Between the state and the market: An analysis of TASS’ fall and rise

The development of Russian news agencies: Historical background

Russian news agencies have been under strict state control during almost all their history. This history can be divided into three periods, in all of which the state has played a significant role: (1) Imperial Russia, 1866–1917; (2) Soviet Russia and the Soviet Union, 1917–1991; and (3) the Russian Federation, 1991–2019.

TASS as a national and international agency

Like all other international agencies except Reuters, TASS has continued to fulfil a double role as a national and international agency. Since the 1990s, the legal form of TASS as a federal state-unitary enterprise has remained unchanged, and this has allowed it to obtain direct budget financing without obligation to earn a net profit, enabling the agency to function without economic or commercial pressures. However, despite the financial support from the state and its worldwide brand recognition as the key news agency in Russia, TASS became relatively weak compared to its competitors, both at the international and national levels, gradually losing its position from the 1990s. The agency’s strong brand, huge information archives, wide subscription base, highly professional employees and relatively stable state financing all became obstacles to an understanding of the need to transform itself. TASS’ rigidity and unwillingness to change were partly caused by its management, with many heads of departments keeping their positions from 1991 right up to 2012, when a new top-management team took office.

In 2012, Russians perceived TASS as ‘obsolete’, ‘clumsy’ and ‘official’. ¹ Only 65 per cent of the territory of the Russian Federation was covered by the TASS service, the number of its correspondents in Russia declined to less than 50, and their average age had increased to 54.8 years. The total number of employees remained extremely high – about 2000 – and their average age also increased, to 50 years, with about 200 employees (10%) who were aged 80 and older. In addition, 61 per cent of staff held administrative positions and were actually not involved in news production. The largest in-country photo archive, with millions of pictures, was hardly being used. ¹

TASS had also lost some of its formal global presence when it radically reduced the number of its foreign offices. Before 1991, the TASS information network operated in 116 countries, while in 2018, TASS supported bureaus in half that number of states (59). By 2012, the majority of the foreign correspondent bureaus had almost ceased active operation. ¹ Russia was losing its international influence and its largest news agency was doing the same.

The current stage of TASS’ development began late in 2012, when a new TASS Director General, Sergey Mikhaylov, was appointed. The state financial investment increased, in 2011 direct budget subsidies to TASS amounted to 1.1 billion rubles (US$37.5 million); in 2012, to 1.4 billion rubles (US$46.1 million); and in 2013, to 1.8 billion rubles (US$55.6 million) (Budget Laws, 2011, 2012, 2013). Meanwhile, a new management team allowed changes to begin both nationally and internationally. TASS also invested in research; the TASS Research Centre was established in 2014 to investigate economic and social processes in Russia and abroad (TASS Today, 2019). Mikhaylov’s major goal was to transform the ‘old-school’ conservative news agency into a modern media company able to compete both at the national level with such leaders as RIA Novosti and Interfax and at the global level with the most advanced (in his view) global players – Reuters, AP and CNN (Mikhaylov, 2019).

In 2014, the ITAR-TASS agency returned to the old, globally known TASS brand ‘for delivering news to global audiences’ (TASS History, 2019). The rebranding was a marketing paradox, since the agency was reclaiming a Soviet brand, while wishing to win new positions in the Russian media system and to comply with technology-driven changes. The official position of TASS was ‘rebranding the oldest news agency in Russia is destined to become a symbol of professionalism, enthusiasm, readiness of its team for personal development and the agency’s bid to preserve and develop its best traditions’ (TASS History, 2019). According to the TASS mission statement (TASS Corporate Style, 2018),

By combining a modern technological base and professional expertise, TASS is an important part of the global information system. TASS is a collector, integrator, custodian and distributor of news. It works for the sole purpose of creating a coherent and reliable coverage of what happens in and around Russia, and of creating and supporting a united information space in the Russian-speaking world.

By 2018, the number of its own correspondents in Russia had increased to 80 and their average age had fallen to 36.6 years. Total staff numbers have declined by 10 per cent to 1800 employees, with an average age of 40 (562 employees were aged 30 or younger). The number of employees in news production departments has reached 54 per cent of the total, compared with 39 per cent in 2012. ¹

The agency has maintained and even strengthened its foreign correspondent network, which in 2018 included 61 correspondent bureaus in 59 states; in 16 foreign countries, TASS reporters remain the only Russian correspondents. TASS plans to launch offices in 12 new countries in 2019 and to start news production in five more foreign languages (now only two languages, Russian and English, are in use; until 1991, news feeds in 24 languages were distributed). ¹ TASS now has more than 5000 corporate subscribers in Russia and around the world (1000 mass media clients, 200 diplomatic missions, 250 financial companies and banks, and 200 industrial enterprises, research and educational organizations and libraries) (TASS Today, 2019). It produces more than 100 news products, with a daily volume of about 1200 news items and 500 images (TASS Today, 2019).

