Aleksey Volin: “The media industry's losses from the coronavirus pandemic will amount to approximately 100 billion rubles”

The “scissors” of traffic and revenue

Against the background of the coronavirus pandemic and restrictive measures, there is an unprecedented growth in demand for traditional media products, Aleksey Volin said. TV viewing has increased by 30-50%, the websites of leading publications have increased their audience by 100 million users over the past month, as well as 40-60% increase in visits to the sites of regional newspapers.

At the same time, the economic situation in the industry leaves much to be desired. According to Aleksey Volin, now there is a paradoxical phenomenon — whats is known as the “scissors”: the number of users in the media is significantly increasing while revenues are sharply declining.

“We are observing a serious drop in retail sales because many kiosks were staffed by people over 65 years of age, and, secondly, the number of people on the streets has fallen significantly. We are observing a regional decrease in the number of visits to the kiosk network, which is about 25-30 per cent, and somewhere over 50 per cent, which is why newspapers have been forced to cut their circulation. At the same time, again, traffic on websites has increased significantly," said the deputy minister at the press conference of Interfax.

However, there is a serious drop in advertising budgets, which is affecting both federal and regional media. By the end of 2020, TV advertising budgets may be reduced by about 25-30% — from 40 to 50 billion rubles. The situation is being extremely dramatic in radio: advertising budgets may be reduced by more than half, meaning that the industry is going to lose about 8 billion rubles. In some regions, the advertising on local radio has fallen by 80-90%.

“As for print media, the situation is being more complex since their source of income is advertising (in print and online), subscription and retail. Advertising on paper is expected to fall by about half — by 7 billion rubles. As for advertising on paper media, the drop may amount to 3-4 billion rubles. In retail — about 10 billion rubles. And it is clear that there is a natural trend, which is to reduce the share of paper subscriptions — here losses can amount to about 4 billion rubles. At the same time, the book industry may lose about 10 billion rubles. In total, the industry's losses will amount to about 100 billion rubles," Volin concluded.

“The share of publications that will leave the market will be 10-15 per cent”

Aleksey Volin also forecasts a reduction in the number of regional and federal media outlets. At the same time, the deputy minister noted that this would have happened without the pandemic.

“The thing is that we have long observed a process in which the number of market participants is greater than the market is able to feed. In the current environment, those media outlets that either did not have a sufficient economic base or a sufficient number of users are likely to leave the market. At the same time, it should be borne in mind that these indicators will be more dramatic for the regions: advertising volumes have already decreased by 50-70 per cent there, what is more — it has decreased by 50-55 per cent in those publications that were considered deserved regional leaders," Volin said.

According to the speaker, the share of publications that will leave the market due to the pandemic may amount to 10-15% of the number of media outlets.

“This does not mean that unemployment in this area will increase by 10-15 per cent. The thing is that when we talk about regional media, we see a very high percentage of part-time employment. According to our forecasts, the percentage of journalists and employees who will become unemployed will be much lower. Moreover, professionals will definitely find a job — there are not enough such journalists everywhere," the official believes.

The speaker describes the media life after the pandemic as “interesting, but difficult”. It will be interesting because the media has increased its audience and they will need to fight for its preservation, and it will be difficult because the money will become noticeably less. As a result, the strongest and most interesting will survive, and society will only benefit from this.

“We are not talking about allocating budgetary funds for the support of the media”

“Due to the current situation, our ministry has asked the government of the Russian Federation to include the media sphere among the most affected sectors of the economy. We hope that this will happen soon. This decision is expected. For our part, we are planning to take a number of steps in the near future that would be aimed at supporting the industry," Aleksey Volin said.

The first thing that is planned to be done is to reduce the number of mandatory licensing requirements that currently apply to television and radio. One of the major support measures, according to Volin, may be allowing regional radio stations and TV channels not to broadcast between midnight and six in the morning, which would save on loading their transmitters. The relevant ministry has also proposed to weaken a number of control measures.

“I note that we are not talking yet about how to allocate budget resources for the support of the media. We are discussing postponing the payments that the media has, reducing control measures, and liberalizing advertising legislation," the deputy minister said.

“Broadcasting formats are changing significantly”

Media formats have also changed in the context of the pandemic. The contact methods of communication are becoming less and less, communication is carried out mainly using the Internet. Television programmes are filmed without the public, and experts are invited to speak in an online format.

“We see that broadcasting formats are changing a lot. News is increasingly replacing entertainment programmes. News formats have become extremely popular. The viewing grid is changing — it focuses on those who stay at home. It is also interesting that the beginning of prime time has changed — it has shifted from 6 p.m. to 3 p.m.," says Aleksey Volin.

Russian TV channels also reacted to the fact that students are now being on distance learning.

“They have increased the share of educational and cultural programmes in the first half of the day. I would like to note that a new thematic project is planned to be launched soon: starting from April 27, OTR TV channel will broadcast educational materials in the form of lessons from 9 a.m. to 12 p.m. on weekdays. The project was implemented by request by the ministry of education of the Russian Federation. This is done for children who do not have the opportunity to study online, as well as for those who live outside the zone of access to the normal Internet. Many regional TV channels have already included such broadcasts in their broadcast network," Aleksey Volin concluded his speech with the announcement.