The Russia Journal No.20 (163), May 31,2002

Following a successful initial public offering last month, RosBusinessConsulting, or RBC, is planning to expand its media business, launching a cable television channel in 2003.

RBC general director Yury Rovensky said the channel, whose format will be similar to that of U.S.-based Bloomberg News, will be on cable and satellite television in the first half of next year.

"The initial audience of the channel will be about 5 million," Rovensky said.

The channel's target audience will include financiers; managers of investment and insurance companies and stock exchanges; private investors; auditors; consultants; and top managers of publicly traded companies, RBC said. Rovensky noted that the creation of a business TV channel is in line with the development plan of RBC. "While preparing for the initial public offering we singled out three main areas of development, which will be financed from the funds raised by the IPO - the expansion of the media business, which would move towards multi-channel delivery, mergers and acquisitions in the domestic IT market and the geographical expansion of the software business."

But being more successful than expected, the initial public offering enabled RBC to draw up several investment plans for the TV channel, which the company plans to present to its shareholders during a meeting on June 14, RBC's head said.

RBC is not planning to run the channel all by itself and is offering cooperation to interested investors. "For the execution of the TV-channel project we reserve the right to attract outside investors, who could get a share in an RBC subsidiary that will be in charge of the project," Rovensky said, adding that both media holdings and investment banks are being considered. "Currently, we're in the process of negotiations with media groups and investment banks, both Russian and foreign," Rovensky said.

RBC says it expects the channel to break even in the mid-term, but a more specific date will depend upon which of the investment schemes will be chosen for implementation by the shareholders meeting next month. "But, in any case, the channel will operate as a business, not an ideological tool, and none of the projects stipulates a long-term break-even," Rovensky said.

There are plans to include the channel in the satellite packages offered by Russia's two biggest operators in the sector, Kosmos-TV and NTV-Plus, but RBC is also in negotiation with other companies. "Our task is to secure a maximum audience for the channel, both domestically and internationally," Rovensky said.

Satellite operators say the channel could be popular with its core audience if modeled on Bloomberg News.

"Such a channel would be interesting to tens of thousands of our most active subscribers - those who subscribe to the Alpha elite package," said Viktoria Miroshnichenko, a manager at the marketing department of Kosmos-TV.

She added that Bloomberg, which Kosmos-TV broadcasts without Russian translation, is popular among both Russian and expatriate audiences, primarily those in the business community. "But it's too early to speak about the channel's inclusion in one of our packages," she said.

By Vladimir Kozlov