In 2015, TASS became the news source most cited by the Russian mass media (Medialogiya, 2015), and by the end of 2018, the agency was also the national news agency most cited by international news agencies. ¹ In 2019, the ‘Big Trio’ led the market in Russia in terms of citations (Medialogiya, 2019). In terms of market share, counted in media citations, there have been two leaders in recent years, TASS and RIA Novosti, while Interfax is gradually losing its position (see Table 1).

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Table 1.

Citations in mass media of the ‘Big Trio’, 2015–2018.

Mass media citation index
Year	TASS	Interfax	RIA Novosti
2018	150,394,16	65,346,80	156,122,08
2017	158,172,09	77,512,68	140,933,87
2016	169,837,03	94,125,16	152,789,91
2015	150,150,72	109,915,94	142,109,39

Source: Medialogiya (2015–2018).

TASS: Telegraph Agency of the Soviet Union; RIA: Russian International Information Agency.

Mikhaylov considers RIA Novosti as TASS’ main competitor in Russia, but has pointed out that it is rapidly being transformed because the state is willing to use some of its services as a propaganda tool abroad. This may inevitably cause bias in the agenda set by RIA and therefore a loss of quality of news content.

Relations with the state

Four contemporary international agencies, Anadolu in Turkey, Xinhua, EFE in Spain, and TASS, are state-owned, while AFP is publicly owned (Vyslozil and Surm, 2019). Since state-owned agencies are under-researched, we know very little about how these are managed or governed. The specificity of TASS’ legal form means that there is a single owner – the state – and this determines the mode of corporate management. The TASS Director General has to be appointed by the government of the Russian Federation (Resolution of the Government of the Russian Federation, 1994). The Director General then appoints the Editor-in-Chief and the TASS Board. The corporate strategy and budget are determined by the Board, consisting of the Director General, his deputies and the heads of leading divisions of the agency, and approved by the Director General. ²

Political factors are extremely important in the agency’s activity, first due to the specificity of ownership structures and the fact that the state remains the largest investor in TASS. In 2018 alone, the volume of direct budget financing of the agency was 2.9 billion rubles (US$46.2 million) (Budget Law, 2018), while the total share of state financing in the agency balance sheet was about 65 per cent, a very high percentage compared with EFE (51%) or AFP (38%) (Surm, 2019). However, the forms of state financial control are extremely sophisticated and difficult to track (Lebedev, 2019), especially when it comes to influence on news content. As Rantanen and Kelly (2019) show elsewhere in this issue, all news-agency directors, whatever the ownership form of the agency, deny any influence on their journalists.

TASS Deputy Director General Maxim Filimonov (2019) said,

TASS is important to the state because it has to set the news agenda, and moreover the national news agenda. [. . .] We have to cover the Russian vision everywhere, how our compatriots live everywhere . . . what they think, what matters for them, and what is important for the state. There are two traditional sources of information: embassies and TASS . . . The state holds the information defense, with the help of a national agency. The state cannot defend itself, it must be protected, so our work is national information protection.

TASS management emphasizes the agency’s role as a public servant rather than as the voice of the state. Some of our interviewees underlined how, despite being a state-owned and mostly state-funded media company, TASS attempts to offer a public service. They tend not to separate the agency, society and the state, and to argue that the agency has a public role they find unique. They consider state financial support acceptable, but also argue that the state often cannot set tasks – actually what it wants to be done – and therefore cannot control any results except financial ones. According to our interviewees, the news agency itself seeks to identify its own goals, deciding what is actually needed in terms of news agenda, news supply and editorial standards. Consequently, the agency formulates its tasks and then receives money for their execution. TASS executives did not disclose specific details of mechanisms or interrelations with state bodies, but they mentioned that regular meetings and discussions served to maintain the process.

According to these same interviewees, TASS covers stories which match state interests, such as the economic strategy of import substitution or major issues in foreign policy. This further influences the national news agenda presented in the mass media by drawing the attention of other Russian news media. ² The interviewees underlined how reporters who use the TASS newsroom guidebook when compiling news are not censored at the newsroom level, but they also mentioned that ‘taking into account the position of the state’ happens at higher levels of the administration hierarchy (for instance, editors).

