The Russian Press after Perestroika

Andrei G. Richter (Moscow State University)

Abstract: This article examines the changes that have occurred in the Russian press since the collapse of the Soviet Union at the end of 1991. Described are circumstances relating to legal regulation, ownership, the economy, printing facilities, newsprint production, distribution, and information flow. After its "golden age" of the late 1980s, the press in Russia has entered a time of serious economic problems, a sharp fall in circulation, and growing dependence on subsidies from the government. With the disintegration of the "central press," local publications seem to be gaining more importance in the information market.

Résumé: Cet article examine les changements qui ont eu lieu dans la presse russe depuis l'effondrement de l'Union soviétique à la fin de 1991. L'article décrit la situation concernant la réglementation, la propriété, l'économie, les imprimeries, la production de papier journal, la distribution, et les échanges d'information. Après son âge d'or de la fin des années 1980, la presse en Russie a entamé une période de graves difficultés économiques, une baisse rapide de la circulation, et une dépendance croissante à l'égard de subventions gouvernementales. Avec la détérioration de la presse centrale, les publications locales semblent gagner de l'importance sur le marché de l'information.

The demise of Communist rule in the USSR, followed by the disintegration of the Soviet Union itself, has brought a collapse and restructuring of most of the basic elements in the country. Partly caused by the activity of the mass media, it has also brought the fall of the old system of press and broadcasting. Glasnost, which originated as an official Communist Party policy supposedly directed to open a critical discussion of the country's past and of ways to improve socialism in the USSR, has broken the bonds of censorship and spread beyond all possible limits toward freedoms of speech and press. Perestroika, the restructuring of the Soviet economy and society which took place between 1985 and 1991, created new material circumstances and foundations for the development of the press and broadcasting. In this article I will be discussing the legal regulations, economic conditions, and information sources of the Russian press between 1992 and 1994. The present is a very unstable time for Russia, which puts any research in danger of being out of date by the time of publication. I have tried to focus on the steady trends that are likely to determine the future of the Russian press in the years to come.

Legal regulation of mass media

Among the most important constructive events that have taken place in the past three years has been the establishment of a legal basis for the freedom of speech and information. Until recently, the Soviet mass media had no legal basis. Their activity was regulated by decisions of the Communist Party's bodies and functionaries. Retrospectively, those decisions were in conformity with the Decree on the Press signed by Vladimir Lenin on October 27, 1917. That Decree introduced "temporary and extraordinary measures to stop the flow of dirt and slander" but was never revoked during the seven decades of Soviet rule. The "full freedom within the limits of responsibility before the court," promised in its text, that would be realized by "a broad and progressive...legislation" has come only with the promulgation of the USSR Law on the Press and Other Mass Media (August 1, 1990) and the Russian Federation Law on Mass Media (February 8, 1992). Although they have been attacked by governmental and local bodies, as well as by parliamentary decrees, serious legal guarantees of media activity in accordance with democratic principles have been created.

Freedom of mass information as fixed in Russian law means unlimited (except by existing legislation) freedom to seek, obtain, produce, and disseminate information; to found mass media outlets, and to own, use, and manage them; and to prepare, acquire, and operate technical devices and equipment, raw goods, and materials intended for the production and distribution of mass media products. The Russian law reinforces inadmissibility of censorship, originally proclaimed in Article 1 of the Law of the USSR on the Press and Other Mass Media (USSR Press Law).

Another noteworthy legal act is the Law of the Russian Federation of March 21, 1991, that introduced specific administrative and criminal penalties for creating obstacles to the professional activity of journalists and for other violations of the mass media legislation. Its concretely defined punishments are of serious importance in the context of the cacophony of laws, decrees, and regulations coming from all possible sources, aggravated by a lack of co-ordination between law-making and law-enforcement bodies, which has led to a general decline in the effectiveness of the law. To monitor the practical application of press statutes, a special body, the State Inspectorate to Protect the Freedom of the Press and Mass Information, was created in September of 1991 with the mandate to petition government, founders, and editors of publications, as well as TV and radio stations, when violations of the law are registered. It can also file a court suit to close a media organization. The new Russian Constitution adopted by national referendum of December 12, 1993 is the latest and probably the most important act that guarantees freedom of press and speech. Confirming the ban on censorship it states (in Article 29) that "[e]veryone has the right to freely seek, obtain, transmit, produce and disseminate information by any legal method."

