Hello! This week our main story looks inside the VKontakte social network at how a Russian nepo baby with family connections to Putin is trying to turn “Russia’s Facebook” into a viable home-grown alternative to YouTube. We also analyze the latest annual Valdai meeting, and ask one of Russia’s leading independent sociologists why Russian society still supports Putin.
The Putin-linked scion behind Russia’s ‘YouTube killer’
Russian authorities have long sought a viable domestic alternative to YouTube in their fight to neutralize the site’s rising and stubborn popularity. In Russia, YouTube is home to interviews and reports by independent journalists, and opposition politicians rack up hundreds of thousands of views for their videos. Unlike many Western social networks, YouTube is not currently blocked in Russia – and it is likely to remain accessible for at least as long as it takes to build a Kremlin-controlled alternative. At first, this was supposed to be a simple YouTube clone called RuTube, but that initiative has not attracted significant audience numbers. Now the authorities are backing the video service attached to VKontakte (VK), the country’s leading home-grown social network. Last month, the wider VK group announced a shake-up of its business structure, naming Stepan Kovalchuk, a 29-year-old scion of one of Russia’s most influential families, as head of the VK social network and the group’s other sprawling media content divisions. The Bell takes a look at Kovalchuk’s career and what his appointment says about VK’s current strategy.
- Stepan Kovalchuk represents the third generation of influential members of his family. His father, Kirill, runs one of Russia’s key media holdings – National Media Group (NMG). His grandfather, Mikhail, is president of the Kurchatov Institute, which was founded in Soviet times to study nuclear physics and is now working on the development of microelectronics. And his great uncle Yury is a co-owner of Rossiya bank, known for its close links with the authorities. Both Mikhail and Yury are old friends of Vladimir Putin, dating back to the president’s time at St. Petersburg City Hall in the 1990s.
- And now the Kovalchuk clan has got itself deep into VK — the country’s largest social network, often dubbed “Russia’s Facebook,” and which was created in the late 2000s by Pavel Durov (in the 2010s, Durov was pressured into selling his stake in the company, after which he created Telegram). Stepan joined the company in 2017. At the time, a source told The Bell his appointment was “at the insistence of close relatives.”
- The young Kovalchuk’s first serious project, funded with money from his father’s NMG, was called “Zhit” (which translates as “to live” in English). It was designed to bring “positive content that shows how Russia is home to happy, purposeful people,” according to a source of The Bell. It was assumed that Kovalchuk would take responsibility for marketing the project and gain experience in social media. In the run-up to the 2018 presidential election, Zhit aligned with the “Putin Team” movement, whose poster boy was NHL hockey star Alexander Ovechkin. Zhit created content for Putin Team, including video clips for two projects, “Homeland of Heroes” and “Children of Heroes”, according to a press release from the time.
- The project still exists — today it churns out inspirational tales about the war in Ukraine, paralympic athletes and teachers.
- Kovalchuk was also named vice-president of VK in 2018, and given the task of using the site to push the Kremlin’s agenda, three sources told The Bell. He led a team that created social media content, and also took responsibility for promoting events that the government regarded as important, such as the annual Victory Day celebrations on May 9, or the “Direct Line” TV broadcasts where people from all over Russia can phone in and put their (carefully curated) questions to Putin.
- However, despite his senior position and powerful connections, Kovalchuk did not have much real authority or financial clout within VK. That remained the case for a few years, until there was a major change in shareholders at the company. Moreover, until as recently as summer 2023, the VK social network had its own management team that attempted to work independently within the wider group.
Chief Content Officer
In 2021, VK “just went to hell,” a federal official said in conversation with The Bell. To save the business, it needed new ownership. In late 2021, billionaire Alisher Usmanov sold his stake to the insurance company Sogaz and leading Russian bank Gazprombank. Both are closely associated with Yury Kovalchuk. Vladimir Kiriyenko, whose father Sergei was deputy head of the presidential administration, took charge of the company.
In Feb. 2022, prior to Russia’s invasion of Ukraine, Kovalchuk was appointed senior vice president for media strategy and service development. When several top managers, including the managing director, then left the company in June, Kovalchuk stepped up again, taking over another business division in charge of content.
With the latest promotion, Kovalchuk is now directly responsible for VK’s overall content strategy. The company is actively buying up the best-known Russian bloggers on YouTube and TikTok to ensure that their content appears exclusively on VK. “The fees for some of these bloggers would be enough to license half of Universal’s library,” a source from the video services market told The Bell.
Why the world should care
VK takes its role as “YouTube killer” seriously. The company got rid of its non-core assets and is focused on developing content services. The timing of when exactly the authorities will decide to block YouTube probably depends on how quickly VKontakte manages to convince them that it is a viable replacement. “It’s clear that the RuTube project is a failure. Over the course of the year, its audience has not increased at all. So, yes, they’re backing VK,” a federal official told The Bell. He doesn’t expect to see YouTube blocked before March 2024, when presidential elections are set to take place, giving enough time for thorough preparations.
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However, we are not about to give up. This newsletter is our newest project. It presents an in-depth analysis of the Russian economy, which has survived the first year of the war but is becoming ever more secretive. We will try and shed some light on what’s going on. Each edition will tackle a part of the big question: how long can the Russian economy endure under sanctions and when will the Kremlin run out of money for its war?
