Market Insight

Raduga TV to close down

December 03, 2014  | Subscribers Only

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The Russian satellite TV operator Raduga TV will stop providing its services on 5 December, having failed to obtain the required satellite TV broadcasting licence from Roskomnadzor, the local regulator for supervision of communications, information technology and mass media. This was a joint decision by the Modern Times Group and Russian company Continental Media, which have equal shares in Raduga Holdings Inc.

In February 2009, Raduga TV's parent company LLC DalGeoCom obtained a TV broadcasting licence from the regulator. In November 2011, the law was amended, making it essential for the operator to obtain a different licence, one which specifically allowed it to provide satellite TV services. Since then, Raduga TV has tried to obtain the licence through thte courts but it has not been able to do so. At the end of the third quarter of 2014, Raduga TV was the fourth largest DTH operator with around 175,000 paying subscribers at the end of Q3. There are three, much bigger, operators: Tricolor, with 10.6 million subscribers, Orion Express (2.4 million) and NTV Plus (800,000).

The Modern Times Group promised that all of Raduga TV subscribers will be transferred to another operator and is expected to give more details at the end of the week.

Our analysis 

The fall of Raduga TV will not shake up the Russian pay TV market too much given the operator's relatively small size. The reasons for its failure secure a licence are difficult to ascertain, but Raduga TV is the only operator which is partly owned by a non-Russian company, Modern Times Group.

On 15 October, President Putin passed an amendment to the media law, which was passed by the parliament on 26 September, preventing non-Russian companies from owning more than 20% of a broadcasting company. As a result of the amendment of this law Turner International, a subsidiary of Time Warner, decided to stop the distribution of CNN International in Russia

Geography
Russia
Organization
Modern Times Group
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