The fall of the central press

Until about 1990, newspapers in the USSR had a stable pyramidal structure. On top was the so-called "central press": Moscow-based, nationally distributed newspapers and magazines that presented the official policy of the Communist Party, the government, and different central bodies, both state and public. Although in 1990 the central press comprised just 3% of the total number of newspapers, their circulation was 73% of the total.

Paramount in the central press were Pravda (Truth), the daily newspaper of the Communist Party's Central Committee, and Izvestia (News), the Supreme Soviet's (parliament's) paper. The Central Committee also published magazines and newspapers on communist theory and practice, as well as on industry, agriculture, culture, international affairs, and so forth. Leadership of the Young Communist League (Komsomol) had Komsomolskaya pravda (Young Communists' Truth) that dealt with youth affairs. The Trade Unions' Central Council ran Trud (Labor) for worker collectives; the Board of the Writers' Union had Literaturnaya gazeta (Literary Gazette) for the intelligentsia; the Union of Movie Workers published Sovetsky ekran (Soviet Screen) magazine for movie fans; while the State Sports Committee had Sovetsky sport (Soviet Sport) daily for sports fans; and so on.

Below the national level this scheme was repeated in the capitals of the Soviet republics, with newspapers and magazines of the same character as those published in Moscow, and in many cases bearing similar names. Although there was no overt subordination of these publications to the central publications, direct command links between the bodies governing them presupposed some kind of master-servant relationship.

Inside the republics, the system was reproduced again at the regional level, where to cut production costs the party and Soviet bodies usually merged their efforts to run joint publications; then, once more, at the municipal level, and, again, at the district level in the countryside, at industrial enterprises, and so forth. Although the tip of the pyramid was small in the number of newspapers, the national publications were the most popular in the country. These newspapers were of very similar content, often with the same "opinions" and editorials that not only explained the party view on political issues but also served, in the best Leninist tradition, as a "collective propagandist, collective agitator, and collective organizer." Magazines had some liberties as a "second-class press"; therefore they could vary in their style and ratio of propaganda to entertainment stories.

From 1986 to 1988 Mikhail Gorbachev installed as editors people loyal to his policies, so the central press became instrumental to promoting his reforms. As they were read everywhere, the national publications could be used to appeal directly to the people over the heads of the opposition. Their letters-to-the-editor sections presented a ready-made way of allowing people to participate in perestroika. And the prestige and freedoms granted to the journalists by the Kremlin made them its natural allies.

Then came events unexpected by the bureaucracy. The USSR Law on the Press and Other Mass Media demanded that all publications be officially registered with state bodies. In fact, this procedure let the editorial staffs look for and register "founders" that could be different from their old masters, or even register the newspapers as their own. This practice created the first practical threat to the pyramid by taking newly independent outlets out of their old lines of subordination. At the same time, the periphery had started to be filled by publications launched by enterprising editors and the newly rich.

The next blow occurred in August of 1991 with the ban on the Communist Party and nationalization of its property. This gave birth to thousands of re-registered publications. Some of the ex-communist papers, mainly provincial ones, took different names (such words as "kommunist," "pravda," and "sovetsky" went out of fashion); others took a different editorial line as well, while all of them broke free from the master, as the governing party had ceased to exist as the dominant structure. With the removal of the unifying pivot, the whole system of central-local press collapsed: the party mechanism that supported it was gone.

In some cases the state tried to imitate the old system by creating a similar structure of governmental and Soviet press in Moscow and in the republics, but in an atmosphere of greater autonomy of local administrations and a lack of political levers (and, to some extent, the political will) to execute the pressure, it did not succeed. True, economic levers in the form of subsidies are still in the hands of the state, but their impact is worthy of special discussion below.

On the surface, the pyramid still seems to be in place, but inside the puppet-strings are truly gone. Nobody views the national Moscow-based papers as a central press, or looks for propagandist trends and organizational instructions in its pages. With public interest shifted to community issues, the local press appears to have become the most stable part of a shattered structure.

Local press: Sources of stability

a.

Subscription only.

b.

First half of year.

c.

Second half of year.

The years 1989 and 1990 were the peak of popularity for the mass media in the years following the start of perestroika (see Table 1). That was the time of the highest political expectations of the population: sessions of the Congress of Peoples' Deputies were watched live on television and listened to on radio with such intense attention that a sharp fall in industrial production figures was registered during those days. In a way, that was a time of "intoxication" with Glasnost. The next three years have brought a growing distrust of the media against a backdrop of general political apathy and severe economic crises. The latter is a factor which has led many families to abandon their traditional subscriptions to five or six publications and limit themselves to just one. The media are no longer viewed by the population as a source of help and hope, or a channel to express their opinions.

