In addition to covering trends in marketing, programming, and business that impact the broadcasting industry, we occasionally like to highlight a market that may not be especially familiar to the majority of our readers. In this instance, we are taking a closer look at the radio industry in Russia where Moscow is the primary market.
Helping us with this process is Alexey Glazatov who is the Head of Network Programming for The European Media Group, EMG, in The Russian Federation. Alexey has worked in the Moscow market for over 20 years and oversees network programming for EMG and its portfolio of stations: Europa Plus, Retro FM, Dorozhnoe Radio, Radio 7, and Sport FM. We are grateful to Alexey for his help and hope that you find this interview to be as interesting and insightful as we do.
GM: Can you tell us a little about the radio industry in Russia? How big is the market in terms of population and revenue and who are the major players? Is most of the emphasis on Moscow? Do secondary markets usually have their own locally-focused stations, or do they simulcast big networks like Europa Plus (or government stations) from Moscow?
AG: Commercial radio only started in Russia in 1990 so we hardly can describe its condition as being very mature. The development is still very active from both a state regulatory process and from an M&A perspective. Audience data is collected and presented by TNS (Kantar Group Company), which is approved by the industry. We have roughly 40 million daily and 56 million weekly listeners to radio across 164 cities with populations of over 100,000 people (that’s about 43% of the overall population of Russia). The methodology for ratings is day-after-recall by telephone/CATI method.
In 2015, radio brought in total revenue of about 14 billion rubles (roughly equivalent to 225 million USD/a little over 200 million €), which is 16% less than in the previous year. The Russian economy is not healthy here nowadays so we are not expecting to see much growth in 2016.
The market is quite divided and very consolidated between major media groups. In fact, the nine biggest radio groups in Russia generate more than 77% of radio listening here. And, of course, these groups dominate in sales figures as well.
Only a handful of markets have successful locally-programmed stations; the majority of programming is simulcasts with some spots for local programming. The strongest in terms of audience national networks are Europa Plus (http://www.europaplus.ru/), Autoradio (www.avtoradio.ru/), Dorozhnoe Radio (https://dorognoe.ru/), Russkoe Radio (http://rusradio.ru/), and Retro FM (http://retrofm.ru/).
GM: How fragmented is the Moscow market in terms of formats? Which formats are the most popular ones in terms of quantity of listeners? From a revenue standpoint, are these more popular formats also the ones that tend to attract the most money?
AG: Moscow has 54 FM licensed frequencies. We have a fair amount of variety of formats here, some of them unique, some are traditional. We have got plenty of news-talk, a dozen of Russian-only music stations, and even one station which is 100% in English. However, the leaders in listening figures are consistently well-known stations with heritage and strong brands: Europa Plus (http://www.europaplus.ru/), the first commercial radio in Russia; Autoradio (www.avtoradio.ru/), the leading station in Moscow for many years; Russkoe radio (http://rusradio.ru/); Radio Shanson (http://radioshanson.fm/); Retro FM (http://retrofm.ru/); and Echo of Moskva (http://echo.msk.ru/) have been around for decades and are still doing very well in the Moscow market.
GM: Which genres of locally-produced music have traditionally been the most popular on the radio in Russia? Are stations subject to any government regulations about the percentage of music they broadcast that must be Russian?
AG: Russian music is a very important part of the Russian radio market, and we have got some variety here. We have stations that play 100% Russian CHR (Russkoe radio and Novoe radio), Russian AC (Radio Dacha and Dorozhnoe radio), Russian Rock (Nashe Radio), and Russian Chanson (Radio Shanson) as well as some other format variations of all-Russian music. Keep in mind that there are many formats in Russia that don’t play any music in Russian.
We haven’t got any regulations about the overall percentage of Russian music; however, the idea of creating some regulations on Russian music is starting to gain support in some political circles.
GM: On the flip side, what types of international music have made the most inroads in Russia? Are international superstars like Justin Bieber, Beyoncé, and Calvin Harris a large part of the pop culture and radio landscape? How have increased globalization and the rise of the internet affected the ratio of international-to-local music that gets played on the radio (if at all)?
AG: Here in Russia it has always been a different music experience for us as a result of our relationship with the western world. Consequently, we have built our own Russian music culture that includes only a limited amount of western music. This philosophy still dictates the music tastes of most adults here. Of course, for younger people, everything is open now and we pretty much follow worldwide trends. CHR-stations like Europa Plus and NRJ reach massive audiences by mostly playing international music. Like everywhere else in the world, people are relying less and less on radio when they search for new music so CHR stations in Russia have to play more international hits.
GM: You’ve been exposed to many other markets outside of Russia. What do you think makes the Russian market unique compared to others with which you have had experience?
AG: I think that the geographic position of Russia defines our uniqueness in the radio market. Russia has always been very dependent on Moscow in every aspect of life: financial, cultural, and even mental. Local is not as important in Russia as it is perhaps in The US or Germany. That’s why here in Russia we don’t have an independent public radio culture. We have very few local stations that offer true local services to their respective communities. This may offer an explanation as to why radio here in Russia earns only about 5% of the total advertising revenue, which is not enough for attracting big talent or ideas to radio both nationally and locally.
