MTG’s Raduga closes in Russia

Russian DTH service Raduga TV, part-owned by European broadcast giant Modern Times Group (MTG), is set to close this month after failing to be granted the required licences by regulators.

The platform, launched in February 2009, offers Russian channels and localised versions of international networks such as Discovery Channel and National Geographic, as well as Viasat History and TV1000 Russian Kino, according to MTG’s website.

MTG took a 50% stake in Raduga Holdings, which in turn owns Raduga TV operator DalGeoCom, in February 2010 from Russia’s Continental Media. It still holds the remaining 50% of the firm.

Irina Gofman, MTG’s exec VP and CEO for Russia, CIS and pay TV emerging markets, said: “Over the past year Raduga has worked very hard exploring all options for obtaining the right licence, which, despite its efforts, has not been granted. We therefore have no choice but to close down the operations.”

The service will end on December 5 and MTG says it is in the process of moving subscribers to another satellite operator. MTG also revealed it is planning to launch five new HD channels in Russia through its Viasat division in 2015, with details to follow.

Raduga’s imminent exit from the Russian TV market follows a series of regulatory changes to the country’s media laws.

Turner Broadcasting-owned US news channel CNN recently revealed it will cease broadcasting in the country at the end of this year after Russia introduced a bill in July to ban advertising on pay TV channels.

Many foreign broadcasters are facing the prospect of having to drastically overhaul their business models following the changes, which will effectively see all advertising on pay TV and cable channels banned from 2015.

The changes are intended to help Russian free-to-air channels compete with pay networks, which have dual revenues streams – advertising and subscriber fees – while FTA networks rely on advertising.

The Russian government has also introduced plans to extend a law restricting foreign ownership of channels, posing a threat to ventures from global players such as MTG and Viacom.

Those changes will stop international companies holding more than a 20% stake in Russian mass media businesses, and will apply to all existing and future operations. The current law limits foreign ownership at 50% for channels that broadcast to at least half of Russia’s population.

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