Photo by Alexander Maslov for Forbes Life

Former general director of NTV about modern television, Vladimir Gusinsky and the crisis of the system

On Monday, February 25, it became known about the death of one of the founders of NTV, Igor Malashenko. In 2015, he gave a long interview to Forbes Life magazine.

Previously: General Director of the NTV television company

Now: Director Inter TV (UK)

Have you heard about the appointment of Alexei Zemsky as the new head of the NTV channel?

Igor Malashenko: Yes, I heard.

How do you rate it?

I.M.: No way. None of this matters.

And why? Is NTV a sore subject for you?

I.M.: No. I don’t really follow television at all now, I get information from the Internet, so television doesn’t interest me.

Television now exists on the Internet; it is no longer possible to separate it into television in a box and the Internet on a computer.

I.M.: I consider it a waste of time to listen to analysts and commentators, because all of this, by and large, is part of entertainment and, accordingly, is not interesting to me. I still remember the times when television was a source of information. Let me figure it out. Let's say in the 1980s it was certainly a source of information. We are talking about American television, when everyone watched the evening news, weekly programs precisely to receive information. But this need disappeared with the advent of the Internet.

When did Russian television cease to be a source of information for you?

I.M.: When I noticed an obvious, let’s say, discrepancy between the picture that I can form for myself and what can be formed by looking at TV.

It’s strange to hear this from a person who spent most of his professional life managing television companies; it’s strange that you have completely lost interest in this product.

I.M.: No, Anna. And before, when I watched television, I simply assessed what happened, how the machine worked, because television is a very complex machine. As Bulgakov once wrote: “There are many machines in the world, but the most complex is the theater.” Therefore, it is important to build and assemble this machine correctly so that it produces the product you need. And then you simply look from the point of view of control, what came out of it.

You once said that you continue to monitor the ratings of Russian TV channels. Do you still follow them?

I.M.: I look at how the balance of power is changing, first of all.

If you remember your previous television achievements, how do you evaluate them today?

I.M.: When creating NTV, I was given the task of immediately becoming a leader in the television market. And for all this to be done economically, that is, there was immediately an agreement with the main shareholder and investor Vladimir Gusinsky that the channel should reach self-sufficiency and start making a profit. There was never any question that this channel could be unprofitable as planned. This option was simply not considered. In those days, creating a full-scale commercial channel, believe it or not, was a very difficult task, because no one had any idea how to do it.

Initially, Kiselev found me, said that there was such an idea, and invited me to become the general director of this project. I didn’t know what kind of person Gusinsky was, I didn’t understand how serious it all was, but after working at Ostankino I really wanted revenge. We met with Gusinsky. I must say, the dialogue was quite strange, because we are completely different people in our biography and in our manner of communication, in everything.

You didn't like him, did you?

I.M.: I think that I made some strange impression on Gusinsky, and I had never seen people like Gusinsky before, so it was a conversation between two different biological species.

Nevertheless, communication began. The first stage was very difficult, because, I repeat, where to start, it was not really clear. Many people well-known in the television world, to whom I offered to work on the NTV project, refused, saying that they did not understand how to do it, that nothing would come of it, etc. Therefore, I simply had to do a lot of things myself, relying on common sense and negative experience gained at Ostankino.

Then, when they began to calculate how much it would cost, I came up with figures significantly higher than those from which Gusinsky proceeded. Which, of course, he didn’t really like. And soon two more co-investors appeared - Alexander Smolensky and Oleg Boyko , who, however, also quite soon, having seen what we were creating, left NTV shareholders. I think they simply assessed the political danger of this project for themselves personally and, like reasonable businessmen, decided not to get involved with it.

Was the political danger obvious even then, at the very beginning of the journey?

I.M.: It was clear that the channel whose main product would be news would be the “Itogi” program - in general, every experienced person who grew up in the Soviet Union understood that it would be dangerous. To be honest, I underestimated this situation. It seemed to me that the country had changed radically, and, frankly speaking, I greatly underestimated the danger factor.

When did you evaluate it?

I.M.: Everything became clear when the presidential security service, headed by Korzhakov, carried out the so-called operation “Face into the Snow” - the motorcade of Gusinsky’s guards was blocked on the site in front of the mayor’s office on Novy Arbat (Gusinsky managed to get up to his place). There, the guards were literally put face down in the snow, a dangerous confrontation arose, because the Moscow FSB arrived, which was completely unaware of this operation, several shots were fired, in general, the situation was completely sad. And a few days after that, Gusinsky had to go abroad for six months for safety reasons, as it turned out later. It wasn’t even a warning anymore, it was straight away, as they say, right off the bat.

