Has Lebedev gone radio ga-ga?

In an interview with British newspaper The Guardian last week, billionaire Alexander Lebedev announced his intention to set up two new Russian radio stations - one of which would broadcast in English. They would offer talk-based, public service-style programmes and be self-consciously uninterested in chasing a profit. But is there a place for another Russian or a new English-language station in today's Moscow?

Lebedev's comments (and they are so far little more than that - his press service declined to comment on the remarks) come months after the BBC Russian service came under fire from British Russia-watchers for scaling back its broadcasts in favour of its Internet service.

Is it possible this new station could represent a resurgence of public-service broadcasting? It will enter a market dominated by Radio Svoboda, funded by the U.S. Congress, and Ekho Moskvy, an outspoken independent station funded by advertising, but is majority-owned by Gazprom.

Lebedev's radio station would be independent in the sense that it will be privately-owned. And his record as a stake holder in Novaya Gazeta speaks in favour of editorial independence. Indeed, he spoke of the media's important role in speaking out and criticising the government. But could it compete with Ekho Moskvy or Radio Svoboda, the two analytical stations that tend to compete for the audience that is Moscow's intelligentsia?

"There is always room for a professional radio station," said Yury Kostin, a spokesman for privately owned Prof-Media Broadcasting, which owns four Moscow stations. In his view, the development of Russian radio since the 1990s is filled with examples of start-ups filling niches that most people did not even believe existed.

Russkoye Radio, which started in 1995, proved there was room for Russian songs, which had until then been practically exorcised from the airwaves by English-language music. And Avto-Radio, one of Prof-Media's stations, forged the way for radio for drivers, and is now a market leader. There is no reason to believe that Lebedev's projects could not find their niche as well.

But the time of rapid growth in an underexploited market is over. Today newcomers must compete with over 50 FM stations, and breaking into the market is a tricky business. It is not just a matter of raising one's profile via advertising.

Keks FM, which belongs to the European media group, invested millions in a promotional campaign that saw its logo and frequency posted on billboards and posters around Moscow, but has so far failed to secure a significant audience share.

Some factors would seem to work in the project's favour, however. "Russia needs talk radio," said Kostin. "The number of talk programmes on TV demonstrates that Russians want to speak out, and they want to hear what other people say about the current situation."

The big investment will thus probably be not in advertising, but in drawing the kind of celebrity contributors that Russians want to listen to.

Lebedev seems happy to spend whatever he has to. He acquired The Evening Standard, a newspaper many thought was doomed, for a pound, and promised to plough millions of his own money into it. And he cheerfully said last week that "the markets are against print me­dia." He also promised to bring the same kind of attitude to his radio ventures, telling The Guardian that he is "about spending money on good causes."

He at least seems to be aware of the financial risks. According to David Fergusson, an IT and Media analyst at Renaissance Capital, the markets are also against radio: "Worldwide, whatever people had put into radio people are taking out, and putting into the Internet and television."  

And, given the economic crisis, advertising as a whole is down by 10-20 per cent.

The fall of advertising spending as a response to the economic slowdown exacerbates that trend. Radio stations, just like newspapers, are suffering (interestingly, Russian radio stations seem to notice this more. Radio advertising was growing 40 percent a year in Russia before the crisis, and radio stations here tend to say their major problem is not a long term trend away from radio advertising, but the uncertainty created by advertisers afraid to spend during the economic crisis).

And what about the other part of the plan? Lebedev said he bought two FM frequencies, and intended to use one for an English-language station, reckoning he could gather a potential audience of 1 million. Even given the high incidence of Western expats in Moscow, that figure would seem too optimistic. The city's English-language daily, The Moscow Times, has a print run of only around 35,000, and The Moscow News has a weekly readership of nearly 80,000. Even accepting that the project will operate at a loss, does such a project make sense? And if so, why has no one tried it before?

Broadcasting in English has been tried in Moscow before. The first Russian stations to start broadcasting on FM in the 1990s tried a similar strategy, adding English language newscasts into their regular programming. That wasn't as popular as it was meant to be, but industry insiders still think there may be room for such a station, based on Moscow's position as a cultural, economic, business and political centre.

A station broad­casting in an international language would certainly be a boon.

"I don't think it would be as popular as it could have been in 1991, when English as a language and a culture was very popular in Russia," said Kostin. "He'll have to work very hard, and he must be prepared for the station to be marginal. But I think what Lebedev is doing can be reasonable."