The "Golos Rossii" (Voice of Russia) radio station - November 27, 2003

Yenikeyev: Good afternoon! Today on November 27 the 11th professional exhibition "The Press-2004" has opened in Russia. Our radio station, Golos Rossii, which has for the first time become the organizer of the exhibition for Russian Internet resources of the CIS and Baltic countries, is participating in the exhibition, and the RosBusinessConsulting holding company is the general partner of the exhibition. The holding company's General Director Yury Rovensky is participating in our program today. Mr. Rovensky, what do you expect of the exhibition, what interests you in it, as you do business, and, obviously, are orientated to receiving some benefits from you participation in the exhibition?

Rovensky: Yes, we try to build some business models in our work, because we believe that a media resource should be a business and, in fact, is a business. Nevertheless, in this particular case, it is actually a demonstration of what the press has come to during the many years of its development, what heights it has reached, and, finally, what new technologies have emerged. Of course, this is also a show of the present status of the electronic, or, as you have put it, "webbed" media. At the same time its is obviously a possibility to show one's achievements and to see the achievements of others. One can say that RBC has achieved breathtaking growth over the past few years, and of course, this allows us to announce our ambitions to occupy a place on the Russian media market.

Yenikeyev: What will you show at the exhibition?

Rovensky: Our whole media holding company. This presently includes an agency (The Russian Information Agency "RosBusinessConsulting"), electronic media, such as a business and analytical newspaper RBC-daily, the Ytro newspaper, and a new Russian business television channel, which we started this year. RBC has been running an independent TV channel since September 2, and we broadcast programs 24 hours a day.

Yenikeyev: Mr. Rovensky, it was believed earlier that your information agency was a most profitable investment, and it was the most popular of all branches of your holding company. Yet, I have heard you saying in an interview that at present, the biggest emphasis is put on your television channel. Can you comment on this, please.

Rovensky: As you know, the agency, which has been working for 10 years, is, in fact, a beneficial business, and it is a highly profitable business. It is enough to say that we earned over $29m last year. This is an unprecedented figure in the conditions of the Russian media market. Nonetheless, the agency has established itself. The agency does not just have subscribers who pay for the right to receive up-to-date business information, but it also is a very interesting advertising resource. It is not a secret that the rate for advertisements on the RBC resource on the Internet is 10-15 times higher than that of other Russia's sections of the "web."

Yenikeyev: Can I ask you, who are your main consumers?

Rovensky: Consumer of information? Mainly, big corporate clients, of course. Almost every bank with no exception, government organizations, investment funds, consulting companies, and industrial companies. As information that is disseminated is necessary for people who are making decisions, and, as for the functional capacity of RBC, including terminals and online reports of the trade on exchanges, this is actually a business tool for the professional community.

Yenikeyev: My next question deals with the development of your relations with the traditional media, such as newspapers, television, radio, etc.

Rovensky: You know, I am very pleased that since 1995, when RBC appeared on the Internet for the first time, people have already stopped viewing us as untraditional. Now they say that the Internet is an integral part of the media framework. At present, we have friendly partner relations, we are, as it were, colleagues in this industry, and of course, there are different aspects here. We are suppliers of information. Generally speaking, the agency has always been a wholesaler on the information market. We collect information not only in Moscow but also in other regions, we have a huge network of correspondents, we put information on a news line and allow the media to use this information, and at the same time we consume their information, of course.

Yenikeyev: We have a lot of questions for you, coming from Russia and other countries. Let's hear the first question:

"Hello. I am from Great Britain. I have a question for Mr. Rovensky. What is the position of RosBusinessConsulting among other similar companies on the Russian Internet? Is competition high in your media environment? Thank you for your answer."

Rovensky: Thank you. It is always pleasant to answer a question that allows you to boast about something. This is a question of this kind, as it should be acknowledged, and this possibly supports the old known fact, that it is more difficult to be the first, but the glory is greater too.

Yenikeyev: But it is also easier in some way, isn't it?

Rovensky: One cannot say it is easier, as I have never heard that the task is simpler for pioneers. So, this is the most popular resource in Russia now. It is enough to mention that RBC's monthly audience exceeds three million people now.

Yenikeyev: By the way, how can you explain this phenomenon?

Rovensky: There are several explanations. Of course, it is a matter of habit and a matter of brand, and, obviously, of what has formed all these components: promptness, professionalism, quality of information and the format that it is provided in.