In 1988 a tendency to prefer local press to the central one started to emerge. Initially, it became visible in those Union republics where the "national idea" was dominating people's minds. With increasing independence from Moscow, the demand for nationalist stories has given way to interest in local news, practical information, entertainment, and stories of day-to-day life. Polls say that concern for world affairs or national politics has dropped dramatically in the past couple of years. The majority of Russians first and foremost want to read about such issues as the cost of living and crime--in other words, exactly what the local press provides. Among the least popular topics are ethnic issues, life in other republics of the former USSR, and foreign policy--all prominent in the national press.

This has resulted in a relative stability of the circulation level of local publications. During the subscription campaign for the second half of 1993, local newspapers managed to preserve 84% of their readers and magazines 100%; meanwhile, national newspapers kept 63% of their subscribers and magazines just 66%. Overall, in 1993 the combined print runs of the local press exceeded those of the Russian national publications, although to a large extent this is attributed to the high popularity of cheap or free tabloids containing classified ads and TV listings. Another reason for the stability of the local press, a purely economic one, is their comparatively low distribution costs.

Who owns the press?

As was stated above, the press in the USSR was owned by the Soviets, the state apparatus, and public organizations (all controlled by the Communist Party), or by the party directly, or by a combination of these three institutions. With the collapse of communist rule, the Soviets and state bodies have become the major owners, especially at the local level. Between themselves they have or share (usually with the journalists) ownership of 2,140 out of a total of 12,000 publications.

Party non-communist press as such is an infant in Russia, mostly due to the infancy of the political parties, which have emerged legally only since 1990. Its popularity is low, and we do not witness any signs of growing circulation. In 1993 there were some 200 party papers, 12 of them published in Moscow and 18 in St. Petersburg. Most of the parties succeed in publishing just a few issues of their newspapers or newsletters before publication eventually lapses. In the present climate of political apathy and distrust for politicians of all colours (except for a few popular figures who usually are not associated with a party cause), it is hard to expect a growth or stability of the political parties' press.

A rough evaluation of the ownership structure of the Russian press suggests that 29% of national newspapers are federally owned, 30% belong to public organizations and parties, and 41% are private; 21% of regional newspapers are federally owned, while 22% are private; as to the municipal press, 85% of it is municipally owned, the rest being private and public. Of all new papers registered in Russia in 1993, 57.1% were private property, 23.1% belonged to the state (5.8% being municipal property), and 19.8% were owned by public organizations and political parties (Bekker & Gurevich, 1993). There were no private chains of newspapers or even plans to set them up. Commercial companies and banks are more active in the sphere of broadcasting, although one of them, the Most (Bridge) firm, alongside a major broadcasting company, NTV, runs the popular Segodnia (Today) newspaper and should be watched as a potentially large owner of Russian media.

A prescription to survive

About 1991, the press changed from a major profit-maker for the Communist Party and the state to become a source of serious financial losses. Moreover, the larger the print run a publication had, the heavier was the financial loss inflicted. The explanation for this lies in skyrocketing printing and newsprint costs, and distribution rates, while subscription fees set and paid several months in advance could not cover the unpredictably increased expenses: the newspapers were losing money with every additional copy printed. That year taught a good lesson to the editors. Cautious of the inflation rate, they now allow subscriptions to be paid only six months in advance (in Ukraine it is only three months). Pocketbook considerations have made the managers of the publications become serious about the deficit by looking for alternative distribution schemes, better deals with paper producers and printers, cuts in the number of foreign and national correspondents, sublets of their office space, and so forth.

At present, the breakdown of production expenses is typically the following: distribution (32%), printing (21%), newsprint (20%), salary and honoraria (12%), office rent, transportation, repairs, stationery, and so forth (11%), wire services (4%) (Stepan Kiselev, Deputy Chief Editor of Moskovskie novosti, personal communication, June 23, 1993). (These data concern Moskovskie novosti [Moscow News] with 240 editorial workers--60 of them journalists--but the percentages are similar to those of other publications.)

Of the more typical sources of income, advertising makes up the biggest share of revenues for major publications. At Argumenty i fakty, for example, advertising income covers 70% of all expenses of the newspaper. At Moskovskie novosti, 60% of revenues come from ads, while 37% more are brought in by subscriptions, and the remaining 3% come from street sales (Stepan Kiselev, Deputy Chief Editor of Moskovskie novosti, personal communication, June 23, 1993). They have also started to look for ways to earn money on the side. Let us examine some examples.

