As MIPCOM prepares to shine the spotlight on Russia during this year’s market with its “Focus on Russia” program, Phillip Luff (pictured), who has spent the last year overseeing Discovery Networks International’s Russian businesses, tells realscreen about the challenges and opportunities of working in the region.
Winston Churchill once famously described Russia as “a riddle, wrapped in a mystery, inside an enigma.” And for years in the TV industry, that notion held true for many a Western producer or network trying to gain a foothold behind what was known as the “Iron Curtain.”
Increasingly, however, the territory is becoming more and more accessible, with a rise in the number of Western networks, producers and distributors looking to work with the Eurasian giant. At MIPCOM this year, the focus will turn to the world’s largest country, as delegates from the region arrive in Cannes for networking and deal-making.
One company which has increasingly focused on the region is Discovery Networks International, which over the last year has employed Phillip Luff to oversee its Russian operations.
Luff has spent the last year serving as acting country manager for Northeast Europe and Southeast Europe, and in July this year was promoted to VP and country manager for emerging business, with Vlad Tudosie joining the firm as country manager for South-eastern Europe and Romania.
In addition to his new role, Luff still remains acting country manager for Northeast Europe, and is actively involved in the firm’s Russian affairs.
As an Australian native with experience predominately in Australasia and the UK, Luff says one of the first things to surprise him in the job was the scale of Russia’s TV industry. “The size of the market in terms of population, and the size of the country in terms of geographical expanse, is enormous,” he explains. “With so many operators there, it’s critical to be set up in a way that you can actually manage things and devote the time to your clients properly.
“We’ve got clients across the expanse of Russia, and because there are nine different time zones, that can prove a challenge for us administratively.” Among the platform partners Discovery has in the region are Comstar, which is part of the Mobile TeleSystems group, and NTV Plus, which belongs to the Gazprom-Media group. Discovery first launched on the latter firm’s DTH platform in the late 1990s.
“The challenge is to work your way through the whole industry and develop relationships with everyone to get distribution,” says Luff, “down to the little, local cable company which is operating in a town and servicing the local needs.”
One challenge Luff identifies in the region is the amount of everyday bureaucracy and red-tape that companies face. “The amount of regulation around licensing means our team spends a lot of time just doing the administrative work required to run a business,” he says.
“For example, each channel needs to have its own company and its own license, and each channel license needs to cover each of the regions in which you’re operating. So as we launch with new operators, we have to add those particular regions onto the license. The paperwork is significant.”
Still, there are opportunities for those willing to put in the hours. According to figures supplied by MIPCOM, some RUB128.8 billion (US$4.3 billion) was spent on TV advertising in Russia last year, with cable revenues in excess of €723 million (US$1.01 billion).
“There is so much potential – it is definitely a growth market,” says Luff. “There is definitely a lot of demand for our products, and with the digitization of the cable networks there, the existence of the DTH platforms, and the increasing growth of IPTV and of web TV, there is a huge opportunity for us with our multiple channels.”
In terms of content, Discovery has so far made only tentative footsteps towards local programming, most notably with a Russian version of makeover format Daughters vs. Mothers, which aired on TLC in the region earlier this year.
The majority of programming still comes from Discovery’s Western feeds, although Luff says that the shows chosen tend to have universal appeal. “It’s not just about entertainment; it’s also about learning something, which obviously fits really well with our brand. And as we often say, a shark is a shark, whether it’s in Africa or Russia.”