Mr. Magazine

Propelling a publishing company that was founded in 1928 into the uncertain magazine media future of today might seem like a daunting task, especially when at one time the magazine they published had a circulation of 5 million. Of course, in those years Za Rulem had the only auto magazine in the entire country (the former Soviet Union).

Today, Alexey Vasin, General Director of Za Rulem, has plans to bring the contemporary worlds of print and digital together and continue the success of his predecessors before him, if not surpassing them.

On my recent trip to Moscow, Alexey took time out of his busy schedule to speak with me about the many different extensions of the Za Rulem brand and the platforms being designed and offered to the audience. It was a very entertaining and enlightening discussion.

So sit back and enjoy the last installment of my first trip to Russia as you read the Mr. Magazine™ interview with Alexey Vasin, General Director, Za Rulem.

Husni with Alexey Vasin, General Manager, Za Rulem

But first the sound-bites…

On Za Rulem, past and present: The publishing house of Za Rulem was founded in 1928 and published the magazine. It was the only auto magazine in Russia and the circulation of the magazine was 5 million. Now, it is still the leader of men’s auto magazines in Russia, with probably the largest audience among all the monthly men’s magazines.

On the future of print and digital within Za Rulem’s market: Right now, we are not very profitable in digital either. But it is still important and necessary, because the concept people have of getting information is changing.

On the biggest challenge they face going into the future: Other problems are moving from a printed press to other media. We also have some specialized challenges. For several years we’ve suffered from distribution problems, especially with the kiosks.

On whether he is enjoying his job more now or five years ago: Good question. It was always work, but now it has more tension. It is definitely more challenging than before, especially before the crisis.

On what keeps him up at night: (Laughs) Too many things to mention.

And now for the lightly edited conversation with Alexey Vasin, General Director of Za Rulem:

Samir Husni: Tell me a little about Za Rulem, past and present.

Alexey Vasin: The publishing house of Za Rulem was founded in 1928 and published the magazine. It was the only auto magazine in Russia and the circulation of the magazine was 5 million. Now, it is still the leader of men’s auto magazines in Russia, with probably the largest audience among all the monthly men’s magazines. There are about seven million readers of Za Rulem magazine and the circulation of the magazine is 114,000 monthly.

Za Rulem has four supplements: Moto magazine, the first motorcycle magazine in Russia, and one about logistics and trucks. And two supplements which will be issued in two weeks. We also have our regional newspaper, Za Rulem-Region, which is published in several regions with separate circulations, there are 22 regions in Latvia, but due to the economy, circulation has been reduced to five regions. Also, we publish books and catalogs on the auto topic. And they have many editions.

Za Rulem is actively developing digital. We have a website, which was launched in 1998, one of the first about automobiles in Russia. The audience of the website is about 2 million a month. In 2012, we created a mobile app for tablets and we also have an app suitable for Androids and iPads. We have also estimated that we are the best application for iPads in Russia.

Samir Husni: You mentioned that you started with a circulation of 5 million and now you’re at 114,000…

Alexey Vasin: (Laughs) Our parents started with 5 million. It was the only one at that time (during the Soviet Union era). The market was very different, an innocent time.

Samir Husni: As we are propelling into digital, where do you see the future of print fitting in? In the United States very few magazine companies are making any money from digital.

Alexey Vasin: Right now, we are not very profitable in digital either. But it is still important and necessary, because the concept people have of getting information is changing. And we have to provide our readers with information in the best and most suitable of ways. And concerning the commercial success of digital, we are not lonely in this movement.

Recently we attended a conference in London, where many interesting things about digital content was presented. And we hope that if we unite we will be successful. Unfortunately, it’s not that easy in the beginning.

Samir Husni: Five years ago, most publishers in the United States put their bets on the tablet, this is the future and this is where we’re going to get the money. And that did not happen. Now they’re saying it’s mobile.

Alexey Vasin: (Laughs) Well we haven’t invested all of our money in those things. But when it comes to content, we created a series of things.