Argumenty i fakty (Arguments and Facts) weekly, has invested its capital, gained at the end of the 1980s, into the construction of brick-producing factories, book publishing, and a telecommunications business in the city of Nizhny Novgorod; it has also started to deal in shares and securities.

Pravda has combined its dwindling resources with those of a Greek communist businessman to create a joint-stock company, Pravda International.

Moskovsky komsomolets (Moscow Komsomol Member) has created several trade companies with stores of their own, and has begun to provide high interest loans to different businesses.

Kommersant (Businessman) publishes its weekly version in English, distributed for hard currency in the United States and among the foreign community inside Russia.

Nezavisimaya gazeta (Independent Newspaper), alongside Kommersant, is one of the few Russian publications which still has an English version on sale in the West. This edition maintains a circulation of approximately 40,000 sold for about $2 a copy (read mainly by intellectuals and university professors), which brings in much-needed foreign currency. It also runs an advertising agency, RENEZA, that offers to Russian companies an opportunity to place their ads in The Washington Times for rubles, and NEGA news service, comprised of Nezavisimaya's correspondents and stringers in the ex-USSR.

Ogoniok (Little Flame), the most popular weekly magazine of the Glasnost era, has launched The Echo, the first Russian-British newspaper, run together with a French-British publication L'Echo. This commercial venture, dedicated to the spread of the English language among Russians as "a guarantee of a real freedom and success in the West," is designed to back with its profits the maternal magazine.

Izvestia was among the first publications to do business with a Western press company. Since 1989 it has co-run with German publisher Burda Verlag an advertising agency, Burda-Izvestia; at that time a special Politburo decision was necessary to start such an extraordinary enterprise. Together with The Financial Times of London, Izvestia runs Finansovye izvestia (Financial News) weekly, sharing profits from the ads that foreign firms place in it. Advertisements seem to be a major source of revenue for Izvestia; they occupy up to 25% of its pages.

Komsomolskaya pravda has gone even further: it gives up to 43% of its space to advertisements. Its innovation (followed by Argumenty i fakty, Pravda, and others) though, lies in the practice of putting local ads into its editions published in various Russian cities and provinces, as well as in Ukraine, Belarus, and Kazakhstan. This way the newspaper attracts local advertisers interested in the targeted audience. By adding local news, television listings, and weather forecasts to these editions, Komsomolskaya pravda gains a significant portion of subscribers who thus get a central and a local paper in one.

This list could be extended, but what I see is that there is no single prescription for survival. Some of the examples are good, others are not so good, while all of them permit presses of different and opposite views to stay afloat on the dwindling information market (as seen by the fall in circulation, Table 1), letting the audience choose among many sources of news and opinion. It is surprising that none of the major publications has shut down during the last few years. For the overall majority of newspapers and magazines the reason lies in the fact that they receive government subsidies. Some provincial presses have no business opportunities to pursue and so have no choice but to request government subsidies. Others do not care to pursue business opportunities while subsidies underwrite their bills and do not want to risk losing the subsidies they currently receive.

State subsidies

The issue of subsidies presents the most complex and delicate aspect of the relationship between the state and mass media in Russia. On the one hand, financial reliance of the press on the state gives serious grounds to question the political independence of the media, their objectivity, and balance of reporting. On the other hand, some say that the press and broadcasting, if viewed not just as a political instrument or a commercial enterprise, but as an institution for the cultural and educational benefit of the population, should be able to enjoy the patronage of the state.

From about 1991 distribution of the allocated monies became the main preoccupation of the Russian Ministry of Press and Information, and its first head, Mikhail Poltoranin. Ideally, priority was given to papers for children and youth, disabled persons, national minorities, and literary and cultural magazines. At the same time, by separate decisions of the government, huge donations were given to the mass circulation newspapers that were working for the so-called "common information space" in the former Soviet Union, namely, Trud and Komsomolskaya pravda. Among the criteria for singling out these two publications was the personal preference of President Boris Yeltsin.

Just a few publications, Moskovskie novosti, Kommersant, and Kuranty among them, have from the beginning categorically rejected any state help on the grounds that "the free press must save itself by its own means" (Kommersant, June 11-18, 1992), while most have accepted it, viewing themselves as "an indispensable informational and psychological support weapon of the reforms" (Trud, January 21, 1992). Faced with a wave of open and covert cries for help, the authorities have entered a wide field in which to manoeuvre. The government was quick to learn that economic pressure provides as effective a tool for control over editorial policies as did the ideological and political dictate exercised by the communists. (A source says that Komsomolskaya pravda, for example, was "mildly" forced in early 1993 to abandon its year-long practice of monthly front-page interviews with Mikhail Gorbachev by a call from the Ministry of Press and Information.) From the beginning, Poltoranin did not hesitate publicly to limit the sphere of state protectionism and material support only to the publications "that work for a rebirth of Russia."

