotional giveaways, including a $30,000 Renault Megan hatchback.

"It's a huge marketing experiment, just like our newspaper is a big journalistic experiment," said deputy editor Leonid Bershidsky. The paper targets "the Russian middle class," Bershidsky said, with articles on management and professional issues, the job market, economics and general features.

Kapital also stresses a policy of no "hidden advertising," a practice common in the Russian press whereby reporters accept money from interests they write about.

Although the business media field is crowded, including Kommersant Daily and its weekly Dengi publication, editors said its managerial-professional focus earned it a distinct niche in the market.

Wednesday's cover story is about the top jobs in Russia. The issue also features the first installment in a series about salaries nationwide, based on the results of a professional survey of 195 foreign and Russian companies.

This week's paper will also be distributed in St. Petersburg, where Kapital plans to launch a regional edition.