Russia's Ad-Free Public TV Channel Struggling Less Than Two Weeks After Launch

Less than a two weeks after its discreet launch, Russia's new public television channel OTR is already struggling financially.

A pet project of former president, now prime minister Dmitry Medvedev, the channel secured just 700 million roubles ($22 million) from the Kremlin for its first-year operating costs.

That's not enough to run the station, which went on air May 19, the ministry of finance says. Instead, the ministry has recommended that the channel invest a larger pool of money in stocks and shares to provide it with endowment income to cover costs.

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The proposal, in a letter to the communications ministry from deputy finance minister Andrei Ivanov, obtained by daily newspaper Izvestia, suggests the channel could be in for a tough ride.

Anatoly Lysenko, OTR head, has already appealed for an additional $22 million in funding this year to cover running costs, although Alexei Volin, deputy minister of communications has already said there will be no more money.

“The state has given you the basic tools,” Volin told OTR. “You now need to give the public the opportunity to take part. We believe that regions, big companies and agencies can help OTR through social advertising and sponsorship projects.”

The new channel, which carries no advertising, is designed to offer an open national forum for Russians that does not exist on other channels. The country's leading national channel, Channel One, is partially privatized (51 percent remains in public ownership), runs a range of commercial, news and entertainment programming and relies upon advertising revenues for its income.

Medvedev's vision for OTR is summed up in its mission statement, which includes references to “building a culture of participation in public life, the promotion of measures of individual behavior focused on self-development.”

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The lofty ideas are reflected in a programming schedule that includes on-the-hour news – with a heavy emphasis on reporting local news from around Russia, programming blocks aimed at young people, documentary films and quality films.

Raising money for an endowment big enough to fund the channel is an almost impossible task, observers say.

Moscow-based financial analyst Anton Sorok told Izvestia that to generate a big enough annual income from an endowment the channel would need a capital fund of $80 billion.

Raising that sort of money from public sources or sponsorship is unrealistic, he said.

The channel has the right to charge for public service announcements but so far has raised a paltry $12,000 from that source, Izvestia reported.