Show Business 1991-2000
Turnover in Russian show business is equivalent to the level of a small European country, which is a long way from the hundreds of billions of dollars circulating in US show business. Experts estimate that sales of cassettes and CDs in Russia (including pirate production) in 2000 were about $440 million; and concert fees, even for the most popular stars, are no more than $100 000 per concert.
The market share of pirated audio products in Russia last year was 64%, which is an increase compared to 2000. Experts believe that the resulting losses to owners of the legal rights to audio recordings could exceed $500 million. Nevertheless, show business is on the rise as a result of the increased buying power of the population, pricing policy adjustments by producers, and an improved legislative base.
HISTORY: 1991-2000
By 1991, Russian show business had almost completely rid itself of its Soviet heritage: the sole state record company, Melodiya, lost its influence on the market and the official concert structure gave way to a private structure. Its later history included the establishment of more civilized market regulations and an overall increase in activity, which was seriously affected by the crisis of 1998.
1991
The concert "Monsters of Rock in Tushino" was held at an airfield in Tushino in September. Metallica, AC/DC, and Black Crowes were on the stage, and spectators battled with the police in front of it. The concert was organized by a little-known entrepreneur, Boris Zosimov.
Radio Maximum, the first FM radio station in Russia, went on the air in December. Its founders were the weekly Moskovskie novosti (Moscow News) and the American companies Westwood One, Inc., StoryFirst Communication, and Harris Corporation. Radio Maximum's first programming director was Aleksandr Kasparov, who now works as EMI's regional director for Eastern Europe.
1992
An audio and video market opened in western Moscow at the former record club of the Gorbunov Palace of Culture; it later became the famous "Gorbushka", the world's largest market for pirated audio and video products.
The first Ovatsiya (Ovation) national music prize was presented in the Rossiya State Concert Hall. The organizers were the little-known businessmen Grigory Kuznetsov and Anatoly Sirotyuk; the first prizewinners included the group Na-Na, Oleg Gazmanov, Tanya Bulanova, poet and songwriter Aleksandr Shaganov, and Radio Evropa Plus. From the very start, Ovation was dogged by scandals over accusations that prizes were being presented for bribes. In 2001, Sirotyuk announced that in future, money offered for prizes would be accepted officially.
1993
The Russian recording company SBA/Gala Records concluded an agreement with EMI, whose catalog included albums by the Beatles, David Bowie, and many other artists. Thus, the first Western major appeared on the Russian market.
The Supreme Soviet of the Russian Federation passed the law "On Copyright and Allied Rights"; a year later, a representative office of the International Federation of the Phonograph Industry opened in Russia. A legislative basis for compliance with copyright and allied rights and the fight against piracy appeared for the first time.
1994
Polygram opened a representative office near "Gorbushka"; it was the second major record company to have official representation on the Russian market. The first manager of Polygram Russia was Boris Zosimov, who began to produce recordings of Russian artists, including Filipp Kirkorov the group Obermaneken, and his daughter Lena Zosimova, under the world-famous trademark.
1995
In May, Radio Maximum organized the first Maxidrom festival. The festival was organized by Radio Maximum's programming director Mikhail Kozyrev, producer Dmitry Groisman, and managers of the Rise Music company Vladimir Meskhi and Leonid Landa. The groups Agata Kristi, Va-Bank, Bravo, Nogu Svelo!, Neprikasaemye, and others took part. The experiment was very successful and grew into the first major annual rock festival in Russia.
A third recording major, BMG, opened a representative office in Russia.
From May through July, world-renowned stars, including the group Roxette, Joe Cocker, Elton John, Diana Ross, and Julio Iglesias, gave performances in Moscow. Most of the concerts were organized by SAV Entertainment.
The magazine O!, the first Western-style publication devoted to popular music, was presented in Moscow in October. It was published by Seva Novgorodtsev, the legendary host of music programs for the Russian service of the BBC. There was only enough money for three issues. The Russian market niche for high-quality popular music publications was vacant until 2001, when the first issue of the Russian edition of the British weekly New Musical Express was published.
