Aleksanteri Institute, University of Helsinki, Finland

BASEES Study Group Conference ‘The Mass Media in Post-Soviet Russia’, 6-8 April 2006, University of Surrey

Researcher, M.Soc.Sc.

Katja Koikkalainen

Aleksanteri Institute, University of Helsinki, Finland

Department of Journalism and Mass Communication, University of Tampere, Finland

Internationalization and growthof business journalism in Russia

1. Introduction

The presentation deals with the internationalization and growth of business media market in Russia. The growth of the business media from 1990s onward is closely tied with the changes in society. In overall, the society has become more market orientated and the need for financial and business information has rapidly grown. New technologies and the rise of telecommunications sector have shaped the use of media. In Russia, the business press was ‘re-established’ in the beginning of the 1990s. Since the early 1990s the business journalism has developed rapidly and is in the forefront of globalization in Russian media market. The end of the 20th century and the beginning of the next one have been time for numerous launches in Russia, and the business press is still under re-formation and constant development. The printed press is alive although online services and mobile solutions already are the number one news source for some professionals. Foreign media companies have actively entered Russian market of business press. In Russia, the financial press market is, like the magazines market, one of the media sectors with considerable foreign ownership and investment compared to the situation in the other media market. The challenge is the divided structure when it comes to the development of the information technologies; the needs and production of business information are very different in big cities and in rural areas.

In this presentation, the aim is to find out the trends of internationalization and growth in business press. Issues on ownership, journalistic practices and audiences are discussed. The first part of the presentation gives information on ownership and financing, in the second part the focus is on how the internationalizing of practices is interpreted by business journalists. The journalists’ views are from interviews, made for PhD research. In my dissertation research I am comparing standards and practices between Russian financial press and international financial press and looking at how Russian business journalists see the difference and similarities between the Russian and international ones. This dissertation research aims to find how the printed financial press in Russia has developed and changed and what the role of cultural exchange and international journalism models is in this process.

2. Business information market

Although the newspapers catch nowadays less people than television and the specialised ones are read by a relatively small circle of people, the demand for special area information like business information has moved upward with the rise of economy. Also the advertisers have found their way to financial publications.Besides the printed press – newspapers and journals – there are a number of internet sites and television programs devoted to financial information.

Widely understood there are a lot of economic and financial publications in Russia. The concept ‘economic press’ includes quality newspapers and specialised magazines as well as weekly free advertisements papers (see, for example, Kulev 1996, 13-14 and Mordovskaya 1998, 75-76). The two most important dailies for Russian business community are Kommersant and Vedomosti. Kommersant (Businessman) is today more like a general quality newspaper than just a financial newspaper, but it was the first new kind financially orientated newspaper in the new Russia after the collapse of Soviet Union. Younger Vedomosti (Gazette) is more purely a financial newspaper. Kommersant and Vedomosti are among the best known central daily newspapers.Kommersant was founded in 1989, even before Soviet Union collapsed. In the year 2005 the print run was over 110,000. The paper was independent in the beginning, but since year 1999 until 2006 Publishing House Kommersant was within the circle of influence of the businessman Boris Berezovsky. Berezovsky sold his share to the co-owner of his businesses, Badri Patarkatsishvili in February 2006. Kommersant has got 14 regional editions and a sister publication in Ukraine. As they in the Kommersant say, the financial block, not the whole paper, is competing with Vedomosti. Founded in 1999, Vedomosti is displaying a good level of respect in the financial newspaper market. The average print run was about 65,000 in the year 2005. Vedomosti has got seven regional editions.

The newest project in Moscow business daily markets is Biznes, a daily directed to middle and small entrepreneurs. Publishing house Sekret firmy launched Biznes in autumn 2004. The main product of the publishing house is a weekly magazine Sekret firmy (The secret of the company). Of the three business dailies, Kommersant has got an audience of 302,500 (184,300 in Moscow) for one issue, Vedomosti - 129,000 (119,000 in Moscow), and Biznes - 32,100 (all in Moscow) (TNS Gallup Media: Auditoriya periodicheskoy pressy - 2005/01).

In St. Petersburg,Swedish Bonnier owns the main business daily Delovoy Peterburg. Delovoy Peterburg has been published since 1993, the daily circulation is approximately 23000 copies (Novosti SMI 6/2005, 38). It is a tabloid with very similar outfit with other Bonnier business publications. One experiment with international cooperation in the 1990s was Finansovye Izvestiya, which was founded by Russian Izvestiya and Financial Times (Gourevitch 2001, 45). Nowadays a publication carrying same name, Finansovye Izvestiya, comes out as a supplement of Izvestiya.