That is, problems due to political content, due to the informational content of our news, began in earnest. Therefore, from that moment on, none of us underestimated this danger. But amazingly, NTV passed through this line, although there were simply direct threats to close NTV, there was even a government meeting where Deputy Prime Minister Soskovets announced that if NTV did not change its information line in Chechnya, the channel’s license would be revoked.

There were other, to put it mildly, warnings addressed to us, not so public. Nevertheless, we continued to work as we worked. Moreover, after some time, other channels - First, Second, first of all, looking at how NTV worked, also began to work differently, because it is stupid to try to pass off black as white and say that “everything is fine, beautiful marquise” when it was clear that everything was bad.

From that moment on, life became easier for NTV, because almost all television covered Chechnya in a similar way.

Was the NTV channel profitable by this time?

I.M.: No, at this point NTV was not yet profitable. But NTV really began to make money quickly. I remember that I had built into my plans an extremely conservative estimate of how much advertising we could get in the first year. In 1994, this figure was immediately surpassed, and much greater. That is, it was clear that NTV had very successfully rushed towards its goal, in fact, it was becoming a profitable channel. I then liked to quote I don’t remember whose Western wisdom that a license for television broadcasting is actually a license to print money. They laughed at me, but I believed in it, and, in general, that’s how it turned out.

Looking ahead a little, I can say that the NTV channel was very profitable in 1998, or rather its first seven months, because, if you remember, in August 1998 a default broke out, the ruble collapsed, accordingly, advertising revenues collapsed and a real crisis broke out. It was overcome quite quickly, without me, there was a different management. NTV continued to develop successfully financially.

After you, it turns out that NTV remained a machine for printing money. Did the commercial scheme you laid down continue to work in the new realities?

I.M.: She continued to work in new realities, of course. But let's go back to the nineties. Obviously, you had to be such a gambling person as Gusinsky in order to support all this and invest a lot of money at that time. I created my first budget for 15 months, we went on air in October 1993. The first three months were very specific, actually trial and acceleration months. I calculated that my expenses should be $29.5 million, as I remember this figure now.

In reality, we spent $30 million, and we only allowed ourselves to do so because advertising revenues were multiples of what I had set as very conservative estimates.

What do you think is the order of magnitude difference from what is happening today, for example, on NTV?

I.M.: This is an order difference. The company was in great shape in 1998. By the way, we were ready for the IPO, we were already completely ready, and the road show was initially scheduled for June 1998. Some trouble happened there; as far as I remember, a Russian pharmaceutical company performed unsuccessfully. And our consultants said that although pharmaceuticals have nothing to do with television, since this is also a Russian company, the road show should be moved to September so that there is no negative reflection. Between July and September, as you know, there was a default in August, and there was no talk of any IPOs; for several years it was possible to forget about it.

And today television has been nationalized in one way or another with all the ensuing consequences. Why, for example, never returned to the issue of the IPO of the same NTV? Because this is not required. Not in terms of money, since there is Gazprom there, which will help if something happens, nor from the point of view of ensuring transparency and shareholder rights. Do you understand? Shareholders - they can begin to express their complaints about some aspects of the activities of television companies. Nobody needs this. This is already an amazing thing.

How did you imagine the distant future of the company in the late nineties?

I.M.: According to my concepts, the structure should have been maintained in the form of, as I called it, a general entertainment channel, General Entertainment Channel. In addition, the task was set to produce our own series, and production of the first series began, these were “Streets of Broken Lanterns”, the famous “Cops”. Gusinsky then began investing in film production. Film production in those years was unprofitable, and it was clear that it would not be profitable for several years, but Gusinsky believed, and rightly so, that in this way he was making a foundation for the future, because in the end the local product should win.

So he felt everything correctly?

I.M.: Yes, I think that he is truly a born media baron and in this sense he felt correctly. Perhaps he was too passionate, but that's another question. Non-gamblers do not create media empires.

I remember RTVi and your attempts to create a TV channel in Ukraine. In the future, were you able to make the same breakthrough as in the case of NTV?

I.M.: The RTVi channel was necessarily limited in funds, because the funds that could be collected by subscription and from the foreign advertising market cannot be compared with what could be collected on the Russian market.

