Media Decoder Blog: Disney Channel to Be Introduced in Russia

LOS ANGELES — The Walt Disney Company on Thursday said it had completed a deal to introduce the Disney Channel in Russia, one of the world’s last big untapped entertainment markets and one in which Disney has struggled to gain a foothold.

Disney said it would acquire 49 percent of SevenTV, a broadcast channel that reaches more than 75 percent of Russia’s television households. SevenTV, which will remain majority owned by United TV Holding Russia, will be rebranded as a Disney Channel and stocked with signature Disney children’s shows like “Mickey Mouse Clubhouse” as well as programming created in Russia.

Financial terms were not disclosed.

Western entertainment companies have stepped up efforts to penetrate Russia as their businesses in other parts of the world — in particular Europe and the United States — have slowed. One indication of how much promise the country holds can be seen in growth of ticket sales there for Disney movies. “Pirates of the Caribbean: On Stranger Tides” took in $64 million in Russia over the summer; in 2007 “Pirates of the Caribbean: At World’s End” took in $30 million.

Television has long been crucial to Disney’s foreign expansion strategy. Typically, the company seeks to introduce the Disney Channel to a new market so it can deliver its brand directly into people’s homes — and in turn, use that foothold to foster interest in Disney movies, vacations in Disney theme parks, and a range of consumer products. The Disney Channel is available in 35 languages and 168 countries and territories.

But the Russian market has proved difficult to enter because of bureaucratic hurdles and restrictions on foreign media. Disney has operated a tiny cable channel in the country for several years, but the vast majority of Russians watch television on free broadcast channels like SevenTV.

Disney thought it had secured that kind of distribution in 2008, when it announced a tentative partnership to create a channel with Media-One Holdings Limited, a Russian broadcaster. But the deal fell apart when government regulators introduced barriers. Disney said it has preemptively worked through those issues with its SevenTV deal.

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