Samir Husni: All of the predictions now are on specialized magazines; they will have the most prominent spot in the future.

Alexey Vasin: Such specialization has been here for many years. And talking about our market, we already have only auto magazines and there are even ones for particular models.

Samir Husni: Even with the motor magazines in the States we have specialized ones for baggers, the motorcycles that have bags on the sides.

Alexey Vasin: We are moving in that specialized direction. And, as I said, we are specialized already as we are all about vehicles of some type. And while many other magazines have their auto departments, we are concentrated only on autos.

Samir Husni: What do you think is the biggest challenge you’re facing as you move toward the future?

Alexey Vasin: (Laughs) We have many obstacles. Some just in general with our market and some that are very particular. Speaking about the general ones, it is of course, the reduction of interest in print and switching audience attention to other channels of communication, such as digital.

But from the other side we have the potential for further development. We have the audience and we have the advertising budget.

Other problems are moving from a printed press to other media. We also have some specialized challenges. For several years we’ve suffered from distribution problems, especially with the kiosks.

Samir Husni: Yes, it seems like every publisher I’m meeting with, it’s the same: distribution and distribution.

Alexey Vasin: Yes, but when we are active on every channel of distribution, we have almost a 90% presence in Russia, which is one of the highest. So we can’t avoid the general market woes.

Samir Husni: If someone asked you: are you enjoying your job more or less than five years ago, what would you tell them? If you look at 2008; are you having more fun now or does it feel more like work?

Alexey Vasin: (Laughs) Good question. It was always work, but now it has more tension. It is definitely more challenging than before, especially before the crisis. But we are actively moving forward and managing to have a lot of fun and celebrations. (Laughs) It is interesting challenges though.

Samir Husni: Do you live the lifestyle of the magazine? Are you an avid car person or no?

Alexey Vasin: (Laughs) It is easy to be a motorist in Moscow, everyone has a car. There are some researchers from Europe and they found that only 12% of motorists are really into cars and this topic, so that is our target audience.

Samir Husni: My typical last question; what keeps you up at night?

Alexey Vasin: (Laughs) Too many things to mention.

Samir Husni: Thank you.

And with this, From Russia With Love 4, I conclude my news, views and interviews regarding the Russian media. Until my next trip around the world and its many many magazine and magazine media outlets, here’s to a great magazine day.

As in the United States, newspaper markets in Russia are facing many challenges, both in mastering the digital realms and in increasing revenue. I spoke with Pavel Filenkov, CEO at Kommersant Publishing House on my recent trip to Moscow and we talked about the future of newspapers in Russia and whether the level of journalism all publishers globally are experiencing, with digital figured into the equation, is as elevated as it has been in the past.

His answers are seemingly unique, yet extremely familiar as, once again, I realized that while many miles and customs may separate us, in the end we all face similar challenges.

I hope you find the Russian viewpoint of newspaper publishing as intriguing as I did as you read my interview with Pavel Filenkov, CEO, Kommersant Publishing House.

Husni with Pavel Filenkov, CEO, Kommersant Publishing House

But first, the sound-bites:

On whether he sees the cup half empty or half full when it comes to newspapers in Russia, especially his own: Our newspaper market is of course overheated. I think we have three times more newspapers than we really need. We have, at this moment, approximately 6,000 to 8,000 newspapers.

On whether he believes journalism has improved or declined over the last 5 to 10 years: In Russia and in every country, there is government which this country needs. And every country has journalists, which I can also say this country needs, but I am not sure that our country needs the same level of journalism that we have now, or as we had two years ago.

On the impact of digital on print newspapers in Russia: We have to move in the direction of digital media. We do not see a model way, but the quantity of advertising money, which is in the digital field and the printed field, is approximately the same.

On whether the content of newspapers overall is a reflection of the general audience: I agree to some extent with that statement, but here in Russia we have a much more important problem, which limits the future development of our newspapers. And it’s the problem of distribution.

