More Disney for Russians

Walt Disney is buying a 49% stake in Russian free-to-air television channel Seven TV – the biggest ever investment into the country’s media market.

Seven TV will be rebranded as The Disney Channel, perhaps as soon as the end of the year. The new family-oriented channel will reach 75% of Russian viewers – about 40 million households. In the year prior to the move, Disney content in Russia was exclusive to homes with cable TV.

The parties are keeping the cost of the deal under wraps, with the press rumoring it could be up to $300 million. The deal makes Walt Disney the biggest foreign investor into Russia’s media market, with Swiss Modern Time Group currently owning 38.19% in CTC – Media, and Luxemburg RTL Group having 7.5% in the National Media Group.

Disney will provide the investment, while the Russian party – UTH holding, which includes Seven TV and Russian music channel Muz-TV – will share its experience of operating in the Russian market, as well as its network of TV channels.

Robert Iger, executive director at Walt Disney, recalls that the American company first introduced its product to a Soviet audience back in the 1930s. Long after, in 2008, Disney tried to enter Russia’s broadcast market through Media – 1 TV, which manages 30 regional broadcasters. The American company wanted a 49% stake in the Russian company, but the country’s Federal Antimonopoly Service refused, citing problems with the documents provided.

However, it should now be second time lucky, Iger said.

“The step we are going to make now is the start of a brilliant future. We are optimistic about what’s happening in your country,” Iger said.

The American company could pose serious competition to Russia’s CTC TV Channel: “the two will compete directly as family-oriented channels,” warns Anna Lepetukhina, Troika Dialog analyst.

But Vyatcheslav Murugov, CEO at CTC Channel kept cool, however, saying “we deliver family values geared to the Russian mentality, and tough competition is no stranger for us.”

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