GM: Regardless of the target, format or type of license, are stations required to showcase any kind of government programming?
AG: We do not have many requirements on content in Russia. Each license dictates the percentage of music or other type of programming you have to provide. No government programming is mandatory. Every editor-in-chief is responsible for deciding which topics will be covered, and even more important, which topics will NOT be covered at all. In this respect, there exists a sort of self-censorship for each station.
GM: In many parts of the world, news/talk is a very viable radio format. Are there private, commercial news/talk stations in your market and, if so, how much latitude does a news/talk format have, given the political climate within Russia? What kinds of constraints exist for these types of stations?
AG: In terms of news/talk programming, we have some national and local services in Russia. All of them are produced in Moscow. That kind of programming is very expensive to do, that’s why all the production is Moscow-based. Among these stations, some variety exists in the type of content they provide: Echo of Moscow (http://echo.msk.ru/) is very on-the-edge politically, opposed to state-owned stations like Vesti (http://www.vesti.ru/). Business FM (https://www.bfm.ru/) and Kommersant FM (http://www.kommersant.ru/fm/) are targeting an active male audience, while Sport FM (http://sportfm.ru/) is targeting a more conservative segment of this population. The political climate here in Russia does not provide a lot of room for true variety of opinions and positions.
GM: In terms of non-music content, who are some of the more successful on-air personalities in Russian radio, and what in particular makes these personalities stand out?
AG: We have had to move from personality-driven radio here in favor of specializing in format and technology. This is because the income of our radio industry is not enough to attract big personalities. As a result, we mostly have well-formatted hosts who can be replaced fairly easily if the need arises. When asked about on-air personalities, our market research has confirmed that listeners are not able to recall any specific DJs’ names. Of course, some big morning shows that have history and heritage are exclusions. We are starting to see some big personalities emerge now for news/talk stations.
GM: How important are external promotions and contests to the success of radio stations in your market? Have your stations and/or any of your competitors done a promotion or contest recently that was particularly memorable and resulted in a significant boost in top-of-mind awareness?
AG: Europa Plus and Autoradio are very well-known for their promotions. These events fuel their success, and these stations use a lot of contests with different kinds of prizes to increase their audience shares. We have seen some great promo ideas coming from regions where the markets are really local, and stations are using local events and contests as a means of staying in closer personal touch with the listeners. For instance, Europa Plus has been doing a free annual summer open-air concert, “Europa Plus Live,” with more than 20 artists. Every year, attendance keeps going up, and our online and TV audience for the concert is massive.
GM: Russia is one place where Facebook is not the leader in terms of social media. Instead, Vkontakte is number one. Are the EMG stations placing all of their emphasis on Vkontakte or do you still find it important to have some presence on other social media platforms like Facebook? How different is EMG’s approach to social media compared to what you have seen in other countries?
AG: Vkontakte is the most popular web-site in Russia, even more popular than our search giant Yandex. In March 2016 more than 80% of all internet users between the ages of 12 to 64 used Vkontakte. We have to focus on our efforts on where our audience is spending time. As a results, Vkontakte is therefore the primary place where we concentrate. Europa Plus has an account there with more than 3 million subscribers. The next big social network here in Russia is Odoklassniki and then comes Facebook. Some stations focus their efforts on Facebook, but frankly the primary focus for everyone is Vkontakte.
GM: Are traditional radio stations in Russia facing the same kinds of new competitors (Spotify, Pandora, satellite, internet radio, etc.) as their international counterparts? If so, which of these are seen as the most imminent threats in Russia, and what are some steps stations are taking to remain relevant to their audiences?
AG: We see the changes in music consumption, and our industry understands the long-term impact of this change in consumption on traditional radio. We don't have Pandora and Spotify in Russia. These services did research our market, but they don’t see a business opportunity in Russia. However, we have a lot of other streaming services in Russia: Yandex Music, Deezer, Apple Music, etc. Of course, radio is no longer the only expert in how to expose new music and to share this exposure among friends. The job has gone to online companies and it will never go back. Radio understands this and now the goal is to produce and distribute content online that is unique and hard to copy or duplicate. The content has to connect on an interpersonal and human level – one that evokes emotion and passion. The best radio brands understand this, and, by focusing on delivering this type of content, they will stay strong online.
GM: Going forward, what are some of the challenges that the radio industry is facing in Russia? Do you think that these challenges are unique to Russia or ones that affect the industry worldwide? How is the industry, and your group in particular, choosing to address these obstacles?
AG: The radio industry is now facing an enormous challenge which is how to survive the consequences of the economic crisis here in Russia. Revenue for the industry has dropped dramatically in the past two years, and we are only seeing very small signs of a weak recovery. This means that budgets are being slashed, giving us very few resources to grow and develop our business. Radio in Russia has never had a strong share of the advertising market so we’ve never been sloppy with our spending. However, the current economic situation means that our budgets have to stay flat or be reduced, which is very stressful. The radio groups have already made a lot of cuts in their marketing and development programs, but nonetheless it may still not be enough, which makes all of us feel quite nervous about the future.