During the brief tenure of Dr. Mikhail Fedotov (who incidentally was one of the authors of the USSR and Russian media laws) as the Minister of Press and Information (December 1992-August 1993), a transformation of Poltoranin's policy of subsidies was initiated. To begin with, Fedotov declared that the budget money would not be given to publications subsidized by private businesses or foreign capital, press digests, religious or commercial newspapers, bulletins of advertisements, or the erotic press. Regarding the local press, the Ministry planned to support just one publication in every area, and that would be the most "important and popular newspaper" of the territory. Preference was to be given in accordance with a petition by the provincial governor and after an accord of the municipal or regional Soviet. The money was to be allocated once for the whole year with an advice to secure it by purchasing shares of a printing shop, or by putting it into a local bank. "Thus, the necessity of subsidies will disappear in one or two years....All other local publications must exist by the rules of the market and either be unprofitable or profitable depending on their concept, professionalism, and the financial efficiency of their leaders," outlined a Fedotov report (Ministry of Press and Information, 1993).

Other conditions were implied for those who might be the recipients of budgetary infusions. A publication was required to undergo an audit that might result in compulsory recommendations to cut staff, lease a portion of its editorial offices, and so forth. Only after execution of the advice would a petition for the money be granted. According to estimates, only some 200 publications would in the end be granted subsidies under these severe terms.

Vladimir Shumeiko, who became the Press Minister in October of 1993, promised to put an end to federal subsidies by the end of 1994. It does not appear, though, that he will be able to implement this decision, since the President's Decree of December 22, 1993, orders the dissolution of the Ministry by February 15, 1994. Whether the newly created Committee on the Press, directly controlled by the President himself, will pursue Shumeiko's goal remains doubtful.

The exact figures of subsidies are inconsistent. For one thing, they are being constantly reviewed to take into account the current inflation of just under 1% per day. Moreover, different governmental functionaries provide different figures. Also, the recipient publications prefer to understate the figures, or to say that they cannot get the allocated sums, while their competitors tend to inflate them. For example, the original sum allocated in 1992 for Izvestia was 55 million rubles, but according to its rival Rossiyskaya gazeta (March 24, 1993) it received 858 million rubles that year.

Federal subsidies, that started at several dozen million rubles in 1991, continued on a much larger scale in 1992, and were spread among at least 300 publications, 42 of them local. A report based on data from the Ministry of Press and Information and presented for parliamentary hearings on state policy in the sphere of mass information in the summer of 1992 said that 80% of the subsidies were coming from the federal budget, while the remaining 20% were to be taken from local administration sources. The 1992 figure of total subsidies from the national budget was to comprise 5.11 billion rubles, but the projected inflation was expected to increase it to some 9.553 billion rubles. The informative Moskovskie novosti (July 12, 1992) reported that in fact 12.318 billion rubles were allocated for "more than three hundred" publications in 1992, 85% of the sum coming from the federal budget, and 15% from local budgets.

Other figures for 1992--eight billion rubles for 501 publications--are quoted in a ministerial memorandum prepared a posteriori in early 1993 (Ministry of Press and Information, 1993), while the same Ministry's Department for Mass Media in yet another memo spoke of nine billion rubles allocated to 400 newspapers from the federal budget. Thus, in sum, the actual figures for 1992 are very difficult to determine.

As to the figures for 1993, the federal draft budget prepared by the government in March (never approved by the legislature dissolved in September but finally enacted by presidential decree immediately after the disbanding of parliament) envisaged federal subsidies for the press in the amount of 11-12 billion rubles (Bekker & Gurevich, 1993), although as much as 54 billion rubles were requested by the Press Ministry to keep the print media afloat. During 1993, though with a heavy emphasis on its last two quarters, the Ministry of Finance did provide 24.580 billion rubles (which almost equals the original sum, taking into account the inflation rate) distributed among some 600 publications. In comparison, subsidies to state television in the same year totalled more than 100 billion rubles (about U.S. $90 million).

