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8 February, 2013

The Voice of Moscow

The sale of Inter, one of Ukraine's top TV channels by coverage, raises a number of questions. The one concerning its official slogan "The country's main channel" requires an explanation as to which country's channel it really is

I have sinned. I confess. For a brief moment, I thought Ukrainian television was heading towards democracy. While the owners are busy with disputes, journalists have the chance to expand the freedom platform, I thought. They stick to the concept of adjustment inherited from Soviet times: you take advantage of us, and we’ll try to take advantage of you. It works sometimes, albeit briefly. But I was wrong.

Rumours that Inter, one of Ukraine’s top TV channels in terms of coverage, is preparing to change its editorial policy have been circulating since fall, fueled by predictions that the owner might switch to the provisional opposition. The rebranding of the TV channel under button 1 on the remote control began after the widely-advertised appointment of a public board, made up of respected people, followed by a change in the tone of the news and the replacement of a host on a prime-time political talk show. This look like progress, doesn’t it?  

Shortly after the media community and the public processed the novelty, the news about Valeriy Khoroshkovsky selling Inter to Dmytro Firtash came like a thunderbolt from the clear blue sky. Reasonable explanations for what was happening were few. Experts mostly discussed the enormous price of the deal: USD 2.5bn! Wait, are we talking about the same things here?

The price is so huge that it silences all other questions. Okay, let’s start with the price. Khoroshkovsky sold only the controlling stake of 61%. So, the whole channel must be worth around USD 4bn? There are no such prices in Ukraine – nor can there be. Of course, Inter Media Group owns additional assets, such as NTN, K1, Piksel, MTV and others, with a total share of viewers of about 10%. However, all these numbers would make sense if Ukrainian television was a business. But it’s not – and will not be for the foreseeable future.

Next: the connection between Firtash and Khoroshkovsky, overall and particularly in terms of Inter, is well-known. Dmytro Firtash has had an option to purchase 50% of Inter Media Group Ltd. since around 2007 – and this has been said many times in public. In 2010, Ihor Kolomoyskyi acquired 1+1, another leading TV channel with an audience and coverage almost equal to that of Inter, and a package that went with it, for all of USD 300mn. So, why would anyone pay so much more for Inter? But, who’s going to check these fantastic billions, since one group of foreign companies bought another group of foreign companies?  If you want to – clarify it in Vienna, Nicosia or Road Town.

So, why make the deal public? It is common knowledge that Inter, just like any other TV channel in Ukraine, survives on subsidies: it earns nearly USD 100mn a year, and spends USD 170mn. If it’s not business, what is it? Tertium non datur: it’s either business, or propaganda (I do not use this as a negative word but there should be clear criteria for defining this phenomenon). Thus, a high-quality propaganda resource with a controlled and predictable target audience is attractive from the propaganda rather than the commercial perspective. So, it makes sense that the figures that prefer silence are trumpeted on the first page. Apparently, this is a message. For whom? Perhaps, for those who should realize the scale of the new owner’s sacrifice for the sake of the Family’s peace, and his own growing significance?

The value of Inter is in its symbolic role rather than in its automatically-counted rating. Button 1 on the remote control is always first, no matter where. The audience has this phantom muscle memory, although today, hardly anyone – including marketing experts – remembers that many years ago, Inter’s frequency was used by Channel 1 of the USSR’s Central Television, and later – the First Ostankino Channel. This was once the territory of the everlasting newscast Vremia (Time), a television version of the Pravda (Truth) newspaper; followed by the daring shows that exceeded what was permissible, such as The View, Press-Club, Before and After Midnight… All the same, they all come from Moscow. Add to this the ostentatious hosting of Inter’s trademark shows in Russian. All this smells of stale “doctor’s” sausage, Buratino lemonade and the fragrance of a grandmother’s perfume. In this context, Inter’s official slogan that says “The country’s main channel” requires an explanation as to which country.  

There is no sense in pretending that someone knows more about the details of the deal than the people directly involved in it. Still, the background is pretty clear. A charming metrosexual thought that he would no longer run errands for primitive guys from the provinces with poor taste and made it clear that he was ready to continue to play his game for the long-term (at least three more years). He was soon put in his place. Perhaps, he was allowed to save face as a reward for his role in the previous purging of the Ukrainian media environment. This reminds me of an old-old Soviet joke: the foreman of a lumber brigade, Petrov, calls in to the radio, asking for Hindemith’s concerto for viola and orchestra to be played. “Stop f..ing showing off, comrade Petrov. Listen to the Amur Waves waltz,” the host replies.

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