Yenikeyev: I think, it is also quite important that in any event, the Russian economy has been developing rapidly over the past few years, and the entrepreneurial class has been growing, people need new information, and you provide it.

Rovensky: Yes and no. Of course, the market is growing, and people's interest in business and economic issues is increasing. A couple of years ago one could hardly imagine old ladies, pensioners, sitting on a bench in front of their apartment house, saying something like: "Have you heard what the oil price is now?" It is a fantastic question, and as providers of information, we are pleased to hear it, and it means that obviously, society has changed in general. However, coming back to the question of RBC's role, or share, there are millions of people, as I mentioned earlier, and this is rather remarkable. Moreover, of course, people go to RBC, because this is an independent source of information. We have no strategic investors, we are not a member of any industrial and financial group, and, obviously, consumers of our information highly appreciate that. For example, I remember the tragic events in New York on September 11. Eight million people looked for information on RBC on that day, and this is a figure that has not been achieved by anyone else so far.

Yenikeyev: Mr. Rovensky, I think it should be noted that there was high demand for information from the United States on that day in general.

Rovensky: Of course, but this was a peak in demand, and this also shows our technical capacity, which can cope with such spikes, demonstrating that RBC is the absolute leader on the Russian Internet, and this is an obvious fact.

Yenikeyev: Isn't it boring for you to be such a lonely leader?

Rovensky: Well, we are leaders, but we are not lonely, and this is very good, as at any rate, if we were alone, there would be no industry.

Yenikeyev: However, there is competition everywhere, and, obviously, it makes one develop, doesn't it?

Rovensky: At present, competition is definitely a very strong factor. Although, I would rather speak about such a boosting factor not with regard to Internet companies, because, as I constantly reiterate, the Internet is just transport for RBC, an instrument for delivering information. Our product is not the Internet. We are not providers, we are producers, collectors and distributors of information.

Yenikeyev: Thank you for your answer to our listener's question, and let's hear a new question:

"Good afternoon. Mr. Rovensky, my name is Dmitry, I am from Moscow. I am an entrepreneur, and therefore, I am interested in what your holding company's success is actually due to?"

Rovensky: Well, possibly, many components should be mentioned. First, a timely opening at the beginning of an economic boom in Russia, it was in 1993, this was natural growth along with the market, and it is always easier and less costly than entering a structured market, and also professionalism and, possibly, some luck too. All these factors were obviously components of the current success. Although, if a kind of a recipe is needed, its idea is probably that we have always tried to go a step ahead of events. And, by the way, the slogan "being ahead of events" is a motto of RBC.

Yenikeyev: Have you invented this slogan or have you borrowed it from somebody else?

Rovensky: This is our slogan, and moreover, it is enough to say that RBC was the first on the Internet, RBC was the first to enter stock exchanges, we have become an open public company and conducted the first successful IPO in Russia last year. We were the first to found a business television channel, which is a new channel for disseminating information, we were the first to report the course of trade on the Internet in real time, we have always tried to form the demand on the market instead of just following it. I think the dynamism and the success that the company is showing are largely due to this.

Yenikeyev: Thank you. Additionally, a lot of questions have come via the Internet too. The first of them is from France. The question is as follows: "I hear that a number of countries, including Russia and China, have suggested that the UN should be authorized to manage the Internet, so as to more successfully fight hi-tech crimes and copyright violations." What is your attitude to it?

Rovensky: I believe this is just an informational pretext, which has given rise to some discussions. I have said in an interview with the "Vedomosti" newspaper recently that I am very skeptical about it. I think that national administrators of the Internet have not achieved any material results, and any attempts to tighten the rules through an international organization look too ambitious, at the very least. On the other hand there is a copyright problem and extremism, which was mentioned in this question, but this is not a solution. Let's review the experience of North Korea. The Internet is banned there, but this does not prevent crimes. Therefore, some public understanding of the resources and possibilities is needed here, and it is impossible to stop progress. Of course, the Internet will develop, and declarations that the Internet is a disaster for civilization, well, all this is arguable. Anyway, coming back to the question, I think this idea of forming such a committee of the United Nations is far-fetched. However, in my view, some obviously want to make another cart to be put before the horse.

Yenikeyev. I think, we will come back to this question later, and now let's look at a question from the United States. The question is the following: "It is clear that the level of Internet penetration in big cities is far higher than that in small towns. Can you tell us please, what is being done to provide Internet access to residents of rural areas and remote areas of Russia." In fact, it is an important question.

