The Interview – Prof-Media CEO Rafael Akopov

Michael Hedges January 26, 2007

“You’re living in exciting times. So move faster!”

Since its formation in 1997 Prof-Media has become one of Russia’s largest and most diversified media holding companies. In the last year the company’s significant investments included national network TV3 and “2x2”  - for more than €400 million - and multi-media entertainment portal Rambler Media. At the same time Prof-Media began withdrawing from national newspapers, selling stakes in Izvestia and, not quite final, Komsomolskava Pravda. The company continues to hold magazine publisher Afisha and business-to-business publisher B2B Media. Rounding out its media compliment, Prof-Media owns controlling interest in Central Partnership, Russia’s leading film production and distribution company, a nationwide chain of cinema multiplexes under the Cinema Park brand and several Moscow and St. Petersburg radio stations, including the Avtoradio brand.

Prof-Media reported consolidated 2005 turnover over US$240 million.

Rafael Akopov became Prof-Media CEO in 2004 and a member of the Interros board in 2003. Between 2001 and 2003 he was deputy CEO at NTV and a board member at Gazprom Media. He holds law degrees from Lomonosov Moscow State University and the University of Dundee, Scotland.

He answered questions put to him by ftm in an email conversation January 24, 2007.

ftm - By any measure, media and advertising growth in Russia is among the highest in the world. As CEO of a rapidly growing media company in a rapidly growing media market, what do you see as the greatest task? And what do you see as the greatest risk?

Russian media has many noted and talented people – from editors, DJs, directors and, now, web-designers. Again, as CEO of a rapidly growing media company, is the talent pool keeping up with your needs? And, where do you find the most talented ones?

Rafael Akopov - The most important task for us as a major media player on this fast growing market is to adjust our asset structure to flourish on the market’s rapid development. The most essential risk lies in the same area: with all that impetuous change and development it’s easy to make a mistake deciding where to go next. You never know for sure which technology or which medium will become the king of the hill next decade. High level of uncertainty in the area of technological development – that is the risk, combined with the severe lack of high-level professionals in new technology and new media. Still, you can gain confidence by developing content production and acquisition as no matter which way it comes to the customer, content is still king, isn’t it?

ftm - Multi-media strategy means different things to different companies. How do you see multi-media integrating with traditional media? I’m thinking specifically about the integration of Rambler TV and the television operations. Looking forward 3 to 5 years, what would be your primary objective for Prof Media? Does the company have further expansion plans, perhaps outside Russia?

Rafael Akopov - We're just completing a major stage in Prof-Media development. We've reshaped the company: from a publisher that worked mostly in the not very well growing newspaper segment to a modern multimedia group focused on entertainment. The next stage is to develop and implement consecutive steps for growing the company's capitalization and to find mechanisms for achieving synergies from our assets. Yet Prof-Media companies have always worked with each other on an arm’s length basis and will continue to. It’s especially important as some of the holding’s assets have their own shareholders except Prof-Media.

We’re eyeing CIS markets as possible territories for further expansion. For example we have quite steady plans for our cinema chain Cinema Park to go abroad, though I’m not ready to name particular countries or dates at the moment.

ftm - How did the TV3 and Rambler TV deals come about?

Rafael Akopov - It’s quite simple. TV advertising comprises nearly a half of Russian ad market, so to become a major player a media company has to operate a nationwide TV-network. At the same time internet is the fastest growing segment of the market around 70% a year. And forecasts indicate that it won’t slow down in the next few years.

ftm - What is the status of Komsomolskaya Pravda and, indeed, the company’s commitment to print media?

Rafael Akopov - We’re negotiating a deal to sell Komsomolskaya Pravda publishing house with its three major newspaper titles. But we’re still in the print business with a b2b publisher B2B-Media and publishing house Afisha focused on entertainment.

ftm - Tell me a little about the advertising business in Russia. Some analysts say, “it’s too hot not to cool down.” What do you say to that?

Rafael Akopov - I expect the growth rates to keep up for at least five years. There are very powerful drivers of that growth such long deferred demand for goods and services including entertainment. Moreover, ad prices, say, CPT on TV are still relatively low in Russia and have enough room for further growth.

ftm - Prof Media is noted as a young, forward-looking media company. What do you tell your young executives and managers about their future in media?

Rafael Akopov - You’re living in exciting times. So move faster!

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