The Russian government's current policy does not decrease the doubts regarding the desirability of direct state subsidies to the press. More appropriate, as almost everyone from editors to the Minister agree, would be the following types of governmental action:

(a)

unlocking of hard currency accounts of newspapers in the state Vnesheconombank (locked there along with other business and private accounts in 1990 due to the shortage of hard currency);

(b)

provision of tax benefits and favourable loans to the press;

(c)

provision of privileged tariffs for the use of telecommunications and postal services;

(d)

provision of privileges in lease holdings;

(e)

denationalization and demonopolization of newsprint production, printing, and distribution industries.

Any of these privileges could only be uniform and provided automatically to all publications. This seems to be the only way to save the independence of the journalists while they receive governmental support. Although the late Supreme Soviet and the executive branch both paid lip service to the idea of uniform and automatic privileges for the press as a way to avoid direct subsidies, they at present have different reasons for the failure to implement it (usually just blaming each other).

Hypothetically, dependence of the media on subsidies could backfire on the government itself if the press's appetite for budgetary injections is not satisfied. Then the "fourth estate" would support political opposition and try to bring to power an administration more amenable to its demands. Hints to this effect were made recently, once during a meeting between President Yeltsin and media leaders in August of 1993, again in a joint press release by Russian journalists' unions in October 1993, and, finally, in a press conference of editors in January 1994.

Stop the presses?

Printing plants in Russia might be compared with museums of newspaper and book production technology, judging by the obsolete equipment used. The technical level of the machinery manufactured in the country for the industry is 50 years behind that of the Western world. Colour printing of newspapers and electronic layout are still a novelty for Russian publications. Even this outdated equipment cannot satisfy the demand, due to a shortfall of production that reached 42% in late 1980s. Half of the types of equipment need to be imported, and there are never enough dollars for that.

Most of the best printing plants belong to the state, but they work on a self-accounting basis. Newsprint is purchased by publications directly from paper mills, but inks and other materials are the responsibility of the factory that strikes a deal with the editors on the cost and the terms of the service. After payment of taxes and other bills, revenues are spent by the factory without state intervention. In most cases, the printing houses and the periodicals do not have common owners, nor do they own one another. While the newspapers are interested in maintaining good relations with the printers, the latter can always switch to producing other printed materials: flyers, booklets, and so forth. Therefore, it is common for editors to receive only a one-week advance notice informing them of a sharp increase in costs for printing services.

The fall in circulation figures has inflicted a blow on the printers as well, since it is easier to produce, for example, one million copies of one newspaper than a hundred thousand of copies of each of 10 papers.

Paper mills: No more a monopoly

The state of the paper producing plants is even worse than that of the printing shops. Six out of every 10 plants have been in operation since the turn of the century. Sixty-five percent of the equipment still used has exceeded its expected productive life; some of it was installed as part of reparations paid by Germany after World War II and was manufactured as early as 1928. With the largest forests in the world, Russia produces six times less cellulose and eight times less paper than the United States. Until recently, the state supported the price of newsprint. Then the prices became "liberated" (see Table 2). This has reversed the situation in the newsprint market from a very high demand to a very low one. The customers of paper producing factories do not want to and cannot afford to pay huge sums of money because of bad economic conditions among the populace and a general fall of interest in the printed word. This situation has led the mills to sell as much newsprint as possible abroad for dollars, while the government, inspired by the press, has started to raise obstacles on this road to easy profits. In 1993, Russia turned out one million tons of newsprint compared to 1.8 in 1988. The biggest paper mills in Russia--Kondopoga, Solikamsk (both state-owned), and Balakhna (a stock company)--do compete these days to attract orders from different publications. As a result, the hike in newsprint prices is modest compared with that for the distribution and publishing services.

Distribution system: On the road to collapse

National distribution of the press in Russia is a monopoly. It belongs to Rospechat (Russia-Press), a semi-independent agency under the Ministry of Communication. Its predecessor in USSR times, Soyuzpechat (Union-Press), had at the peak of its activity in the 1980s 833 small shops, 37,700 newsstands and kiosks, and 9,900 newspaper vending machines to sell publications in the Soviet Union. It has been selling and providing subscriptions to almost every newspaper, magazine, and journal (earlier on a basis of once-per-year and, since 1992, twice-per-year campaigns), using its branches in every district of the country and every post office nation-wide (about 47,000 in 1993). (In Russia, 90% of periodicals are distributed through subscription.) Rospechat is also a major publisher of catalogues of publications. Naturally, it has profound expertise, advanced computing machinery, and facilities to do its business. As a monopoly, the agency dictates the sum taken from the publications for distribution both by subscription and street sales. This commission amounted to 73% of the selling price of a publication for the second half of 1993, having risen from 52% in the first half of that year and from 20% just a couple of years ago. The cost of the press for subscribers in 1993 had grown 26.5 times compared to the end of 1992, or 90 times compared to 1991. According to Obshchaya gazeta (Common Newspaper) (July 9-16, 1993), the dynamics of the subscription rates in 1993 outstrip those of per capita income, minimum wage, exchange rate, and other economic indicators.

