OREANDA-NEWS. October 7, 2011. Prospects for developing media market and the sector’s modern technologies were the subjects discussed at the meeting.

The National Media Group is the largest media holding in Russia. Its shareholders include Severstal, Surgutneftegaz, MTG and RTL.

The Group includes Petersburg-Channel 5 TV and Radio Company, Channel One, REN TV Media Holding, Izvestia newspaper, and Russian News Service radio station.

MTG AB is a Swedish media company whose holdings include Viasat Broadcasting, Radio MTG, seven Internet portals and other assets. It owns 28 free television channels in 11 nations in Scandinavia, Western Europe and Africa.

RTL Group is the leading European media holding that includes 41 television channels and 34 radio stations in ten different nations: Germany, France, Belgium, the Netherlands, Spain, Greece, Russia, Hungary, Croatia, and Luxembourg.

Participants in the meeting included MTG majority shareholder Cristina Stenbeck, MTG President and CEO Hans-Holger Albrecht, RTL Group CEO Gerhard Zeiler, Surgutneftegaz CEO Vladimir Bogdanov, Severstal CEO and National Media Group board of directors chairman Alexei Mordashov.

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PRESIDENT OF RUSSIA DMITRY MEDVEDEV: I would like to welcome all the shareholders of the National Media Group, as well as our foreign partners who are involved in Russian media companies. It is interesting for me to speak with you, to discuss prospects for developing the industry, and to talk about modern technologies that could be used to develop the media sector in our country.

Your cooperation is an example of successful interaction between Russian investors, major Russian companies and foreign companies in a rather sensitive sector, because, let’s be honest, not every European country allows foreign shareholders into its media holdings and its television companies, as well as companies involved in information technologies. But we are an open nation, hence our position on the media. We believe this is the right approach. It allows us to resolve investment challenges and perhaps more global challenges as well, given that we are all living in one world and we are all concerned with the same problems.

I imagine you will tell me about prospects for developing your businesses; I would be interested in hearing about it, especially since I have always given a lot of attention to development prospects for the media and new information technologies in our country, and I think that this would be quite useful for everyone present.

So I would like to warmly welcome you all, and I am ready to discuss a variety of issues with you.

Would you like to say something?

OAO BANK ROSSIYA BOARD OF DIRECTORS CHAIRMAN YURY KOVALCHUK: Yes, if I may.

DMITRY MEDVEDEV: Of course, Mr Kovalchuk.

YURY KOVALCHUK: First of all, Mr President, thank you very much for this meeting; it is very important for us. But, if you allow, before I talk about the future, I would like to say a few words about the past.

I will speak on behalf of Russian shareholders. We entered this business just a few years ago, and I will say with full honesty, we had some very serious doubts and reservations, because our entrance was quite broad and we invested simultaneously in television channels, content production, print media, and companies involved in the advertising market. And it’s important to keep in mind that the peak of our investments coincided with the crisis period – the very point when the crisis began – and we certainly were hesitant on whether to move forward, but nevertheless, we did. Now, I want to say that fortunately, our fears did not materialise.

DMITRY MEDVEDEV: In any case, with regard to investments as well as the crisis – unfortunately, everything is repeating anew.

YURY KOVALCHUK: Yes, but I am talking now about the media market. Russia demonstrated a surprisingly fast post-crisis recovery. In 2011, Russia demonstrated steady market growth, and currently has one of the highest growth rates in the world. In terms of potential, we now understand from a much more professional standpoint that Russia is almost among the top ten highest-potential nations in the world.

The second concern was entirely different: we entered into this business and invested particularly in media assets, including companies that were founded before us – we did not launch them. Teams were already there, including a journalist team, and they already had their own audience. I will say frankly that we were apprehensive of pressure from the government with regard to what should be done, and how.

DMITRY MEDVEDEV: And how did the government react?

YURY KOVALCHUK: That’s what I will talk about. This was a real concern for us. Right now, I am not speaking about the issue of whether or not we agree with particular positions held by the television channel; I am speaking about business. For us, this would have been destructive to business. Now, I can say that the government did not interfere in this process in any way, which is extremely important for us.

The third, and perhaps last of the concerns I would like to mention today was the fact that since we were entering an area of business we did not know, we did not have any background or professional training. I am referring to the Russian shareholders. So we initially envisioned our cooperation with professional international companies that had a wealth of experience in this field. As you already stated earlier, this is a very sensitive field, and in many countries this kind of cooperation in media assets, particularly electronic media, is frowned upon.

I would like to use this meeting as an opportunity to express gratitude on behalf of Russian shareholders to the government for its policy in this process, which has provided the opportunity to do this. That is why one of the National Media Group’s shareholders is one of Europe’s largest holdings, RTL Group, whose executives are here today, and whose representatives are working within the board of directors of the National Media Group, which is involved in nation-wide broadcasting. As for the group of companies and channels making up CTC, here we have active cooperation and partnership with another major European holding, MTG, whose executives are here as well. And for this, we want to thank you.

DMITRY MEDVEDEV: I’d like to say that you have selected good partners in RTL and MTG. In this regard, it was the right choice.

CHAIR OF INVESTMENT AB KINNEVIK AND MTG GROUP MAJORITY SHAREHOLDER CRISTINA STENBECK: Mr President, thank you very much for having us today.

Partners, ladies and gentlemen,

First of all, I believe strongly in the partnership that we have managed to create in the last six years with the National Media Group. My family has a long history of working in Russia. Over the last 25 years, we have invested in various sectors, particularly in telecommunications and television. And today, Modern Times Group is a leading entertainment broadcasting company. So Russia has become a country of the utmost importance for us, both for our company and our group’s investors, and here is why. It’s the potential in terms of the size of the country and the progress we have reached there.

We are investing in Russian content, in Russian technology, talents and formats, and producing shows like Margosha and Voronini as well. We remain grateful for the support we’ve received over the years and the opportunity we’ve had to build our business up until now.

Most importantly, though, I want to thank this administration for allowing this kind of partnership to come to fruition, and to enable and support this kind of foreign specialist relationship with world-class Russian partners like National Media Group. We are encouraged by the positive development that we see here on the wider media front, and we hope to be an active participant here in the future development, so thank you.

RTL GROUP CEO AND MEMBER OF BERTELSMANN AG BOARD OF DIRECTORS GERHARD ZEILER: Mr President,

Thank you that you gave us the opportunity to be here today, to say a few words about our partnership.

We are a pure media company. We have 41 TV channels, 35 radio channels in ten countries, and we operate a global production company. And when we invested for the first time in Russia in 2005, we had quite mixed feelings. On the one hand, we were quite excited: excited about the potential of Russia, about the opportunity to be one of the– more or less the second one who was allowed to invest in Russia, and about the size of the country, about the potential of Russia. But on the other hand, I have to admit, we were all a little bit afraid, because we didn’t know what to expect, we didn’t know the country, we didn’t know our partners at that time. And today I can state that we are very happy with our decision to invest in 2005 and we are very, very happy with our partner, National Media Group. We are a media company which likes to have local partners, because TV is about local products, it’s about local culture. And we have a saying: “We are Germans in Germany, we are French in France, and we want to be Russians in Russia.” We are not the driver of the car here in Russia, but we are very happy sitting in the back of the car and watching Mr Kovalchuk steer the car, and sometimes, give our advice of our experience.

I want to end with saying that our company this year celebrates its 80th birthday. We are now six years in Russia, and I hope that my successors will also enjoy the 80th birthday and the 80th celebration of the relationship here in Russia and our investment here in Russia.