The Aprelevsky zavod gramzapisi (Aprelevka Record Factory) became a corporation, with about 50% of its shares remaining as state property. The new company was soon on the verge of bankruptcy and was saved only by renting space in the factory. Noodle-making equipment is still operating at Aprelevka.
Radio Stantsia (Station) began broadcasting in October. It was set up by the Rise Music company and was oriented to the latest dance music.
1996
Boris Yeltsin's pre-election campaign was accompanied by the "Vote or Lose" initiative that was taking place all across the country. Campaign concerts were given by nearly every Russian rock and pop star. The action reached its peak in June in Rostov, when Yeltsin danced on the stage during a concert given by singer Evgeny Osin. A few days later, "Vote or Lose" organizer Sergei Lisovsky was arrested for trying to take a box containing half a million dollars from Government House.
General Records, a company created by SAV Entertainment and music critic Artemy Troitsky, issued the first complete collection of Alla Pugacheva's songs. The collection of 211 songs was issued on 13 CDs and sold for $150. It was rumored that Pugacheva had been paid more than $100 000 for it, the first time ever in the history of Russian show business that an artist had been paid so much.
In September, Kirill Zelenov, a co-owner and manager of ZeKo Records, was murdered in Moscow. At the time, ZeKo was the largest Russian recording company, with Alla Pugacheva, Mikhail Shufutinsky, Irina Allegrova, Igor Nikolaev, Natasha Koroleva, and Aleksandr Malinin, the groups Tekhnologiya, Dyuna, Primus, Lesopoval, and Chaif, and dozens of other artists in its catalog. The investigation revealed that ZeKo's other owner (the company name was derived from the first two letters of the owners' surnames), Vladimir Kozlov, had ordered the killing after Zelenov accused him of theft and tried to remove him from the founding group. In 2001, Kozlov was sentenced to 11 years in prison.
1997
In September, singer Iosif Kobzon, who had promised to end his stage career, gave a farewell concert at the Rossiya State Concert Hall. The entire Russian political and business elite was in the hall, and the concert lasted until 6:00 the next morning. Kobzon only partially kept his promise; although he has not given solo concerts since then, he regularly takes part in combined pop concerts, with a preference for birthday celebrations for colleagues on the stages of the Rossiya Concert Hall and the Kremlin State Palace.
French musician Jean-Michel Jarre gave a show at Vorobevy gory (Sparrow Hills) in September as part of Moscow's 850th anniversary celebrations. More than 2 million people attended the concert, and the police took desperate measures to limit the surge of new spectators; but people kept arriving in the square in front of MGU (Moscow State University) and even crossed the Moscow River on rafts. At the end of the show, the nearest Metro stations were closed in order to avoid a crush. It took people several hours to get home.
1998
Soyuz, one of Russia's largest recording companies, concluded an agreement with Warner, the fourth major company to enter the Russian market. Warner worked with Soyuz until 2000, after which it decided not to prolong the contract and began working with the young Russian company WWW Records. The reasons for Warner's decision to end relations with Soyuz were not disclosed.
In April, Boris Zosimov announced that an agreement to launch MTV Russia had been concluded between BIZ Enterprises and MTV Networks. The channel began broadcasting in September of the same year. The first video to be shown was Mumy Troll's "Vladivostok-2000."
Several days before the August crisis, the Rolling Stones played at the Big Sports Arena at Luzhniki. The group was paid $1.4 million, an unprecedented amount for Russia. It was rumored that Silence Pro, the organizers of the concert, had sustained huge losses connected with their inability to collect ticket sale proceeds from the distributors; since then, it has been involved in less ambitious projects.
The Russian audio market collapsed as a result of the financial crisis: of the 220 record companies operating on the market, only 70 were left at the end of the year. Distributors were hardest hit, suffering enormous losses due to contracts concluded in rubles. Nevertheless, almost all the major firms survived the crisis.