A heavy blow was Israel's decision that foreign channels do not have the right to broadcast Israeli advertising. Attempts to challenge this decision in court were unsuccessful, although the decision, to put it mildly, is very controversial from the point of view, for example, of WTO rules. In short, the channel lost Israeli advertising. As for Ukraine, I looked at the Ukrainian market and realized that the situation is very difficult, because all or almost all of these farms are planned to be unprofitable. That is, these channels were financed by oligarchs openly for their political or reputational purposes, and the market was spoiled, since the goal of self-sufficiency and profitability became unattainable with so many channels.

So the local oligarchs simply turned out to be less advanced and limited?

I.M.: Do you understand what “limited” means? None of them considered themselves media barons. For them, television is a completely third-party thing, an auxiliary thing that could be used either as a political tool, or to raise their own reputation: so, they say, I have a television channel.

The situation there was difficult when they began to create the TVi channel, and it would have taken a very long, many years of work to bring it to decent levels, because in the case of this channel, ultimately, the same task was set - creating a profitable business. None of this happened. Gusinsky's partner, Mr. Kagalovsky, did not behave in the best way and eroded Gusinsky's share, for which he later paid - he completely lost the case in the Supreme Court of the State of New York.

You said that the time when you were a major media manager, the head of a large channel, was the happiest period of your life. Probably they were talking about NTV. Was there a moment you regret? A moment when you didn't compromise when you needed to open another door?

I.M.: You see, if NTV had opened another door, he would have ceased to be himself. For example, I talked about a conflict situation when I launched the “Dolls” program. It has caused the amazement of our political class. And when the character of the president appeared in “Dolls,” it got to the point that the Prosecutor General’s Office opened a criminal case, but it was not scary, but funny. All television today is completely different, so it is obvious that no matter what we did, NTV in the form in which it arose and developed for several years could not survive. I believed that the country had passed the point of no return in its development, when it was no longer possible to imagine it without non-state media. Now this, of course, sounds ridiculous, but then I saw the situation exactly like that. As it turns out, I was wrong.

You talked about the political risks of the mid-1990s, but in 1999 the situation was already different. Gusinsky and NTV were then accused of fighting the Kremlin on the side of Luzhkov and Primakov. How do you now assess the work of NTV at that time? What was more important, business or politics?

I.M.: NTV has always been a business. The fact that Gusinsky stood on the side of Luzhkov and Primakov at that time is disinformation. That is, this was the trick that Berezovsky carried out - he told the Kremlin that Gusinsky was promoting the team of Luzhkov and Primakov to the presidency. NTV broadcasts indicated that there was no campaigning, but normal information work. When Dorenko showed surgery on the hip joint on Channel One, it looked different. That didn’t stop us from making accusations: NTV works differently from Channel One. When Primakov announced that he would run for president, it was about the 17th news on the First, and the first on NTV. And this did not mean that NTV worked for Primakov, NTV simply worked according to the principles of information broadcasting.

This ploy cost both Gusinsky and all of us dearly - it was one of the reasons for the Kremlin’s attack on us. At the beginning of 2000, Video International terminated the advertising contract with NTV, the advertising year ended, we did not have our own advertising - additional losses. If we talk about business, all measures were taken to cut off power to NTV. By the way, I met with Luzhkov at the beginning of 1999, once. He wanted to meet and talk with me. I gave him some standard advice on how to conduct an election campaign. There was no political cooperation. Luzhkov did not listen to advice, I told him about the general principles - they did not interest him. Perhaps he didn't understand what he was talking about. Well, or he was himself with a mustache.

Would you undertake to launch a new media now? If so, what would it be, given all your previous experience?

I.M.: The current state of the advertising market clearly does not allow the creation of large projects, unless they are subsidized by the state or big business. The country has entered a period of protracted crisis, and accordingly, the contraction of the advertising market is a long-term thing. The level of income of the population is falling, and it will continue to fall, unfortunately. Purchasing power will fall.

Would it be possible to remain in the same role as a media manager in Russia, simply by changing the political vector? Your former colleague Oleg Dobrodeev has remained perfectly preserved within news broadcasting, having simply changed his views.

I.M.: You see, I didn’t pout like a mouse on its rump, saying that now I won’t play in your sandbox. I found myself crossed off from the list of those living, but, sorry, I didn’t do it myself.

Igor Malashenko: “I was deleted from the list of living people, but I didn’t do it myself”