On the distribution problems of his newspaper, Kommersant: Our subscription base is collapsing because we have only one partner in distribution, the Russian post office. And the price of delivering newspapers is growing from month to month and year to year. In fact, our distribution through the Russian post office is absolutely inefficient.

On what he sees as the light of the future for his newspaper: We hope that we will have the capability to get money from the digital outlets in publishing. That’s why we are trying to develop a digital print system from Adobe.

On what keeps him up at night: Too many things. (Laughs) I go to bed very late and I wake up quite early.

And now for the lightly edited conversation with Pavel Filenkov, CEO, Kommersant Publishing House:

Samir Husni: Tell me a little about the state of newspapers, specifically yours, but also in general, in Russia. Do you see the cup as half full or half empty and specifically about your paper first?

Pavel Filenkov: I think all are an advertising market, especially our newspapers. It’s just 100% part of unstolen money from oil. The lesser the price of oil, the less money we have, (Laughs) as the price of oil has fallen. So, of course, our income has fallen approximately the same percentage.

The estimation of how much our advertising market has fallen this year is about 12% among newspapers. The advertising in magazines has fallen even a bit more and a little less in business newspapers. As we are a business newspaper, of course, our percentage has fallen a bit less, around 4% for this year.

Of course, we understand that we have no reason to hope that the price will go high, so we think that next year will be worse than this one. The decrease in advertising incomes will of course continue and we think that decrease next year will be approximately 15%. But, this is certain, we have fun news also.

Our newspaper market is of course overheated. I think we have three times more newspapers than we really need. We have, at this moment, approximately 6,000 to 8,000 newspapers. Of course, not all of them are really working, but maybe around 5,000 are. It’s too many for our country.

And as a result of this, there is a lapse in the advertising market, and maybe a big part of these newspapers will die. And the main newspapers will divide their money, their heritage, and their piece of this pie.

So, I think that the newspapers that will survive during the next year will not have the poor health that we have at this moment. Of course, the quantity of newspapers will reduce, but the ones that survive will be status quo or maybe even in a better state economically.

But I do understand that this logic is, to some extent, crocodile logic, complete with crocodile tears, but we have to see things realistically. (Laughs)

Samir Husni: You have this vast number of newspapers; do you think in the last 5 or 10 years journalism has improved or declined? Are we better overall journalist’s today or are good journalists becoming few and far between?

Pavel Filenkov: We can see our country as a country with constant political and economic sedation. Of course, we will not see a reason why our journalism should become more worthy.

But our country changes and the newspapers should change as well. And of course, we are trying to satisfy external conditions and we try to go together with our country. And when we try to perform under these new conditions, I’m not sure that we become better,

If we can see our level of journalism from that point of view, I think in the future we will have journalism of more worth. But if we can also see journalism as a need of our society, then I think the level of this profession may become higher or at least stay the same.

In Russia and in every country, there is government which this country needs. And every country has journalists, which I can also say this country needs, but I am not sure that our country needs the same level of journalism that we have now, or as we had two years ago.

Samir Husni: What about the impact of digital? Has the advancement of digital impacted the printed newspaper at all?

Pavel Filenkov: We have to move in the direction of digital media. We do not see a model way, but the quantity of advertising money, which is in the digital field and the printed field, is approximately the same. But when we consider money in the digital field, 90% of this money belongs to context advertising. And only 10% belongs to real media advertising. And in print areas, the average is absolutely different, about 100% of the money is real advertising money, maybe a small percentage is context advertising money.

That’s why we can set only media advertising money, not context, so we can get from the Internet, from digital, only 10% of the market. So we cannot get from the digital area more than 10% of our income. But we are ready to go into this area.

For example, our auditorium in digital and our auditorium in print are approximately the same. Even on the internet we have more loyal readers. Only 10% of our money from the print area, do we get from the Internet.