Editors vigorously protest against such "robbery" by petitioning the government with requests to tamper with the agency, or to underwrite the publications' expenses. In rare cases they try to establish distribution companies of their own. Although at the local level some publications do succeed in street sales and subscriptions, at the national level they do not have the resources even to start such a business. And there is no wonder, since a calculation of the sum necessary to create an alternative agency, done in the summer of summer 1991, totalled 11 billion rubles (or about U.S.$400 million at the then rate of exchange).

When called upon to respond, Rospechat explains the high tariffs for its services by increased (by thousands of times) rent for its branch premises, transportation costs, electricity bills, and so forth. The just argument here is that Rospechat, viewed by the state bodies as an ordinary business enterprise, pays for all its services at the same tariffs as, for example, a profitable restaurant or a hotel for foreign tourists.

So, who will lose less in this deadlock situation? We see hope for three categories of publications. They are:

(a)

small-scale local (mainly municipal) newspapers that are not engaged in wide distribution schemes, or can develop their own tiny agencies;

(b)

large newspaper companies that are able to attract nation-wide (ex-USSR) readership and can recover the losses involved by making profits in other spheres of the economy, by selling their pages to foreign advertisers, by means of joint ventures with foreign companies, or by successfully selling their editions abroad;

(c)

governmental, parliamentary, or local administration publications that can always survive with the help of budgetary money.

Traditionally, postal services have been a low (10-25%) profit business. These days this service does not bring any surplus revenues at all. In 1993, the actual cost of delivery of a letter was 14 times the cost of the stamp. Delivery of a newspaper, paid by the subscriber, hardly covered the expenses of the agency. The losses of the Moscow regional post office reached 100 million rubles from November 1992 to April 1993 (Izvestia, May 15, 1993). Such losses used to be balanced by profits from telecommunications services, but, by presidential decree, since 1993 these services are independent of the post office. Another source of profits used to be delivery of pensions (the service charge here is 4%), but today pensioners prefer to collect the money by themselves, without the middleman. Thus, these new developments have put the postal services on the brink of a catastrophe. Rospechat is in crisis. The increased price of publications sharply decreases sales figures. The number of newsstands in Moscow alone has fallen from 817 in 1992 to about 200 in 1993. Gone are vending machines selling newspapers (they disappeared since there was no coin in Russia that could buy even the cheapest one). The press is becoming a kind of product that not many people care to produce, sell, or buy.

News agencies

Until the early 1990s the system of news agencies in the USSR consisted of TASS (Telegraph Agency of the Soviet Union) with its 14 subsidiaries in the Union republics, and Novosti Press Agency. Today, Russia alone has 400 news agencies. TASS, with the collapse of the USSR, became the Information Telegraph Agency of Russia, ITAR-TASS, keeping the TASS abbreviation as a familiar trademark only. For decades following its 1925 founding, TASS was under the jurisdiction of the Council of Ministers of the USSR, later under the USSR President, who appointed in 1991 his former press-secretary Vitaly Ignatenko as its present Director General. At its peak in the mid-1980s, TASS had bureaus and correspondents in 110 foreign countries (nowadays in just 75 countries), being the main information source for the Soviet people on life abroad and on domestic affairs; it was one of the "Big Five" world agencies. At that time TASS had a staff of almost 5,000 workers, one-fifth of them journalists.

These days the financial deficit has led ITAR-TASS to cut its workforce to about 3,500, of which 900 are journalists, including 115 working abroad. ITAR has three regional branches, in St. Petersburg, Vladivostok, and Khabarovsk, as well as numerous bureaus all over Russia and the republics of the former Soviet Union. It has 120 clients in foreign countries and sells its services to every state TV and radio company and to the majority of national and regional publications inside Russia. It is still the semi-official outlet used by the Russian government to make its views known to the world public, as well as to distribute official documents.