Other business publications in Russia in federal level include, for example, weekly newspaper Ekonomika i zhizn, weekly magazines Ekspert (Ekspert-Media), Dengi (Kommersant publishing house) and Sekret firmy (Publishing house Sekret firmy). There is also a wide selection of regional and local publications. In internet, RBK news service is devoted to economic and financial news; the economic TV channel RBK belongs to same company. The shares of RBK are, unlike the other bigger media houses in Russia, listed in the stock exchange RTS. In March 2006, RBK expanded to printed publications when launching a business monthly magazine. According to the general director of the company, Yuri Rovensky, this is only their start in printed press market (Dolgosheeva 2006). In printed media, biggest growth is seen in magazines; the magazines market extends to new brands, themes and audiences. The biggest newspaper readership is measured among popular weekly newspapers; also established specialised publications do get steady readers. (Koikkalainen 2005.) The quick growth in magazines market makes it attractive for the provider of electronic services, too. According to the Russian union of information offices AKAR, advertisement in the printed press accounted last year 1.4 billion dollars, with increase 16 % from the previous year. The increase in magazines was 23 % and total share 580 million dollars. (AKAR 2006).Newest business weekly magazine, SmartMoney, started March this year, by Independent Media. The name comes from the partner publication by Dow Jones in USA, but as the editor of Russian SmartMoney Leonid Bershidsky said in the editorial of the first issue, the concept of the publication is thoroughly thought by Russian team (Bershidsky 2006). So, the SmartMoney has picked some things from the US analogue and developed some their own. Here we come to the question of licensed and other foreign-like or foreign-owned publications.

2.1. International ownership

In business publications, as well as in magazines market, there are more international investments than in other press. This is an important factor behind the internationalising features. For example, the publishing company behind Vedomosti, Independent Media, was originally started by Dutch and sold in January 2005 to Finnish SanomaWSOY for 142 million euros (SanomaWSOY release 19.1.2005). It is the largest magazine publisher in Russiaand publishes, for example, Cosmopolitan and Men’s Health and three newspapers, including Vedomosti (this paper is in cooperation with FT and WSJ). In magazines market, international cooperation blossoms in Russian versions of foreign brand magazines. The main brands are there already: Burda, BusinessWeek, Cosmopolitan, Forbes, Newsweek etc.The western brands effectivelyattract advertisers. Today, licensed magazines are more successful than Russian projects in almost all segments when measured by advertising income. The already known and tested brand makes it easier to convince advertisers about the project’s successfulness; some companies also prefer to advertise in all nationalized publications of one brand. However, in business weeklies the leaders are Russian brands, maybe because of their long presence in the market before the licensed versions of foreign publications. (Alekseenko 2005, 34-36.)

In business daily press, Bonnier Business Press, the publisher of Dagens Industri, has announced about plans to start a daily in Moscow (See Koikkalainen 2005.) The Moscow newspaper, apparently, would be a sister publication to Delovoy Peterburg and other Bonnier business publications around the Baltic Sea. If Dagens Industri goes to Moscow, the market of daily business papers will tighten because there already are three business orientated dailies: a) Vedomosti, published by Independent Media is pure financial newspaper following the model of Financial Times and The Wall Street Journal, b) Kommersant, owned and made by Russians started as business paper but now is a general interest newspaper with a strong business section, c) Biznes, a newcomer from year 2004 and published by Russian-owned publishing house Sekret firmy.

Also other former Soviet Union area, for example, Ukraine, has becomean interesting field for foreign media investors. The unsaturated market gives them possibility to bigger growth than in their home markets. Foreign companies operate mainly in capitol cities or other big cities. (See Koikkalainen 2005.) Foreign companies seem to be especially careful with their projects, they mainly take part in business media or popular media projects with no or very little political risks. In overall, in Russia there still is room for new publications. In Russia, the number of totally new products is high compared to, for example, Nordic countries. There the trend is to develop new thing with old brands - for example, a newspaper begins to provide TV news. In Russia, new projects are launched both inside a media holding and as separate, new products. The newest magazine launches RBK and SmartMoney are projects with which a media holding expands to new - but logical to it- area.

2.2. Audiences

The commercialization and success of business publications can be seen in readership numbers. Circulation of Vedomosti, for example, has increased same time as the total circulation has decreased during last years. In Russia, in the beginning of the 1990s the number of publications and circulation figures increased sharply. During the 1990s the average circulation of national newspapers dropped from 2.58 million to 118,000[1]. Newspapers have from 1990ies and onwards lost their position as news media for TV. The biggest readership is measured in popular weekly newspapers; also established specialised publications do get steady readers. Categorization to all smaller niches is going on. Business media has managed to find a growing demand from audience and to encourage advertisers.