The influence of state ownership on news agencies is difficult to study when relying mainly on elite interviews and official documents. As academics, we can study managerial discourses (Kezar, 2003), but to find evidence of the influence of ownership through conducting interviews at the top level is almost impossible. This becomes possible only by interviewing journalists and news-agency clients, together with a content analysis of news.

Moving towards a B2C model

Some news agencies in Europe have successfully diversified their operations (Jääskeläinen and Yanatma, 2019), but it has turned out to be more difficult for state-owned agencies to change their old business models (Surm, 2019). TASS remains a general news agency. Movement towards a niche business model, via the launching of new wires and thematic products has been considered inefficient because of the absence of enough demand. The agency’s shift towards a B2C market has been seen as a difficult and slow process. In 2012, the overall level of TASS’ technological development was extremely poor. The agency was using only manual modes of searching, gathering and handling information, without any use of mobile platforms or apps. Traffic on the website (tass.ru) was less than 5 million unique visitors per month.

In 2013, the TASS site was relaunched, increasing traffic from 5 million visitors monthly in 2013 to 12 million in 2014. ¹ After the site was relaunched on a new platform in 2018, traffic jumped to 19 million unique visitors monthly in 2018 and almost 23 million at the beginning of 2019. ¹ According to LiveInternet data for monthly traffic in May 2019, tass.ru was in the second ten of media sites, the leader being ria.ru (the RIA Novosti site), with approximately 2.5 times more traffic (LiveInternet, 2018). TASS also delivers news on a mobile version of the site and on the major mobile platforms (Facebook, Twitter, Vkontakte, Odnoklassniki, YouTube); moreover, it has launched three mobile applications of its own (TASS Seichas, TASS Kalendar’ and TASSSnimki).

TASS managers consider the development of new technologies as the key factor influencing the agency’s future strategy. They argue that the major obstacle to becoming a more serious competitor with the largest global international agencies is a lack of advanced and sophisticated digital technologies. Mikhaylov confirms TASS’ willingness to develop both B2B and B2C market segments:

We want to stand on two legs: B2B and B2C. The B2B segment will somehow migrate in the direction of technology and services but with no service setting that would allow receiving any information more quickly, better, more conveniently, contextually. And of course we will not give the B2C segment up.

By 2018, more than 850,000 images from the TASS photo archives had been digitalized. ¹ The recently launched in-house infographics studio produces a range of visual products on key topics in politics, economics and so on. TASS was even a winner of the 2018 European Design Awards in the infographics category. ¹ The latest TASS project, TASS-Audio, produces news in audio format and delivers this mainly to radio stations.

TASS management cites artificial intelligence and virtual and augmented reality as the most important technologies to be implemented by media companies. The agency now implements systems of automated monitoring, gathering and handling of information, tests robotized news production and plans to develop artificial intelligence models. For instance, it uses robotized production of news covering Russian Central Bank activity, national budgeting and other financial processes. TASS has introduced a system, allowing the creation of semi-automated descriptions of incoming news materials and has launched an internal archive with fast access to information. ¹

TASS executives remark that the products of news agencies designed for a B2C market, for consumers able to pay small amounts, are almost absent from the Russian market. Online advertising revenues have been estimated as low, and therefore, the agency has continued to work on special projects development. TASS managers confirmed that these investments are the largest in the digital environment. ² The agency’s strongest competitors remain digital media platforms such as search engines or social media, TASS managers emphasized. Collaboration and association with digital platforms are seen as a potential path to further development. At the same time, these platforms are regarded as the most dangerous threat to the agency’s own development. Mikhaylov (2019) said,

We see a big threat from international and Russian platform solutions – Yandex, Google, Facebook, etc. They could begin to dictate to us the terms for how we distribute content, how we should earn on this content, and what content we have to make. There are a lot of dangerous stories here. This will affect both the volume of our audience and our advertising income. This is a big problem, especially for media that do not have such state participation as we do. It may all be very sad if there is a large dependence on advertising income. The margin taken by the platforms does not allow the media to have positive economic effects from content production.

The digital platforms are considered by TASS executives as the intermediaries that disconnect legacy media from their audience and, therefore, deprive them of direct access to potential revenues. Compared with its domestic and international competitors, technology-driven changes at TASS have come late but fast. Obviously, the role of the state has been rather a contradictory one in this context; in the early stage of technological transition, TASS’ development was delayed by rigid management and state financing, but it was the state that then sharply accelerated the agency’s movement towards modern technological solutions and thus new business models.