Before 1991 Novosti, created as a public company in 1961 to "sell" the Soviet Union to foreign countries, published propaganda magazines (as many as 29 monthlies, 7 bi-weeklies, and 10 weeklies), brochures, and books in 34 foreign languages for distribution in 125 countries of the world. Then, in July of 1990, Boris Yeltsin, the new chairman of Russia's legislature, suggested that Novosti be put under the control of the republican parliament and re-organized as a champion of liberal forces. In response, President Mikhail Gorbachev initiated a series of transformations of the agency, putting it under different jurisdictions, splitting it, merging it with other media outlets, and so forth. The agency has also suffered from the closure of most of its bureaus abroad, including those in the former Soviet republics, that was forced on it by economic and political factors. At present, what is left of it is called Russian Information Agency (RIA) Novosti, which is under the direct control of the Kremlin. RIA now provides more news on business affairs, entertainment, arts, culture, and sports. However, these attempts to break from old stereotypes of a propaganda outlet have not prevented a substantial loss in the number of subscribers. There seems to be a long way to go before RIA will be able to beat TASS, its only state competitor.

The obvious leader among the non-state agencies is Interfax. Founded in September of 1989 as a faxed bulletin of Moscow Radio and Interkvadro, a Soviet-French-Italian joint venture, Interfax was re-registered as a news agency after the breakup of the international venture in October of 1990. Now it is a stock company of a closed type chaired and directed by Mikhail Komissar, a former radio correspondent and an engineer by education. Although on the surface Interfax is known for its political news and scoops, most valued is its business and economic information distributed in Russian and English. At present, it runs 21 periodical bulletins of general and business news with a staff of 220 employees (60 to 80 of whom are journalists) at its Moscow headquarters and 200 more elsewhere in the former Soviet Union. With some 60 foreign subscribers, it has expanded and has business affiliates in London (Interfax-Europe), Denver, Colorado (Interfax-USA), as well as news affiliates Interfax-Ukraine in Kiev and Baltfax (a joint company with the Baltic News Service) in Tallinn. Among the immediate plans of the agency are opening of affiliates Interfax-Asia in Almaty and Tashkent, Interfax-Siberia in Novosibirsk, Interfax-Far East in Vladivostok, and Interfax-Belarus in Minsk.

Most of the new wire services are non-state, their common peculiar feature being an almost total dependence on Western subscribers due to the inflated exchange rate of the hard currency: even a small fee paid in dollars lets them cover expenses and gain strength. Until the end of the 1980s there were no provincial news agencies in Russia. Now they appear and die at a high frequency, although some are well established: Severo-zapad (North-West) in St. Petersburg, Ural-accept in Yekaterinburg, and Sibinform in Novosibirsk. Usually created by a group of newsmen from a local paper, they try to serve the world with information from their regions. If theirs is a conflict area, they have a chance to survive despite strong competition from Moscow-based special correspondents. Otherwise, it is hard for them to find clients rich enough to pay for the services. Among the obstacles to the growth of provincial news agencies are bad communication lines with the outside world; a demand for "packaged information," not just news from Nagorno-Karabakh or Abkhazia; and lack of expertise or trustworthiness on their side. What we might witness in the future will be the birth and strengthening of local state administrations' news agencies, viewed by the parliaments and governments of the formerly autonomous republics as an essential element of their growing sovereignty.
In the last years of the 1980s the Russian press gained a level of freedom unprecedented in its almost three-centuries-long history; some analysts even call the perestroika years its "golden age" (Tolz, 1992). But, since 1990, circumstances for the print media have worsened owing to economic pressure and their growing dependence on government subsidies. By now, only a handful of publications have obtained financial independence from the state or politically biased groups that view them (in the old tradition of the country) as their pipelines to the public and as tools of political control. The task of constructing and strengthening democratic society, a prerequisite of their real and lasting freedom, is more responsible and consequential than that of overturning the communist machine. This goal seems to create the biggest challenge for Russian journalists. With 59% of the population still reading newspapers every day (compared with 61% listening to the radio and 86% watching TV) their target is within reach. Time will tell whether we shall still be as proud of our press in a year or two as we were in that era.

References

Bekker, Aleksandr, & Gurevich, Vladimir. (1993). Newspapers of Russia: Ways of supporting market reforms. Paper presented at the World Bank Seminar on Future Projects to Assist Reforms in Russia with the Use of Mass Media, Moscow.

Ministry of Press and Information. (1993). Materialy k vystupleniyu ministra pechati i informatsii RF M. A. Fedotova na sessii Verkhovnogo Soveta Rossiyskoi Federatsii (Rossii) (Materials for the report of Minister of Press and Information of RF M. A. Fedotov at the session of the Supreme Soviet of Russian Federation [Russia]). Memorandum. Moscow.

Tolz, Vera. (1992). Russia. RFE/RL Research Report, 1(39), 4-9.