Chart: Vedomosti circulation 1999-2005. Source: Vedomosti

For reaching new audiences, the business publications have expanded their formats and themes within the original brand. By the way, Kommersant started weekly magazine already in the 1990s - and there was a weekly newspaper before the daily was launched 1992. Nowadays both Vedomosti and Kommersant publish a variety of full-color supplements besides the normal black-and-white newspaper. Special themes include mode, tourism, real estates etc - themes that attract advertisement and wide scope of readers. Russian publications have adapted western formats and even use English in titles. In Kommersant, the weekend supplement is called Weekend. The weekend supplement of Vedomosti is called Kak potratit; it is an analogue to How to spend it, published by Financial Times.

Russian business audience is relatively young and well educated. Over quarter of Vedomosti readers are in the age group 25-34, another quarter is in the segment 35-44. Majority of readers are men, and 60 per cent are directors or specialists. 77 per cent of readers work in privately owned enterprises and 58 per cent has income above average, tells the readership survey made by Gallup NRS Survey. (Vedomosti audience profile 2005.) In Kommersant, the statistics is quite similar. Almost 30 per cent of readers of the Kommersant daily and Dengi and Vlast weeklies are in the age group 25-34, and over a quarter in the age group 35-44. 57 per cent of readers are men; over 70 per cent has got a higher education. Over 90 per cent has got average or higher than average income. (Kommersant audience profile 2004.) In internet publications, the audience profile is close to the profile of printed press. The users of RBK internet site are in the big cities, mostly in Moscow, and present men of age group 25-44. Two thirds has got higher education, 40 per cent are managers and 30 per cent specialists. The difference lies in the occupation spheres: a quarter of RBK users are working in telecommunications and IT sector, and 20 per cent in finance, assurance or real estates. (RBK audience profile 2004.)

However, the circulation and readership per population still is low in Russia: Dagens Industri has got almost same circulation as does Kommersant - in Sweden with nine million inhabitants compared to Russia’s 144 million[2]. Possible explanations can be found, for example, in audience profiles. In Russia, the readers of business publications are mainly managers and specialists with higher than average income. In Nordic countries, the audience is more heterogeneous. One big audience group there is the small investors - ‘average’ people with ability and will to enter investment and stock market. Maybe the audience profiles reflect the state of business environment and the wideness of ownership structures? If the shares of Russian companies come more widely as subjects of open trading in stock exchanges, the group of small investors can be a potential new audience group also in Russia.

3. Internationalisation of practices

Internationalization of media business does affect not only ownership but also daily routines and contents. In my dissertation research I am comparing standards and practices between Russian financial press and international financial press and looking at how Russian business journalists see the difference and similarities between the Russian and international ones. (See, for example, Koikkalainen 2004.)

To illustrate the similarities and differences between Russian and international business press, I’ll in this presentation focus on journalistic source practices and attitudes towards fact-based journalism in Kommersant and Vedomosti newspapers. The examples are extracts from research interviews, conducted in 2002-2004, with 16 journalists in these two newspapers; some of them work as editors. The results can not be generalized to all business media in Russia, but it is assumed that the illustrated routines and practices are also somehow familiar in other news offices. In the coding of the extracts, ‘H01’ is the code of the interviewee, ‘40’ is the number of the speech act in the interview. Journalist interviews focus on views on diffusion of journalism models and practices and the role of financial journalism in the media field and in society. The most important foreign role models for the financial daily press in Russia are The Wall Street Journal and the Financial Times - like in many other countries. Some of basic assumptions are that in this field globalisation means adaptation more than invasion, and that it is going on via localisation. Editors and reporters of Kommersant and Vedomosti basically share the view that there are global trends and visions but have several angles to the question what the possible foreign impact is like. Many of them see that although Russian financial journalism has taken its basic model from abroad, it is not a question of copying a model as such, but foreign conventions are mixed with the Russian heritage.It seems that Vedomosti’s working standards are closer to the standards of The Wall Street Journal and the Financial Times; the impact comes mainly from the ownership cooperation with these newspapers.

3.1. Source practices

Journalistic source practices in Russian business newspapers, Kommersant and Vedomosti, seem to have something in common with the western counterparts while some features differ.What are the strongest similarities? The primary sources, the ‘newsmakers’ are of major importance for Russian business journalists. According to the interviewed journalists, a ‘newsmaker’ could be defined as a person (or sometimes an institution) from a company or government who can give first hand information on a news event. The information flow is sometimes both-sided; journalists occasionally share information with their source. Here I find a difference between Russian and western practice: in the west, the position of a journalist and a source is more differed - a journalist hardly has got some new information to tell to a source.Personal sources are as highly ranked as everywhere else while press releases are of minor importance.The journalists do have some kind of a rank order, at least an implicit one, for sources. Some statements are preferable to others. This kind of weight can be reached, for example, with a high position in an organisation. It is understandable that journalists prefer to reach first-hand sources and get comments from the highest level of an organisation.