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. Last Updated: 07/27/2016

The Media Crisis

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I recently heard a heartbreaking story about a journalist who lost three different jobs in one month. He initially worked for a well-known daily newspaper owned by an oil magnate, but lost his job during staffing cuts. He soon found work with another publication founded by an oligarch, but it shut down after the second issue went to press. Next, he got a job with a media holding company that had held an initial public offering. But that company ran into problems as well, and the unfortunate fellow found himself once again looking for work. I don't know what finally happened to him.

In the context of the global financial crisis, Russia's media business is experiencing two very distinct consequences: widespread layoffs and a string of business failures. It is primarily the most outdated and the most cutting-edge media firms that are going under. By outdated, I mean the uncompetitive, subsidized companies; by cutting-edge, I mean those that are the realization of the fondest desire of the majority of large, successful media companies during Vladimir Putin's presidency -- namely, to go public.

The Russian media business finds itself in a paradoxical situation. On one hand, we are experiencing a crisis and the inevitable hardships it engenders. On the other hand, the country's media sector is anticipating a significant increase in advertising revenue this year and next year, and this is making media professionals in the West, who are facing the collapse of their own advertising markets, quite envious.

Today, Russia's leading publishers are preparing for the worst, but hoping for the best. They are getting ready for the coming year by cutting costs and staff to the minimum. At the same time, they are clinging dearly to their ambitious plans for development. I have heard from the directors of both Kommersant in Moscow and the newspaper Sloboda in Tula that their circulation numbers are growing. Sloboda, after receiving a significant investment from the large Germany-based WAZ Media Group, replicated its successful model for creating city newspapers in Ryazan, Yaroslavl and Volgograd this year. So far, the crisis has not hampered Sloboda's development plans because, as the newspaper's general director Vera Kiryunina said, German investors feel that a crisis is the best time for developing new projects. The editor-in-chief of Delovaya Gazeta Yug, in Krasnodar, owned by Sweden-based Bonnier Business Press, also noted that demand is growing for information on business opportunities that have arisen as a result of the crisis. Bonnier, by the way, has also cut back on its staff.

It is difficult to say whether these fears and hopes are justified. In these uncertain times, media outlets behave extremely cautiously. In fact, the National Press Coordinating Council, which is composed of the directors of leading publishers, distributors and printers, has agreed that an industry-wide policy to avoid creating panic about the state of the economy is the No. 1 priority. The Council met to discuss the status of the publishing sector and to adopt anti-crisis measures, including commitments not to abuse monopoly status where it exists and to conduct business in a transparent fashion.

Solidarity and social responsibility are so unusual for the publishing business that it is hard to believe they will become a reality. But the flip side of every crisis is that it offers new opportunities.

Alexei Pankin is the editor of "Strategii i Praktika Izdatelskogo Biznesa," a magazine for publishing business professionals.