The CTC channel was the third most-watched broadcaster in Russia in the first quarter of 2013, with an average target audience share of 11.3% (Q1 2012: 12.7%). The channel, however, increased its target audience share compared with the fourth quarter of 2012. The year-on-year decline in the target audience share reflected overall audience fragmentation, increased competition and the later scheduled timing of the launch of the channel's high-rating premieres compared to the first quarter of 2012.

The Domashny channel's target audience share decreased year-on-year in the first quarter of 2013 from 3.7% to 3.0%, reflecting changes in the programming grid due to an increased focus on younger audiences and increased competition from other channels. In Q1 2013 the age segment "Women 4-24" in Domashny's audience profile was up by 10% year-on-year and the segment "Women 25-35" was up 14% year-on-year. The structural qualitative changes in the Domashny audience attracted new advertisers to the channel in the first quarter of 2013, including those that historically did not allocate their ad budgets to television.

The Peretz channel's target audience share decreased year-on-year year in the first quarter of 2013 from 2.8% to 2.5%, primarily due to increased competition, but was up from 2.3% in the fourth quarter of 2012. Peretz channel is continuing to develop its positioning, brand and programming grid in 2013 with a focus on edgy and comedy programming.

Our Russian channels' target audience shares were affected by continued audience fragmentation and increased competition. All larger national free-to-air TV channels in Russia were negatively impacted by increased competition from smaller non-free-to-air and local TV channels' viewership, which increased from 12.6% in 2010 to 14.5% in 2011, 15.3% in 2012 and 17.0% in the first quarter of 2013 among viewers above 4 years old.

Channel 31's average target audience share was slightly down year-on-year in the first quarter to 13.4% from 14.5% due to increased competition from other channels.
Revenues
         
         
  Three months Change
  ended March 31,    
(US$ 000's) 2012 2013 in USD in RUB
         
Operating revenues:        
Advertising revenue $180,669 $180,669 5% 7%
Sublicensing revenue 9,241 3,903 -58% -57%
         
Other revenue 1,210 1,352 12% 13%
Total operating revenues $191,120 $195,287 2% 4%

From January 1, 2013, the Company has changed the structure of its reportable segments following the reorganization of reporting financial information to make operating decisions. See "Changes in Reportable Segments," below.

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