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Having been in charge of StarLightMedia strategies for seven years Fyodor Grechaninov was appointed Director of Strategy, Media Group Ukraine in the summer of 2019. Meanwhile he is in charge of coordinating media and information security issues for the Office engaged in working out Ukraine’s humanitarian policies as invited by Volodymyr Borodiansky, former Head, StarLightMedia and current Minister of Culture Youth and Sports.
When interviewed by Detector Media Fyodor Grechaninov shared his plans for the Media Group Ukraine development in segments, such as Pay TV and Digital sphere and namely: on the satellite channels encoding, tariff policy, launch of new channels, arrangements with Zeonbud; he also spoke on working out humanitarian policy, its implementation tools and relevant challenges dwelling on how and where these two areas of activities overlap (Humanitarian Office and Media Group).
-Why have you made up your mind to leave StarLightMedia and join Media Group Ukraine? You personal motivation, basically? What is the task you are commissioned with by the Group?
- In fact these are two separate decisions. I left StarMedia on April 1 and found myself in Media Group Ukraine on July 1. Having resigned from StarLightMedia I could not even imagine that might turn up in Media Group Ukraine. It was Yevhen Bondarenko, my former colleague in StarLight invited and even interviewed me. And he himself appeared at the forefront of MGU in summer. I am tasked with issues quite similar to those I used to deal with in StarLightMedia. To break even and take the leadership in our key segments in accordance with our strategy. Thus I am in charge of strategy assuming responsibility for our results in the Digital sphere and Pay TV.
-All media groups are seeking improved business performance. For example the “Pluses” (1+1 Studio) claimed that they are supposed to break even till 2021, StarLightMedia – by this year end…
- I am of the opinion that StarLight will be money-making by the year end, that’s for sure. It’s my view of the situation.
-And what about Media Group Ukraine, when will it pay off the investments?
- It’s hard to say. We are just trying to give a new meaning to what is going on here. Can’t speak of the deadlines right now.
- Well, then what does it need to actually become a business? What is it lacking in?
- There is no telling. It’s a tough question. But we have some ideas. We will be ready to articulate them the moment they are approved or confirmed at the company level. It is too early now.
- Having joined the Group and worked there for two months they announced the suppression of Segodnia (newspaper). It was 100% not profitable at all. Was that your idea?
- No, it was not. It was implemented when I came to work there but I did not initiate it. It does fully agree with me and I would have put it forward unless other people had voiced it and implemented it without me.
-What are the implications for business? Does it mean essential savings for the Group?
- No, it is not. It brings about some savings. But this business area has never been of utmost significance to the Group neither in terms of earnings no in terms of costs. There is not any single particular decision that might dramatically change the situation. What we do need is quite a lot of reasonable minor steps. This is one of them. Is it well grounded. It sure is. That’s how I see it. It is my deep-rooted conviction. Was it necessary? Yes, it was. Will it have implications of its own? Yes, it sure will.
- Speaking of the Group restructuring? Any other areas subject to change?
- Our presence in Pay TV and Digital in general. It is my understanding.
- Oll.tv, an OTT service, has become controlled by Vega this year. And Xtra TV, a satellite platform remains with Media Group Ukraine. The decision had been approved before you were employed, hadn’t it? Why do you think it happened? What’s the point of bringing them apart?
- I wouldn’t like to comment on the decisions which have nothing to do with me. As of today we are bringing the OLL.tv business back within the Group and this is the decision I am privy to. I do think this is the step bound to be made and Media Group Ukraine will regain control over OTT and DTH platforms.
- OLL.tv has been recently awarded the first ever Ukrainian OTT provider license. So what’s the point of the a.m. step? On the one hand, OK, you set an example. On the other hand, a new law on audio visual services is to be adopted very soon. And registration would be substituted for licensing. So what’s the point of the step like that?
- Companies are characterized by their approach to legislation. They differ in this respect. That is the area where UMG makes all the difference as compared to the absolute majority of the market players. Legislative provisions are often conflictive. Pursuant to the current laws provider’s activities are subject to licensing. That, on the one hand. On the other hand no sanctions are stipulated for those engaged in these activities without a relevant license. A lot of market players view the absence of sanctions for the activities beyond the Law as the absence of legal requirements. When it comes to the Media Group Ukraine we disagree with it. We deem it binding to comply with the law even is the law does not stipulate any sanctions we should not be in breach of it.
- Don’t you just grudge the money spent for the license fee?
It is not for long that tax payment has become a generally accepted practice in this country. However some people and companies have been prepared to always implement it despite the fact of being less competitive. We might seek the answer to the question concerning the money? Have they grudged the money thus lost? Yes they did. But it was legally binding.
-What is your view of the OTT platform development? What about the OLL.tv strong suits and how is it going to move further accounting for the market competition? As of now you have your own exclusive pay channels which is an essential advantage to both, satellite operator and OTT platform as well. Will you stick with the product exclusivity? Or may be you are keen on other development strategy?
- I do think we would stick with exclusivity wherever we can afford it Exclusivity is rather a costly affair, a luxury. There is no simple and final decision in the case. We are well aware of the fact that the tasks faced require the Oll.tv improvement and update starting with design and engineering solutions and finishing with how we deal with content how we control user’s experience, etc.