Rovensky: Yes, of course, it is important. It should be acknowledged that we have not yet overcome one of the contradictions of socialism, which is, as you remember, a conflict between urban and rural areas. Although, what has been done recently is partly due to high technologies as they are (as they have become more accessible and more motivating), because earlier a computer would appear just for printing documents. They were like modern typewriters. Yet, now the functional features, the educational opportunities, and, in the end, a business framework that is increasingly represented by the Internet, give an incentive for bolstering this process. At the same time a lot is being done at the government level too. It is enough to mention that a special federal program, called "Electronic Russia," was adopted in Russia in 2002, and this is a very encouraging program. One of the aims of this program is to cover the digital gap between different regions of the country, as well as the gap between Russia and the international community in general. This is serious money, although it is not always spent rationally. I think we should not criticize the methods of the implementation now, but nonetheless, the federal program provides over two billion dollars in investments in the development of the infrastructure over seven or eight years from 2002 until 2010.

Yenikeyev: Some figures and a government program have been mentioned in your answer to this question. I think it would be interesting to make a comparison. It is clear that we are behind, for example, the United States, Great Britain, France, Japan and some other countries in this sector, but what is our position with regard to this question, as compared to, for example, India, South Korea, and, possibly, our former partners in the Warsaw Pact?

Rovensky: It is difficult to say, because I have not studied this question. We are trying to develop this within the limits of our abilities. As for comparisons, speaking about India, the level, some indicator of Internet use is definitely far higher in absolute figures. In per capita terms, we definitely surpass the level of India, and we surpass even South Korea. Obviously, we are behind Western Europe so far, and we are far behind the United States. It is enough to say that out of 150m people, about 11m-12m are active users of the Internet now. Roughly, this is below 10 percent. There are reasons to say that we will reach about 30 percent within the next two years, which will obviously be a serious factor. As for the United States, this proportion exceeds 70 percent there, and therefore, we have big prospects for growth.

Yenikeyev: Excellent. Mr. Rovensky, the next question is from Germany. It is as follows: "People read less and less here but mostly watch TV and work with a computer. Psychologists and doctors are anxious, and they declare that this is causing big damage to human health and mentality. In your opinion, is it possible that electronic media will completely replace printed editions in the near future?"

Rovensky: There is such a trend, clearly, and as any competition, this is a competition for consumers. Here everything will depend on the ability of printed media to defend their positions. I believe that the market should be the regulator in this situation. It is obvious. Of course, it is regretful that the younger generation reads so little. For example, you mentioned the Internet. I can give you a different example. Different records are offered today on cassettes and on MP-3 players, which cover all Russian classics. You don't have to read, you can just listen to all them in your car or in the Metro.

Yenikeyev: This is a new view.

Rovensky: It is a new view. Of course it is, actually, a question of the family, a question of upbringing again. If such values as literature, arts are adopted in childhood, the Internet will be just an intermediary, leading to global achievements of civilization, but definitely not a substitute for this. Therefore, I would prefer to speak about the role of family in raising children rather than the regulatory role of the state, so that not just computer games would dominate their time and their interests.

Yenikeyev: Thank you. Mr. Rovensky, we have already spoken about attempts to regulate the Internet or the necessity of doing so. At the same time you would agree, of course, that the Internet is full of pornography, and a lot of different hooligans are using it to their advantage, and such talented guys as hackers are, possibly, unnecessary to mention.

Rovensky: There are different kinds of hackers too.

Yenikeyev: Generally, some regulation of this medium is needed, I think. What is your idea at the national or, possibly, international level?

Rovensky: I am still convinced that such matters should be regulated at the national level. Of course, there must be coordination between different countries, as the Internet is boundless. There may be a server in some country, and the distance between you and this server can be hundreds or thousands of kilometers. This has no effect on accessibility whatsoever. It is enough to say that Russia has made serious successes in this, as it has entered the Internet environment somewhat later and has studied the experience gained by other countries. For example, there is a special R Department of the Interior Ministry to fight hi-tech crimes. They do a rather good job, which envisages the elimination and closing of extremist, anti-constitutional and terrorist sites. Obviously, we cooperate in such matters too. If we want to protect ourselves, to protect our state, our society, such cooperation is necessary.

