Head of Russia's Dozhd Vows to Fight On With Internet-Based Advertising Strategy

1:33 PM PST 03/19/2014 by Nick Holdsworth, Vladimir Kozlov

The channel was on the verge of closing after it was dropped by major cable operators.

MOSCOW -- The head of Russia's beleaguered opposition-leaning TV station Dozhd has vowed to keep the channel open, despite it being shut out of major cable networks.

CEO Natalia Sindeeva plans to switch to an Internet- and Smart TV-broadcasting strategy, with advertising, audience subscriptions and crowdfunding to help plug the hole blown in the station's finances when cable operators dropped it in January over a controversial viewer poll that questioned the wisdom of the siege of Leningrad.

The 900-day siege left as many as 1.5 million Russian soldiers and civilians dead. On the 70th anniversary of the lifting of the siege, Dozhd asked whether it was worth the sacrifice, suggesting it might have been better to allow the Nazis to take the city.

In the wake of the poll, top pay TV platforms including NTV Plus and Trikolor dropped Dozhd from their packages. Reeling from the financial blow this represented, the channel said earlier this month that it would be forced to close.

Now Sindeeva has come out fighting.

In an interview with the Sostav.ru website, published just days after several opposition websites were officially blocked by the Kremlin, she said the channel would build on its core daily audience of around 600,000 viewers and develop new revenue streams.

"We do not plan to shut down," she said. "For four years we've fed our audience. TV Dozhd and its website will work."

In order to continue, the channel is revising its business strategy.

Staff salaries and production costs will be reduced and Internet advertising expanded. Sindeeva plans to double overall income from Internet sources from 25 percent to 50 percent of channel revenue.

Other options being considered include setting up Russia's first paid channel on YouTube, expanding the 800,000 subscribers who watch Dozhd on Smart TV and crowdfunding.

"We are also planning fundraising events for broadcasting, borrowing the idea from American public television, which twice a year holds fundraising marathons," Sindeeva said.

Dozhd TV has a total monthly audience of 7 million across all platforms, including services that allow Russian speakers to view it outside of the country.

That, analysts say, gives the station a chance to stay afloat although it won't be easy.

"I expect that the company will completely switch to the online format and monetize their income in several ways," Ksenia Artunyova of Moscow-based investment company Rye, Man and Gor Securities said.

"Revenue from Internet advertising is now developing very dynamically; it would be logical to move to YouTube and charge a subscription fee for their services," she told Moscow's Kommersant FM radio.

Mikhail Gurevich, a co-founder of Moscow Internet venture fund 101 Startup, warned that the channel would need to quickly build its subscripion base if it planned to survive in Russia's crowded Internet marketplace.

"Most of those who can afford and are willing to pay for content have already done so; the next revenue stream from that source is due toward the end of the year. Dozhd TV needs to restore its entire database and maintain it 'til then," Gurevich said. "That is a serious challenge."

The office compound Krasny Oktyabr said it will not extend Dozhd's rental contract on the network's offices, which expires in late June, the network's owner Alexander Vinokurov said on his Twitter account.

“Dozhd received a notice from Krasny Oktyabr that the rental contract won't be extended,” he wrote. “No reasons were provided.”

According to Vinokurov, the network is going to try to negotiate with the landlord.

Incidentally, the notice came less than two weeks after Parliament member Anatoly Vyborny sent a request to the general prosecutor, demanding that a probe into Dozhd's rental contract be launched. Vyborny alleged that the network was charged a lower rate than the building's other tenants.

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