- Well, getting back to the exclusivity issue. What about Football 1/Football 2? Do they remain exclusively within the OTT segment on the OLL.tv platform and on Xtra TV within the pay satellite segment?
- It’s pure business. We are always supposed to calculate such things.
- Are you commissioned with the task to produce content specially for Oll.tv, your OTT platform? It goes without saying that this is an expensive product which is not easily monetized. Besides, when we spoke last time you said this environment needs quite a different content. Have you any idea which exactly?
- The task has not been definitely formulated as of now. Special content production for pay platforms calls for a high degree of expertise and know how which is not exactly available either in this Group or in this country in general. How will it work under the situation, what will it bring about in terms of subscribers, what about the pay-off period, etc.
- What you mean is: Media Group Ukraine is not prepared to take chances and produce, sort of Chernobyl of its own? I do understand that nobody would create such a product in Ukraine tomorrow. The kind of product might serve as a sort of a benchmark…
-There are no people here prepared to consistently produce a great deal of content for pay television market. But there exists a worse challenge: there are no people able to formulate clear cut authentic hypotheses as to the type of content we actually need, how much it might cost and how it will work in terms of subscribers, client base. This is the expertise we need first and foremost. Besides, there is no need to produce ourselves. We might order the production and that’s issue number two. Still important, but number two.
Netflix had a powerful first product, they made House of Cards. But first of all they made the right decision on what kind of series they need. Successful channels usually boast of good strong programming directors who seem to know what to order for their respective channels. Getting back to the current situation in Ukraine I have to conclude that our market have no or almost no people available that are able to say what we need to film for the VOD-platforms.
-Ok. Let’s get back to Xtra TV. Would you please speak on switching over from cable card system to set-top-boxes?
I can’t offhandedly articulate the figures but we lost a lot in clientele. It was a great loss. Not far from a half of it. On the other part, our satellite football channels do not suffer from piracy at all. We have switched over from the card solution to the card free. We wanted to fight piracy and we achieved it. However we have not solved the problem faced by our subscribers who therefore needed to replace the equipment. That’s the reason for a drop in clientele. Nevertheless, I am sure that’s the right decision from in the long term perspective. There was no other way because it is next to impossible to develop the pay TV market if you are not prepared to fight piracy, if you are not prepared to take chances and make sacrifices.
- Is Verimatrix reliable and if yes, to what extent?
- It has not been hacked into by now, remains intact and secure. Might it be hacked into? May be yes, there is nothing eternal in this respect. It operates now quite well it suits us all right.
- Would you speak on your next year price policy for providers? I mean the current prices valid for the contracts to be executed now and any changes for next year?
- The universal package means UAH2.40 per subscriber for the first year quarter and 3.60 per subscriber for the 2nd, 3rd and 4th quarter.
- Any plans to change prices for your channels in HD?
No, no plans at all. And it is only logical. When we charge the same price to providers who are able to rebroadcast HD and to the ones who are not we deal the former a good hand thus encouraging providers to introduce changes in their technology. Each household would prefer HD broadcast without price increase. Therefore we might witness innovative technologies naturally ousting obsolete technologies.
- You are now in charge of coordinating media and information security at the Office for Ukraine’s Humanitarian Policy. This is rather a far reaching and key area of activity. What about strategy in media and what about its implementation steps?
- It’s too early to speak of the specific steps. We are supposed to formulate the objective.
- But you have been addressing the issue for a few months now…
-That’s true. But there are two question pools which differ greatly. The first one is a range of issues related to segments, such as media and information security. We’ve gathered a great number of problems available on the market.
- Which of them are key problems?
- First and foremost, we would start addressing those of them which might be effective for the industry. For example, fighting piracy. On the other hand, it would take us quite long to improve the professional level of local journalists and the results would turn up in 5-7 years. Therefore we prefer to launch the processes which might improve the branch “health” status, so to say and make a difference to our key clients, viewers or readers.
- Fighting piracy and education of journalists are areas apart. How many similar problems have you detected?
- 258 problems grouped in 37 pools.
- Would you dwell on any of them (apart from piracy) that might bring about positive results in the nearest future?
- We might quite promptly draw up principles for the state to decide on types of content worth/not worth financing. We do not think that the state is obliged to do it in default, we have to establish criteria for the producers to meet so as to win support by the state.
It is my understanding, we might rather promptly pass decisions concerning broadcasting along the delimitation line and on the occupied territory.
- When are you going to present your readymade policy scenario in your particular area of activity?
- As I’ve already mentioned there are two different areas of activities. One of them is addressing the “bottleneck” zones and the other one – formulating Ukraine’s long term humanitarian policy. When formulating the latter one we are supposed to take account of the media sector current status and our expectations for it.
- What would you like to come up with?
- Anyway it is going to be a document in free access.
- OK, you would draw it up and present to the industry. And what would come next? Are you going to be in charge of its implementation? If so, you would need additional authorities to be delegated to you.
- I have no plans to become a full time public sector official. The strategy implementation calls for engaging both, relevant state structures and market players. When saying who is going to implement it we mean all of us together. The public sector will do its part and the market will do its bit.
Formulating strategy is a task to carry out. Another task is to engage as many players as possible whether public or private. This strategy might suggest cooperating with external players.
Photo: Ruslan Novosol