Yenikeyev: Excellent. Let's now discuss another question from one of our listeners:

"Hello. I am from France. I have a question for Mr. Rovensky. Can you answer please, whether your holding company developed in an original way, or you followed the experience accumulated in the West? As, in my view, Russia is seriously behind the USA and European countries in this sector. Thank you for your answer, Mr. Rovensky."

Yenikeyev: Well, Mr. Rovensky, we have already discussed this, but, possibly, we can look at this from a different perspective?

Rovensky: In fact, we followed our own way, although we tried to avoid "inventing the wheel." The Russian Information Agency RBC, orientated mainly to financial and business information, appeared in Russia in 1993. Of course, we were largely copying the experience of Reuters, and it is not by chance that we are still called "Russian Bloomberg." We are pleased to hear some comparisons like that, but definitely there was a clear understanding of the fact that as Russia had chosen the path of market development, the ruble had become conditionally convertible, securities had emerged, obviously, the demand for information about them would be growing. Therefore, yes, we were following our own way, taking into account specific national requirements. Moreover, I can give you the following example: when the default occurred in 1998, and our audience suffered from this default, as it included people who managed money, who invested money, who owned businesses and were entrepreneurs, so, contrary to any canons, when, theoretically, information should be sold at the highest possible price, RBC opened its information resources and allowed the use of them free of charge. This was necessary, and I should say it was highly appreciated on the market.

Yenikeyev: Thank you. Let's answer another question from a listener: "Hello, Mr. Rovensky. I am from Moscow. In your opinion, what are the specific features of Internet business, as compared to other kinds? Thank you."

Rovensky: The difference between Internet business and any other business, so far as I understand? Well, there is no difference, actually. There is the same goal of making profit, there are the same methods that allow for investing money to derive more money. Therefore, there are no principal differences. I would like to underline that the Internet as it is cannot be a business. And don't trust anybody to avoid repetition of dot.com crashes like those of the year 2000.

Yenikeyev: Excellent. There is another question: " Hello. I have a question to Mr. Rovensky. In your opinion, are investments in modern Internet technologies promising and safe? Thank you for your answer."

Rovensky: Well, I believe they are as safe and as efficient as investments in any other instruments. In any event, the most important aspect is whether you have a possibility of analysis, whether you conduct this analysis correctly, and whether business you invest money in is transparent. If these conditions are met, and you see that as a shareholder you have protection in this business, of course, you should invest, if the conditions satisfy you.

Yenikeyev: There is another question. Golos Rossii is an influential player in the international arena, and our site on the Internet is popular too. We have a big network of correspondents in Russia and a big audience abroad. Do you see any opportunities for developing efficient future cooperation with Golos Rossii, which would be beneficial to you too?

Rovensky: Certainly. In fact, there is such cooperation. This is not a new experience for us. As for things that would interest us, there is definitely the possibility of joining efforts with regard to offices that Golos Rossii has in different cities and different countries, as RBC physically cannot afford to maintain a staff of TV cameramen or reporters, first of all, in foreign countries. However, events occur, and there is such exchange with the Novosti agency and with ITAR-TASS. We have signed an agreement on partnership in the implementation of our television project with both CNN and NBC. And this obviously gives us a colossal opportunity to get access to a huge network of CNN correspondents worldwide. In think, there is still a specific aspect, an independent view, and Golos Rossii yields very good opportunities.

Yenikeyev: I read in some interview of yours that at present, you have just two offices for correspondents in the United States and in the Netherlands. Isn't it necessary to broaden this network? I think, Golos Rossii would be very pleased to provide any assistance to you here, given its experience.

Rovensky: We are certainly in favor of this.

Yenikeyev: Well, the last question, possibly, as the time of our program is ending. You have made a brilliant career, beginning from Armavir, where you finished a technical school, to the Plekhanov University, and now Harvard University, you received additional professional training in Japan, in South Korea. Can you tell us please, how you managed to do all this, and how did you at your rather young age make such a marvelous career, which many dream about?

Rovensky: Well, the answer is quite simple again. One should not dream, one should work, and everything is achievable. In order to achieve something, it was necessary to make efforts, it was necessary to have a goal, and to be able to sacrifice something for the sake of your goals.

Yenikeyev: Thank you for these words. This is the end of our program. I would like to remind our viewers and listeners that today we talked with Yury Rovensky, who is the general director of the RosBusinessConsulting holding company.

This program was anchored by Viktor Yenikeyev.