A range of new laws are making it increasingly difficult for foreign media companies to operate in Russia.
Strict new rules are prohibiting pay TV platforms from running advertisements; forcing non-Russian media companies to sell assets; and heavily regulating Internet activities. As a result, many businesses are leaving.
President Vladimir Putin recently signed a law that will ban commercial advertising on every foreign-run pay TV channel; the ban only applies to channels that feature less than 75% of Russian content. The new rules were published in the official state journal and have taken effect.
“Russian-made content” must be made by Russian citizens or organizations registered in Russia, or be content commissioned by a Russian media outlet, in the Russian language or the languages of the other ethnic groups of the Russian Federation. Meanwhile, foreign investment in a Russian content project cannot exceed 50% of its total cost.
Yuri Pripachkin, president of the Cable Television Association of Russia (AKTR), said some companies that offer pay TV in the region are bracing themselves for a revenue dip that could amount to as much as 30%.
Among the foreign-run entities that will be affected are Walt Disney Co.’s Russian Disney Channel; Discovery Communications Inc.’s Discovery Channel and Animal Planet networks; as well as the Viasat Sport and TV1000 stations, owned by the Swedish Modern Times Group.
“These popular channels earn a third of their revenues from advertising and around two-thirds from subscriptions,” Pripachkin told SNL Kagan. “With the new legislation, they are losing a major revenue stream.”