We don’t have a model yet for how to get more money from that market. That’s why our development in the Internet area is very limited. We have finished the period of time when we invested in digital with all of our allotted money for that area. We finished that strategy because we aren’t getting a very high response from the investment.

So, at this moment, my strategy for Kommersant is to invest enough money to support our development level in the Internet; however we don’t consider the Internet our salvation.

Samir Husni: Have you noticed that with the printed newspapers, some people are saying the problem isn’t with ink on paper, it’s with what’s being put inside the paper: the content.

Pavel Filenkov: I agree to some extent with that statement, but here in Russia we have a much more important problem, which limits the future development of our newspapers. And it’s the problem of distribution, because at this time we have a lapse in both channels of distribution. Our subscription base is collapsing because we have only one partner in distribution, the Russian post office. And the price of delivering newspapers is growing from month to month and year to year. In fact, our distribution through the Russian post office is absolutely inefficient.

Samir Husni: It’s costing more than you’re bringing in.

Pavel Filenkov: Yes, exactly. And we have a very big problem with our retail, because the standard way of distribution is retailing by means of kiosks and outlets, and the quantity of these street kiosks is reducing from year to year. I don’t know why, but this is politic of our power, to reduce the number of street kiosks.

So, at this time we have more than a 50% return from our retail. Of course, this is an absolutely inefficient way of distribution. That’s why the problem of distribution is much more important for the survival of newspapers. It’s much more important than all our other problems, levels of journalism or technology or development; for us, all these problems are much less important than distribution.

Samir Husni: Very true. If you can’t get the paper into the hands of the readers…

Pavel Filenkov: Yes, but we are trying to use different ways of delivering and distributing newspapers. For example, for us a very important channel of distribution is on board distribution. The other problem is just printing our newspaper, but we still have enough of a printing press to print it.

We print our newspaper and it’s necessary to understand, the circulation of our newspaper isn’t big for Russia. We print about 100,000 to 120,000 copies and this is a low circulation because we are a business newspaper and our readership isn’t as big as other papers that print1 million to 2 million copies.

Our circulation is so low we have to print out the newspaper in 14 or 15 different places in order to deliver the paper on time to the different regions of the country.

Samir Husni: In the midst of all this gloom and doom that we face as journalists in the industry, where is the bright side? What do you see as the light as you move toward the future?

Pavel Filenkov: We hope that we will have the capability to get money from the digital outlets in publishing. That’s why we are trying to develop a digital print system from Adobe. We have our application in all electronic magazines and the Apple Store in Google Marketplace. Our application is produced for all platforms: tablets, PC’s IOS and Androids. And we believe that this will be another revenue stream for us in the future. So, that’s one channel.

The next channel, which we hope will give us another possibility to survive, is a way to deliver some services to our readers. For example, information services, databases, approaches to some loyal services, registration services and others as well. So we have created a special company which provides these services. And these services can be accessed by means of our site. For us, this is a way to attract additional readers and get more revenue, not just by advertising, but by the means of giving our readership much more value. Almost all of these services are payable services; they aren’t free of charge, so for us this is another important way of income.

At this time we get approximately the same money that we get from the Internet, about 10% of our advertising income we get from these services. And of course, we have a very good partnership between our newspaper and these services. The newspaper, in this case, serves as advertising for our company and our information facilities. We see these two ways as things we are going to develop.

Samir Husni: And this venture into e-commerce…

Pavel Filenkov: Yes, we tried to launch an e-commerce in its simplest form, as an eShort, but we stopped the project because we realized that we are not good sellers when it comes to jewelry or books and songs; we are not professionals. But we are professionals in the area of information, so we’ll produce our kind of goods.

Samir Husni: My typical last question; what keeps you up at night?

Pavel Filenkov: Too many things. (Laughs) I go to bed very late and I wake up quite early. I’m trying to do as much every day as I can and for me that is the result of my sleeplessness. Also, I wish to spend as much time with my work and my family as I can.

Samir Husni: Thank you.