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Valdai’s fall from relevance
Last week, Vladimir Putin spoke at the 20th anniversary meeting of the Valdai Discussion Club, an annual platform that sets about painting a picture of the world and international relations as seen through the Kremlin’s eyes. In the second Valdai meeting since the invasion of Ukraine, Putin once again returned to his familiar theme of Western colonialism and Russia’s struggle against American hegemony.
- The Valdai Club meetings began in Russia in 2004, taking its name from Lake Valdai, located between Moscow and St. Petersburg. The lake is one of Putin’s favorite places – where we can find a presidential residence, as well as the Russian leader’s home with the suspected mother of his children, gymnast Alina Kabaeva.
- The founders of Valdai, a group of NGOs with close links to the presidential administration, initially wanted a forum to tell foreigners about Russia. The first conference in 2004 was staged under the theme of “Russia at the turn of the century: hopes and reality.” One of its founders, political analyst Sergei Karaganov, said at the time: “Slowly, [Russia] is becoming a normal European power.” (More recently, Karaganov has taken to urging Russia to launch a nuclear strike against Poland). In a tragic coincidence, the first iteration of the forum took place just as terrorists seized a school in Beslan, resulting in the deaths of 300 people, including almost 200 children.
- Initially, Valdai was genuinely international. Renowned professors from American and European universities attended the first gathering. In other years, the forum welcomed leaders of various nations — albeit ones that did not hide their affection for Putin and Russia. They included former Czech president Vaclav Klaus, ex-South African president Thabo Mbeki and former French Prime Minister Francois Fillon. Since last year’s invasion of Ukraine, though, foreign interest in the forum has dwindled. This year saw no high-profile foreign participants, with the biggest non-Russian name on offer probably Charles de Gaulle’s grandson Pierre, who has become an active supporter of Russia over the last couple of years and regularly tours the pro-Russian speaking circuit.
- After 2014, when Russia annexed the Ukrainian territory of Crimea, Valdai changed format and stated its mission was to “set the global agenda.” The discussion club, which always featured an address from Putin, turned into a high-profile explanation of Moscow’s current foreign policy course by international professionals with experience in world politics, wrote Dmitry Trenin, director of the Moscow Carnegie Center at the time. But such a format stopped short of sharing details of Russia’s actual foreign policy strategy, relying more on ideology. Putin, for instance, has used Valdai to outline the guiding principles of his foreign policy and his vision of global development.
- In this year’s three-hour address at Valdai, which took place in the mountains close to the southern resort of Sochi, Putin said almost nothing new. The key message for the international audience was as before – a familiar compendium of anti-American theses and a list of grievances against the West. The only point of genuine interest was his comments on the fate of Wagner Group founder Yevgeny Prigozhin. Putin hinted that Prigozhin’s plane might have crashed after a hand grenade exploded on board, before speculating that although the bodies of the deceased had not had toxicology screenings, a previous search of Prigozhin’s St. Petersburg office had turned up 5kg of cocaine.
- Journalists regarded the theory that Putin was getting at as untenable. First, Prigozhin himself never had any known issues with drugs or alcohol, according to people who knew him. Second, even on a private plane it’s not easy to smuggle a grenade on board. It would require approval from the transport security service, which is supervised by an FSB officer.
Why the world should care
As war rages in 2023, Valdai now feels like an echo from the past and a tribute to tradition. There are now many forums to discuss “Russian civilization” and Putin’s current narrative was lifted straight from his periodic public speeches, offering little new.
Why Russians trust Putin
Alexei Levinson, the head of socio-cultural research at the Levada Center and one of the most respected sociologists in Russia, recently gave an interview to The Bell’s co-founder Elizaveta Osetinskaya about public opinion in Russia. Here are some of the key points he raised.
- Despite the war, Putin remains popular in Russia for a few reasons. First, he speaks to the population in informal language, using various jokes, sayings and colloquialisms. For example, shortly before war broke out in Feb. 2022, he adopted prison slang to explain how NATO betrayed Russia with its eastern expansion. The second reason is that Russians believe Putin has one sole responsibility – to uphold the glory of Russia throughout the entire world. That means domestic issues such as corruption barely move the needle, with the exception of the unpopular pension reforms in 2018 that raised the retirement age.
- The war in Ukraine is generally popular among Russians because they see it as an indirect conflict with the West and the USA in particular, Levinson believes. “How can we make America respect us? Space, ballet, playing the violin – that’s all history. Now the only way is through military force,” he said. However, nobody wants a direct confrontation with the USA and the risk of triggering World War III that it would bring.
- If Russia loses the war, it will be the end of Putin’s career, Levinson said. Popular opinion can not conceive of military defeat to Ukraine, a country one-thirtieth the size of Russia. Defeat against Ukraine would automatically be a defeat against the West, bringing a return to the themes of humiliation – “we were brought to our knees” – that have historically swirled through Russian society.
- At the same time, many Russians prefer to hear nothing about the war, Levinson acknowledged. In Russian eyes it is a painful conflict with a “brotherly” people, alongside whom Russians fought against Nazi Germany. “And then all of a sudden it turns out that we’re enemies. It’s very difficult to put this idea into [Russian] consciousness,” Levinson said. “It’s much easier to establish the idea that our enemies are America and the West.”
Why the world should care
Public support for Putin during the war is one of the most widely-discussed issues in Russia and beyond. Many Russians perceive the war as a proxy conflict with the West, in which Russia stands for “good” in the face of a “global evil.”