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Press releases | Archive 2006

Duma-approved new edition of the Advertising Law to have positive impact on RBC revenue

Moscow, February 26, 2006 - The State Duma of Russia has passed a new edition of the Advertising Law in its third and final reading on February 22, 2006.

Particularly, the law sets forth a 20% (12-minute) advertising quota per hour, and a quota of no more than 15% of the total broadcasting time per day for 2006 and 2007, replacing the current quotas of around 25% per hour and 20% per day. From 2008, both the hourly and daily advertising time will be cut to not more than 15% of the total broadcasting time, with the changes applying to the so-called TV shops and crawlers as well, whose broadcasting time allocations have never been regulated before. Experts estimate that the new Advertising Law will boost advertising costs by 40% to 45% in 2008 compared to 2007.

"We believe that these changes will have a positive impact on the revenue of RBC TV and RBC's Internet resources, as they will considerably increase advertising prices on federal television channels," RBC Chairman and CEO German Kaplun said. "Additionally, RBC TV has only been using around 15% of the total advertising time allowed per hour by law, and hence has a considerable time allowance for advertising. In our opinion, the new rules will also prompt companies regulated by the new law to reallocate their advertising budgets between nationwide TV channels, and niche TV channels, the Internet and the print media. Consequently, RBC's web sites, targeting both the business community and general audiences will be well positioned to become an attractive advertising platform for such companies, which will have a favorable effect on RBC revenue from Internet advertising."

The new edition of the Advertising Law approved by the State Duma is aimed to put forth tough requirements for alcohol, beer and tobacco advertising; restrict gambling and casino advertising; regulate the advertisement of drugs and dietary supplements; set stricter rules for the advertising of financial services; control the amount of advertising in children's programs; and ban the usage of outdoor advertising boards resembling road signs and advertising by means of special transport used for the purpose of advertising only.

To come into force, the new edition of the Advertising Law must yet be passed by the Federation Council and signed by the President of Russia.

Press and investor contacts:
Egor Timofeev
Tel: +7 (495) 363-1111
Email: pr@rbc.ru
Web: www.rbcholding.com