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Berlusconis to Be Publishers in Russia
The Italian publishing company Arnoldo Mondadori Editore, which is headed by Marina Berlusconi, daughter of former Italian prime minister Silvio Berlusconi, is entering the Russian market. It intends to form a joint venture at the beginning of next year with Independent Media Sanoma Magazines to publish the magazine Grazia. Grazia has been published on a trial basis since the fall.
Independent Media board member Elena Myasnikova told Kommersant that the trial run of Grazia “end in January and is very successful so far.” She confirmed that IM has reached a preliminary agreement with Mondadori and that about $10 million would be spent on Grazia, including $3-5 million on promotion. “Grazia is an absolutely new product on the market – a fashion weekly,” Myasnikova said, adding that Mondadori's participation in the Russian Grazia will be significant to advertisers in the fashion world. The next project for the joint venture will be Interni, a magazine for professional interior decorators.
Mondadori was founded in 1907. It is the largest media group in Italy and is now controlled by the Berlusconi family's Fininvest holding company, which owns 50.2 percent of its stock. Its proceeds in 2006 amounted to ˆ1.6 billion, EBITDA ˆ223.6 million and net profit ˆ114.7 million. Its market capitalization is about ˆ2 billion.
Analysts observe that Mondadori has chosen a strong partner to launch its Russian operations with in order to minimum its investment risks. Ruslan Tagiev of TNS Gallup Media noted that it will able to take advantage of the IM distribution system and advertising service as well. Natalia Gandurina, general director of Conde Nast Russia, said that Grazia has high production costs, making its premier “expensive and risky” and that both it and Interni will face stiff competition. Viktor Shkulev of the Ashet Filipaki Shkulev publishing company noted that, while Mondadori began licensing its magazines internationally a few years ago, “the Russian market is too attractive to miss the chance for direct investment.” Magazines lead Russian publishing in their growth rate. According to AKAR, press advertising grew up 15 percent in the first nine months of this year to $1.09-1.1 billion. Newspaper advertising rose by 17 percent to $245-255 million, and magazine advertisement is up 19 percent to $485-495 million.
A potential stumbling block is seen if Mondadori attempts to publish its weaker titles in Russia. Gandurina identified three interesting titles at the Italian publisher: Grazia, Interni and Flair. “The remaining brands are local and there is no sense in adapting them to Russia.”
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All the Article in Russian as of Dec. 11, 2006
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