Market Insight

CNN to return to Russia following new licence award

March 25, 2015  | Subscribers Only


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On 23 March Roskomnadzor, Russia’s media watchdog, granted CNN International a ‘universal’ broadcasting licence that will allow Turner Information Programs and Lifestyle, the Russian subsidiary of Turner Broadcasting System Europe, to broadcast its news channel across all platforms on the entire territory of the Russian Federation for the next ten years. In November last year Turner said it would terminate the broadcasts of CNN International on 31 December 2014, without providing an official reason for doing so. Until then the channel was available on pay TV platforms NTV Plus, Akado and Vimpelcom.

When Turner Broadcasting System Europe announced the exit of CNN International from Russia (https://technology.ihs.com/515751/cnn-to-leave-russia-in-december) it did not seem likely that CNN International would be back a few months later. As soon as the announcement was made, the Ministry of Telecom and Mass Communications of the Russian Federation, the government agency responsible for telecommunications, media and the post, released the official publication stating that the legislation allowed foreign channels to broadcast on the Russian territory. In January Roskomnadzor officials held a number of meetings with the CNN International representatives and on 17 February the new channel applied for a universal broadcasting licence.

Our analysis 

The fact that that CNN International has obtained a ten-year licence does not necessarily mean a prosperous future for the channel - assuming it is able to return to Russia at all. Furthermore, CNN will need to be at least 80% Russian owned and it will need to stomach the loss of advertising revenues as a result of the pay TV ban. One of the ways it could have advertising on its news channel is to win a tender for a digital multiplex or satellite TV bandwidth and distribute its content free of charge.

It is important to note that the universal licence will need to be reissued to include the bandwidth details and that gaining a terrestrial TV licence in a locality of the country exempts the channel from a pay TV ban. This is how the pay TV channels owned by VGTRK and Gazprom Media managed to keep advertising on their pay TV channels. Alternatively, Turner could ensure that 75% of its content is 50% funded by Russian investors; it will then comply with the amended pay TV ban (both of the pieces of legislation and their amendments are explained in our recent insight report). For an international news channel, however, this looks like an extremely difficult condition.

Geography
Russia USA
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