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The Russian media industry: digitalization as a driver

The Russian media industry today is the result of the multi-layered and controversial post-Soviet processes of deregulation, privatization and shift to a market economy (Vartanova, 2015). However, its present state is much more complex compared to earlier transformational stages. The transition of the Russian media to new economic, organizational and technological systems was an integral part of the large-scale social transformations that started in the 1990s and continued with the digitalization of media production and consumption in the 2000s. This has resulted in a permanent restructuring of the Russian media industry in many different dimensions. While in the 1990s it moved from the rigid state-controlled planned economy to private ownership and market-driven commercial business models, with almost no anti-trust and foreign ownership regulation, in the 2000s the Russian media industry expanded due to the growth of the advertising market stimulated by domestic economic growth, paralleled by an increased audience demand for news and entertainment, as well as a rapid audience shift to online media (Ivanitsky, 2010; Makeenko and Vyrkovsky, 2013;Vartanova, 2015).

The number of media companies registered by Roscomnadzor (the Federal Service for Supervision of Communications, Information Technology and Mass Media, RKN), the national media regulator, has grown substantially. However, the most visible growth is seen in digital media, with increasing penetration all over Russia. As a result of digitalization since the 1990s, by 2019 the Internet and social media were accessible through broadband and mobile networks to more than 75

TABLE 5.1 Changes in the Russian media industry, 2000—2019




Population (in million)



Federal TV channels penetration



(as per cent of the population)

FM and AM radio stations penetration



(as per cent of the population)

Internet users (in million)



Personal computers per 1000 households



Mobile phones per 1000 people



.ru domains



.рф domains (since 2010)



Advertising market (in billion $)



Internet advertising (in billion $)



Average number of terrestrial TV channels



per household

Average number of radio channels per




Time of average daily media consumption

4 hours 29 minutes

9 hours 40 minutes

Sources: Vartanova, 2019; Rosstat, 2020; Mediascope, 2020a; AKAR, 2020; Deloitte, 2019.

per cent of Russian households, providing them with Russian-language content in the .ru domain. In the 2010s, Russia became one of the most advanced countries in terms of Internet use for information and recreation and the digital media became one of the crucial parts of the Russian media system. In qualitative terms the Russian media industry is quite large though uneven (see Table 5.1).

However, the different levels of the Russian media industry - national, regional and local - remain rather unequal in terms of the distribution of economic resources. While the bulk of advertising revenues are concentrated on the national media based in Moscow, local media businesses continue to find it difficult to attract local advertising. As a result, the poor financial state of media companies in small cities and their uneasy relations with local governments, which often formally or informally finance local newspapers, are among the worst factors affecting the Russian media industry (Shchepilova and Burianova, 2014).

In the 2010s, the Russian media industry was challenged by media digitalization and new patterns of media consumption, especially among young urban digital Russians representing ‘Generation Z’ (Dunas and Vartanov, 2020; Vyugina, 2017). Also, there has been a clear shift in media policy from deregulation to reregulation by the government to restrict foreign ownership in the media industry and tighten state control over the digital infrastructure (Galkina and Lehtisaari, 2016; Vartanova, 2019).

At present the Russian media industry with its uneasy combination of the old and the new, the analogue and the digital, might be described by several important characteristics. First, in the last three decades national terrestrial television has become and still remains the core of the industry, accumulating a comparatively large share of financial and audience resources. According to the Communication Agencies Association of Russia, the total advertising revenues of terrestrial TV channels in the mid-2010s were about 1.5 times higher than the revenues of their closest competitors, the online media. The majority of Russians get their news from national free-to-air channels and, according to many surveys, television remains the main source of daily news for 57 per cent of Russians (Makeenko and Vyrkovsky, 2013).

The dominance of national television has even strengthened in the Russian digital switch-over, i.e. the national implementation of the federal programme for the ‘Development ofTelevision and Radio Broadcasting in the Russian Federation in 2009-2015’. As a result of this digital switch over, 20 television channels became free and universally available for the national audience via the first digital multiplex. About 99 per cent of Russians have access to these channels broadcast in digital format - a huge change from having on average only four free channels previously. For the majority viewers this has also resulted in an improved quality of broadcasting signal and, while regional broadcasting markets have shrunk and their news content reduced, the supply of news and entertainment from national broadcasters has substantially increased.

Second, the advertising-based business model is the most prevalent in all segments of the Russian media industry, regardless of ownership structure. Whether private, state-owned or hybrid in terms of ownership, all media companies struggle for advertising revenues, which is reflected in the unequal national distribution of economic resources in the industry. Though less widespread, but promising, is the audience-based model, still strong in the market for glossy magazines and in the subscription-based model for cable and satellite channels. However, the audiencebased model is mostly present in large urban centres with higher living standards than in other regions (Vartanova et al., 2017: 40).

Third, there is a high level of concentration in leading segments of the media industry, along with an enhanced state media ownership. During the 2000s, there was a decrease in private investment in the media business, paralleled by a growth in state and hybrid (state and private, non-media) media ownership. At the same time, the number of small and medium size media companies has decreased. The largest media companies are currently owned either by state-controlled organizations (VGTRK, Gazprom-Media) or by private conglomerates with their main interests outside the media sector, including banking or heavy industry (National Media Group) (Smirnov, 2014; 2016).

Fourth, given that most financial and labour resources are centralized in Moscow, almost all major Russian media outlets are also based in the Russian capital and they continue to dominate advertising, audience share and news agendas. Regional media holdings are much smaller in terms of revenues and audiences and cannot compete in national or even regional markets (Ershov, 2012; Makeenko and Vyrkovsky, 2013; Smirnov, 2016).

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