MTV BEGINS TELECASTS IN TWO MARKETS IN RUSSIA MUSIC VIDEO CABLE CHANNEL UNDETERRED BY ECONOMIC CRISIS

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[moscow] The lavish launch party for 4,000 people at Manezh, an exhibition hall hard by the Kremlin, was canceled. But the shows still went on.

Without fanfare, MTV Russia began airing Sept. 26 in this economically ravaged country where advertising has virtually ceased as marketers make draconian cuts in their budgets.

LAUNCH IN 2 MARKETS

Initially, some 15 million households in Moscow and St. Petersburg will get the music video channel, and there are expansion plans for next year.

"We have tremendous faith in the long run," said Bill Roedy, president of MTV Networks International and chairman of MTV Networks Europe. Besides, he added, "MTV traditionally swims against the tide."

Advertisers usually flock to MTV in other countries (it's available in 85). But in Russia, many have been forced to hold back commitments.

"We started talks before the crisis" about buying ads, "but after the crisis started, the situation changed," said Stanislav Cherkasov, communications manager for Stimorol M. Ltd. Owned by Copenhagen-based Dandy, Stimorol markets chewing gum brands Stimorol and Dirol in Russia.

"This is our target group," said Yelena Metelyova, commercial representative for Levi Strauss & Co. in Moscow. But the jeans marketer is holding back. "In the next year, we will be ready to examine offers [to advertise]," she said.

MTV Russia's rate card averages $500 for a 60-second spot, although :15s and :30s are more common. While that rate covers only two markets, rate cards in Russia are very flexible.

NO PROFITS FOR SEVERAL YEARS

MTV Russia executives do not expect profits for several years. The channel is a joint venture between MTV Networks and media company Biz Enterprises, which has been trying to bring the music channel to Russia for almost a decade.

"We thought about this for a long time and made the decision that we are definitely going ahead with the launch of the channel," said Biz Enterprises owner Boris Zosimov.

MTV Russia started its 21-hour-a-day broadcasts by showing a concert given in Moscow last year by British rave group Prodigy. That was followed by an episode of "Beavis & Butt-head."

Locally produced shows are also part of the programming mix.

At a recent press conference to announce the launch of MTV Russia, Pepsi-Cola International was trotted out as an initial sponsor. A Pepsi spokeswoman declined to quantify Pepsi's spending with the channel.

"We are talking to the rest of the advertising market," said Boris Kaz, MTV Russia's president. Mr. Kaz cited Stimorol and Sony Corp. as potential advertisers.

AN OPTIMISTIC OUTLOOK

Despite the troubles, MTV Russia executives are trying to keep an optimistic outlook. Andrei Afanasyev, public relations manager for the channel, said the launch party was postponed, not canceled.

The festivities will take place maybe later this year, maybe next year, he said.

The situation in Russia is "undoubtedly worrying," Mr. Afanasyev said. "But we are hoping that in the near future, the situation will stabilize."

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