Nashe Radio (Our Radio) began broadcasting in December as the first project of the Logo-VAZ News Corporation set up by Boris Berezovsky and Rupert Murdoch. The head of Nashe Radio was Mikhail Kozyrev, who had been suddenly fired from Radio Maximum five months earlier.
1999
The singer Alsu signed a contract to produce an album with Universal Music. Alsu's business affairs in Russia were managed by Universal Russia, renamed from Polygram after Seagram bought the company.
A concert organized by MTV Russia featuring the American group Red Hot Chili Peppers took place in August on Vasilievsky Spusk. A year later, the mayor of Moscow prohibited all mass events near the Kremlin, allegedly after a personal appeal from Patriarch Aleksy II, who was deeply offended by the concert.
2000
Sony Music entered the Russian market, which meant that all of the world's largest recording companies were now represented on the Russian audio market.
Nashestvie (Invasion), Russia's first two-day open-air rock festival was held in August in Ramensk near Moscow. The fears expressed about the event were not borne out; everything went off without any excesses, even though more than 100 000 people attended. At night, people who stayed watched the movie Brat-2 (Brother-2) on giant screens, and the festival closed with a concert by Zemfira.
by Yury Yarotsky
PRESENT
Even in Soviet times, enterprising impresarios knew how to organize tours so that there would be enough money for decent fees for the artists and adequate commissions for themselves. With the transition to capitalism, they were able to make full use of their entrepreneurial talents. However, not everyone was successful, and, in general, show business is dominated by the people who are far from being impresarios.
ARS
This company is headed by composer and businessman Igor Krutoi and is involved in nearly all sectors of show business, including managing artists and organizing concerts and radio broadcasts. Artists Valery Leontev, Aleksandr Serov, Boris Moiseev, Laima Vaikule, and Irina Allegrova and the groups Diskoteka Avariya and Premier-ministr work with ARS. ARS also has its own radio station, Love Radio. In 2000, ARS was almost granted late-night air time on RTR, where Russkoe muzykalnoe televidenie (Russian Music TV) was supposed to air from 1:00 to 6:00 a.m. as an alternative to MTV. However, Krutoi's project was defeated and his presence on television is limited to the programs Dobroe utro, strana! (Good morning, country!) and Pesnya goda (Song of the Year).
One interesting feature is that nearly all ARS artists had already been popular for many years and had become famous before they started working with Krutoi, but ARS has not succeeded in creating new stars.
"LogoVAZ--News Corporation"
The company manages the media assets of former State Duma deputy Boris Berezovsky and is the joint creation of Berezovsky and Australian entrepreneur Rupert Murdoch. It includes two entertainment radio stations, Nashe Radio (Our Radio), which started in December 1998, and Radio Ultra, which started in November 2000. From the commercial standpoint, the chosen formats of the two stations, Russian rock and alternative music, respectively, are not the most successful ones. Both stations are headed by Mikhail Kozyrev, who was programming director for Radio Maximum until 1998. The Ultra Production company, which produces programs for the radio stations, is also part of LogoVAZ-News Corporation. Kozyrev is one of the few radio station directors to regularly appear on the air. He is the host of Nashe Radio's hit parade program Chartova dyuzhina (Top 13 Hits).
LogoVAZ-News Corporation also includes the recording company Real Records, which fills the market spot once occupied by the now-defunct Russian Public Television (ORT) subsidiary ORT Records. Today, Real Records works with singers Alsu and Zemfira as well as with the group Chaif.
MTV
The television station MTV Russia and the radio station Hit-FM are controlled by entrepreneur Boris Zosimov, who has worked in nearly all areas of show business, from concerts (the "Monsters of Rock in Tushino" festival in 1991 featuring Metallica, AC/DC and Black Crowes) to the audio business (he was head of the Russian office of Polygram, now Universal Russia, and still owns 49% of its shares) to publishing (Imperial, one of the first Russian glossy magazines). The appearance of MTV Russia was preceded by a long relationship between Zosimov and the management of Viacom. Through Zosimov's efforts, film clips with the MTV logo have appeared at various times on the 2 x 2, Ostankino, and TV-6 television stations. Then Zosimov started broadcasting under his own label BIZ-TV, the base for MTV Russia, which began broadcasting in September 1998 at the height of the crisis.
