MTG targets Russian pay-TV market with Raduga acquisition

Sweden-based Modern Times Group (MTG) has acquired a 50% stake in Russian DTH pay-TV service provider Raduga TV (Rainbow TV).

MTG has purchased a 50% stake in Raduga Holdings from Russia’s Continental Media for an undisclosed sum. Raduga is the sole owner of DaoGeoCom, which operates Raduga TV.

Raduga TV was launched in February last year and had 70,000 active subscribers at the end of the year, offering a package of over 50 local and international channels including Discovery Channel Russia, Eurosport Russia, National Geographic and Jetix for RUB300 (€7.22) a month.

The Raduga package also includes MTG’s Viasat History, Viasat Explorer, TV1000 Russian Kino, TV1000 East and TV1000 Action East.  Also present are local free-to-air channels CTC, Domashny and DTV, operated by CTC Media, in which MTG has a 39.4% stake.

Raduga TV is delivered via Asia Broadcast Satellite’s ABS-1 at 75° East and is encrypted by Irdeto. ABS-1’s northern beam covers 90% of Russia’s territory and is managed by local satellite operator GeoTelecommunications.

Management control will be shared between MTG’s Viasat Broadcasting business and Continental Media. The company’s results will be proportionally consolidated in MTG’s financials.

The move marks a stepping up of MTG’s attempts to crack the potentially lucrative market for pay-TV in the former Soviet Union, following its launch of a satellite-delivered Viasat pay-TV service in Ukraine last year. Raduga TV is one of five DTH services available in Russia, led by low-cost service Tricolor TV.

MTG president and CEO Hans-Holger Albrecht said, “We are delighted to have forged this strong partnership to develop a competitive pay-TV distribution platform in Europe’s largest market by number of TV households. Our Viasat channels are already well known by subscribers across Russia. We are an integrated TV broadcaster, operating free and pay-TV businesses across multiple markets, and Russia is one of the most attractive pay-TV markets in the world.”