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MTG rocked by Russian regulations

European broadcast giant Modern Times Group (MTG) is already feeling the effects of the changing media landscape in Russia but says it is exploring ways to work within new regulations.

Russia’s president Vladimir Putin signed off a bill earlier this month restricting foreign investment in the country’s TV channels and in July a bill was introduced to ban advertising on pay TV networks.

The Scandinavian operator is likely to be one of the broadcasters most affected because of its 38% stake in Russian channel operator CTC Media, and its interests in cable and satellite entertainment channels and a shareholding in the Raduga TV satellite platform.

In its third quarter results yesterday, MTG said it was “already feeling the effects of the soon-to-be-introduced Russian pay-TV channel advertising ban” and added that it was seeking to comply with the new-look legal framework.

Jørgen Madsen Lindemann, MTG president and CEO, said the firm was “confronting challenges in Russia and working to find solutions.”

MTG reported net sales were up by 12% in the third quarter on the same period last year, while operating income rose by 32% to SEK 215m (US$29.6m) and net income was up 20% to SEK 236m.

It seems 2015 could be a turbulent year for foreign broadcasters in Russia as they rejig their operations following the double-whammy of measures being introduced.

Numerous international broadcasters operate in the country, including Viacom, NBCUniversal, Disney, Fox International Channels, Turner Broadcasting, Sony Pictures Television, A+E Networks and Discovery Networks International.

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