Although finally venturing into TV and the internet, Potanin appears likely to maintain his practice of focusing on profit and avoiding politicized media that could irritate President Putin. Other oligarchs, such as Oleg Deripaska and Alisher Usmanov, are also attempting to create media empires, focusing on potentially profitable electronic media.

In 2006, Potanin began buying entertainment-oriented TV channels, and media said his Prof-Media holding company is now a "serious player in TV" (Biznes, 27 October; TV.net.ua, 30 October). Potanin invested a lot of money, spending almost one 1 billion dollars on TV and internet purchases this year (RBC Daily, Kommersant, 1 November).

- In February, Prof-Media bought the entertainment channel 2x2, which primarily broadcasts in Moscow and Moscow Oblast (Gazeta, 24 October; TV.net.ua, 30 October).

- On 24 October, Prof-Media bought the entertainment channel Rambler TV (Gazeta, 24 October; Lenta.ru, 25 October). Although Rambler TV has only a small audience share and loses money, it has a station in St Petersburg (Gazeta, 24 October). Prof-Media Director Rafael Akopov specifically said Prof-Media was buying Rambler TV to add St Petersburg to 2x2 coverage, making it a channel focusing on the "two capitals" (Grani.ru, Lenta.ru, 25 October). Rambler TV also has a network of 900 stations in 470 cities (Grani.ru, 25 October; Lenta.ru, 30 October; TV.net.ua, 27 October).

- On 29 October, Prof-Media announced it had bought the entertainment channel TV-3, which broadcasts mainly Western films. Observers commented that TV-3 is a "sensible" addition to the other two since it has a strong presence in many regions, owning 23 stations and reaching 65 million people (Vedomosti, 27 October; TV.net.ua, 30 October).

Using these channels, Prof-Media plans to launch a new 2x2 in April 2007 (Gazeta, 24 October), aimed at a specific niche - teenagers and young adults in Moscow, St Petersburg and other cities - rather than trying to compete with the main established channels for the mass audience. A Prof-Media spokesman said it will be an entertainment channel, aimed at 11-34 year-old city dwellers and hoping for a 2 per cent audience share within two years (Lenta.ru, 25 October; TV.net.ua, 26 October).

Moving into internet

In addition to the expansion into TV, Prof-Media is expanding into the internet, the fastest-growing segment of the media.

- A week after buying Rambler TV, Prof-Media bought 54 per cent of Rambler Media, which, in addition to Rambler TV, owns the Rambler.ru search engine and the prominent news website Lenta.ru (Smi.ru, 1 November). Rambler Media had a profit of 2.3m dollars in the first half of 2006, and its search engine, second in popularity in Russia, is the most profitable part of the company (Vedomosti, 25 October; Lenta.ru, 31 October).

- Prof-Media Director Rafael Akopov said this deal "is a key step" in making Prof-Media one of the biggest diversified media holdings and in expanding into the internet (Smi.ru, 1 November).

- Prof-Media bought another website in October, the internet portal Executive.ru (RBC Daily, 1 November). This is a reference service providing information on restaurants, theatres, sporting events, train and plane schedules, weather, addresses and telephone numbers, currency exchange rates and taxis.

Selling print media

While expanding into TV and the internet, Potanin has been selling some of his newspapers, at least the political ones. He long had concentrated on print media, apparently viewing TV as too politically sensitive and likely to spoil his good relations with President Putin.

But his most prominent daily, Izvestiya, got him in trouble when its coverage of the September 2004 Beslan hostage crisis reportedly evoked Putin's ire. Potanin fired the editor, and in June 2005 he sold the paper to Gazprom-Media.

Even though Potanin changed his other most prominent paper - the once-politically daring Komsomolskaya Pravda - into a pro-Kremlin tabloid focusing on sensationalism rather than political reporting, he is currently negotiating to sell it also. Media report that by the end of the year, Prof-Media should complete a deal to sell Gazprom-Media 50.05 per cent of the Komsomolskaya Pravda publishing house (TV.net.ua, 27, 30 October; Biznes, 27 October).

Prof-Media has not sold its profitable non-political papers, however, such as Sovetskiy Sport and the tabloid Ekspress-Gazeta. In fact, Prof-Media recently expanded its entertainment biweekly Afisha (Playbill) - which covers the theatre and films - from just Moscow and St Petersburg to many other cities, boosting its print run from 129,000 to 265,000 (RBC Daily, 2 November).

Media comment on Prof-Media's transformation

Several observers contended that Potanin was changing Prof-Media into a company of electronic and entertainment media, segments of the media that are more profitable and less politically dangerous than the press.

- Video International PR man Anton Charkin said Prof-Media is getting rid of "troublesome" papers and investing instead in entertainment and electronic media (Vedomosti, 1 November).

- Gallup Media rating company official Ruslan Tagiyev said: "In the last two and a half years Prof-Media has radically transformed itself from mainly a newspaper company to a diversified holding company working in the entertainment sphere" (Vedomosti, 27 October).

- The daily Kommersant cited experts saying Prof-Media's strategy is to change its portfolio from traditional media to electronic media, since the internet is the "most dynamically growing segment of the media market" (1 November).

Political observer Tatyana Stanovaya saw positive aspects in Potanin's development of a media empire, even if it is just entertainment and non-political, interpreting this as a sign that the Kremlin is slightly loosening its stress on tight oversight of media. "Whereas earlier the Kremlin was very sensitive towards any attempts by big business to create their own, autonomous media assets on a national scale, now business is being allowed in the media market under close scrutiny and under certain limits." She wrote that now big media holdings can be created if they stick to entertainment or are created by groups close to the Kremlin. She contended that this is "a positive trend for the consumers, who as a result can count on better quality and more varied media" (Politcom.ru, 1 November).

Others creating new media empires

Potanin's purchases were the third recent move by pro-Putin oligarchs to buy up minor TV channels and create new multimedia empires, as Lenta.ru pointed out, citing similar moves by Oleg Deripaska and Alisher Usmanov (7 November).

- In late October, the Ekspert Group announced Deripaska was investing in their project of creating a new Ekspert Media Holding Company, which will launch an Ekspert TV, expand the Ekspert weekly, add a new political weekly, and create a group of websites. There were reports that the Ekspert Group would buy the business-oriented RBK-TV (Ekspert.ru, 20 October).

- On 7 November, billionaire Usmanov, owner of several metallurgy companies, told Vedomosti he is buying half of sports channel 7TV to add to the paper Kommersant, which he bought in August. After buying Kommersant, Usmanov had said that "a newspaper by itself cannot exist in today's media business" and so he was going to create a multimedia holding company made up of websites, TV channels and radio stations, based on Kommersant. A source close to Usmanov said he probably will change 7TV from a sports channel to a business channel (Vedomosti, 7 November).

Source: BBC Monitoring