In an interview with Kommersant in September 1999, Zosimov announced the sale of part of his MTV shares to Viacom, without saying how many he was selling and how much he had left.
Having a video clip played regularly on MTV has become a necessary condition of success for an artist. For those who do not agree with MTV's format, there is Hit-FM, which has a more liberal music policy. A double hit on both television and radio is very powerful advertising and has a favorable influence on future concert fees and revenues from sales of audio recordings.
MTV does not actually take money from artists; instead the company has devised a more subtle means of collecting dues: the artist is either offered the option of participating free of charge in regional promotions or he is told that his video will be only be shown at the proffered level if it is produced by MTV staff, for a suitable fee.
MTV Russia's only real competitor is Muz-TV owned by Alfa Group. Its ratings are slightly lower than MTV's, but it has a more developed regional broadcasting network. Muz-TV's general director is Ruben Oganezov, who headed the large production firm Mediastar before coming to the television channel. Until last summer, Mediastar worked with the most successful Russian rap performers led by Detsl and then managed and produced albums for the singer Nikita, the group Dinamit, and other popular new artists.
Russkaya Mediagruppa (Russian Media Group)
This company is managed by three owners: general director Vladimir Bogdanov, president Sergei Arkhipov, and chairman of the governing board Sergei Kozhevnikov.
The best known project of ZAO Russkaya mediagruppa (RMG) is Russkoe radio (Russian Radio), Russia's most popular radio station. RMG also owns Radio Monte-Karlo, Dinamit-FM (Dynamite-FM), Radio Tango, and Russkoe Radio-2, which opened in place of the dance music radio station Stantsiya (Station) bought by RMG last year. The recording company Gramophone Records and companies that organize tours for Russian artists in Russia and abroad are also part of RMG. Each year, Russkoe radio sponsors the Zolotoi grammofon (Golden Gramophone) awards ceremony at the Kremlin with the participation of nearly all the stars of the Russian stage.
Control over such an enormous share of the airwaves (Russkoe radio is heard almost everywhere is Russia) automatically makes RMG's owners an influential force in Russian show business.
SAV Entertainment
SAV Entertainment was founded by Alla Pugacheva's former husband Evgeny Boldin and singer Nadezhda Soloveva's former interpreter. In recent years, the company has been first among firms that organize Russian tours for Western artists.
Through SAV's efforts, stars such as Diana Ross, Elton John, Sting, Brian Ferry, Depeche Mode, Offspring, Eric Clapton, the Scorpions, Spice Girls member Mel C, Yes, Brian Adams, Prodigy (who gave an unprecedented free concert in Manezh Square), and many others have come to Russia. This experience with Western stars makes it easy for SAV to sign agreements with the musicians' Western agents. Alfa Bank regularly sponsors especially expensive events, such Elton John's concert at Tsarskoe Selo, which gives SAV a huge advantage over competitors, since unlike the West, in Russia, it is nearly impossible to recover all expenses for organizing concerts of Western stars from ticket sales.
However, SAV does have flourishing competitors.
The service record of Russkaya akademiya razvlecheny (Russian Academy of Entertainment), formerly Agenstvo Andreya Agapova (Andrei Agapov Agency), includes Russian tours by Enrique Iglesias, Eros Ramazzotti, Marilyn Manson, and others, as well as last year's canceled bullfight scheduled to take place in Moscow.
Promoter Vladimir Kiselev, who previously organized the Belye nochi (White Nights) festival in St. Petersburg and concerts sponsored by Iosif Kobzon's company Moskovit, now heads the Kremlin state unitary enterprise. It is reputed that the executive office of president Vladimir Kozhin's administration is his patron. Kiselev prefers to bring in established rock stars, such as Status Quo, Mungo Jerry, Rick Wakeman, etc., although Kiselev also organized last year's concert by Jose Carreras.
