3 Min Read
LOS ANGELES (Reuters) - The Walt Disney Co and Media-One Holdings Ltd on Tuesday unveiled plans to launch a nationwide, free-to-air television channel in Russia in 2009, populated by Disney Channel and locally produced programing.
Disney will take a 49 percent stake in the joint venture and provide cash and programing as well as expertise in content acquisition and marketing to kids and families.
The company would not comment on the size of its investment in the joint venture, or the length of the deal.
Media-One, the majority stakeholder, brings to the table 30 owned and operated TV stations throughout Russia, as well as knowledge of the Russian market and regulatory environment.
The deal still must receive regulatory approval from Russia, which requires foreign investors to have Russian partners. Russia's regulatory environment for TV is seen as similar to that of western European countries.
Disney already operates local retail, licensing, theatrical distribution, mobile and Internet businesses in Russia.
Andy Bird, chairman of Walt Disney International, said on Tuesday that its newest Disney Channel would reach 75 percent of a Russian population that was already "extremely familiar" with the company's fairy tales and products.
Disney opted for a free-to-air strategy in Russia to get the broadest reach possible because paid cable and satellite TV subscription is "very limited," he said.
The joint venture has room to expand its coverage through acquisitions of more TV stations to carry the new channel. "That's something the venture would look at," he said.
Disney operates 30 Disney Channels worldwide, mainly on cable and other forms of pay TV, and sees them as crucial to familiarizing international consumers with its theme parks, movies and consumer products.
The company has moved aggressively to establish TV presences in developing markets, including China, India and Eastern Europe since Chief Executive Robert Iger took over in 2005 and made international expansion a priority.
Disney also has stressed locally made programing based on culturally relevant stories, recently partnering with Indian creative partners on children's TV and an animated film, and with Russian and Chinese partners on features films.
The Russian economy is expected to buck the global economic downturn in 2009, leading Disney to "a certain amount of optimism" that "there is still a lot of room to grow" its locally operated business, Bird said. (Reporting by Gina Keating)