The TCI company specializes in "heavy" music. Its greatest success was the concert by the German heavy metal group Rammstein at Luzhniki, which led to serious concerns about mass disorder and unprecedented security measures. TCI has also been the first to risk organizing tours of Western stars beyond the confines of Moscow and St. Petersburg, and at various times has brought groups such as Nazareth and Deep Purple and singer Sam Brown to several Russian cities.
Another company, JSA, has been very active in the past two years in expanding its activities from providing technical support for concerts to organizing them. JSA's service record includes concerts by Roxette, Alice Cooper, Guano Apes, Muse, and others.
by Yury Yarotsky
TRENDS
Russian show business is developing strictly according to the rules of a market economy. Small companies either disappear, or if they are lucky, they are bought up by larger companies. The major players in turn are increasingly filling the market niches leaving no room for newcomers.
Like any other business oriented to specific consumers, show business depends more heavily on buying power in the country than anything else. This was particularly apparent after the 1998 crisis, when the number of tours by Western artists dropped to almost zero and recording companies either went bankrupt or reduced their activities to a minimum. Today, the reverse process is happening, although problems still remain.
Thus, as total sales volumes have increased, the volume of pirated products has also increased. According to IFPI (International Federation of the Phonograph Industry) estimates, the share of pirated products on the Russian audio market in 2001 was 64%, an increase of about 2% compared to the previous year; losses to rights holders were as much as $550 million by various estimates. A total of 42 million pirated CDs and 154 million pirated cassettes worth $250 million have been sold. Piracy has increased on the CD market due to the increased production capacity of domestic factories and an ineffective system for regulating the labeling of legal products, whereas it has decreased on the audiocassette market. Experts believe this is due to more the reasonable catalog and pricing polices of large legitimate companies.
Five large Western recording companies, or the majors as they are called, are becoming more and active on the Russian audio market. These are EMI, Warner, BMG, Sony, and Universal. BMG has signed a contract with singer Linda, Sony works with the group Bi-2, and Universal promotes singer Alsu and the duet Tatu.
In addition, experts note the increasing activity of regional companies involved in the audio business. One that stands out is Russky zvuk (Russian Sound), which includes companies from Pereyaslavl-Zalessky, Kazan, St. Petersburg, Mineralnye Vody, Rostov-on-Don, and Novosibirsk. Lyube, one of Russia's most successful groups, has announced its collaboration with Russky zvuk. Creation of a more orderly system for selling legal audio products in the regions should help increase the share of licensed CDs and cassettes. Few recordings sell more than 100 000 copies in Russia, which is considered low even in European countries with much smaller populations than Russia's.
The tour business is also turning around. Large-scale concerts by Russian stars take place several times a week, sometimes even several times a day, which would have been unthinkable even a year ago. Things are also going well with tours by Western stars, with concerts in large squares several times a month. This year, there are plans for concerts by Bob Dylan, Whitney Houston, Aerosmith, Toni Braxton, Radiohead, and Pink Floyd member Roger Waters. At present, Russian promoters are unable to bring superstars like Madonna and Paul Macartney into the country, because it is impossible to cover the expenses for their concerts even with active sponsorship.
Few changes are expected in the mass media with close ties to show business. The weak players have been successfully crowded out by the stronger ones. In recent years, unprofitable radio stations like Radio Roks, Radio Nadezhda, Radio NSN, and Stantsiya have been closed, and the large holdings that have taken their place care mainly about advertising revenues rather than cultivating good musical taste in their listeners. Thus, any changes will be connected with overall growth in the advertising market, in other words, with radio stations' profits. The same applies to entertainment television.
As a whole, Russian show business is on the rise by all indicators, expect one. The West is interested in it only as an importer of musical products and performers. The many attempts to interest Western audiences in Russian music have invariably failed to a greater or lesser extent. The only breakthrough has been by the Rostov techno-group PPK, who are in third place on the list of greatest hits in the UK; but this is probably a lone exception that is unlikely to be repeated.
by
Yury Yarotsky
All the Article in Russian as of Feb. 12, 2002
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