L.A. entrepreneurs translate glasnost into profits.

L.A. entrepreneurs translate glasnost into profits

Entertainment companies across the globe are now clamoring to capitalize on communism's decline and the Soviet Union's urgent need for hard currency, but two Los Angeles businesswomen are reaping the benefits of their foresight in setting up business with the U.S.S.R. before it was fashionable.

Sally A. Miller and Gloria Zimmerman have a combined seven years of Soviet trading experience, most of it with entertainment projects, to profit from glasnost.

Miller, president of Infinity Productions Inc., with Zimmerman, head of Los Angeles-based American International Entertainment, offer their expertise and Soviet contacts to companies that want to establish business, produce movies or news shows in the Soviet Union. AIE and Infinity also have brought Soviet films and products such as watches to the United States.

Even after glasnost and perestroika, negotiating with Soviet bureaucrats can still be an arduous and impossible task for inexperienced U.S. business people. Before cameras can roll in Red Square, U.S. radio shows can be broadcast across U.S.S.R.'s 11 time zones or Soviet watches can be shipped to the United States, companies may have to devote a year or more to obtain the necessary approvals.

But opportunities do exist for people who learn how to conduct business in the Soviet Union, both women said.

To succeed in the Soviet Union, U.S. executives may have to "suspend American `bottom-line' thinking and American perspectives," said Miller.

The two have learned that business deals in the Soviet Union begin with establishing friendships over a glass of vodka and building trust, said Zimmerman.

"The personality is more important than the bottom line to the Soviets," explained Miller. "U.S. companies will sign a contract with the person that offers the lowest bid, while their Soviet counterparts are willing to pay more to someone they like and trust."

Problems with business deals in the Soviet Union, explained Zimmerman, "boil down to lack of access, experience and understanding." AIE and Infinity help U.S. companies to overcome those barriers by using their contacts in the Soviet government and media.

One of Miller's contacts is Svetlana Starodomskaya - the Soviet Barbara Walters - who recently visited Los Angeles and twice co-anchored the nightly news with Jess Marlow on KNBC-TV. Starodomskaya is interested in import/export deals and has helped the company find new clients.

Miller said Stardomskaya helped them find a Soviet watch company that wanted to trade with the United States. "People at the factory instantly recognized Svetlana," Miller said.

But dealing with the company also meant educating them on the basics of international trade - a recurring experience for Zimmerman and Miller in the U.S.S.R.. The company packed the watches in heavy wooden crates and Miller had to convince the company to repackage them in lighter cardboard cartons.

In addition, Miller had to convince the company to ship the watches before receiving payment, which was contrary to the company's standard contract and the way the company had operated for 50 years.

The Soviets are also not accustomed to rapid U.S. business deals. Miller recounted that when she took her Soviet clients to AlphaGraphics, a Canadian-owned copy shop for foreigners in Moscow, they were amazed that she obtained copies of a contract in minutes. "They were use to leaving a document and waiting days for a photocopier or using mimeograph paper," she noted.

Zimmerman, who is fluent in Russian, worked for two and a half years in the publicity department at MGM/UA's international home video division. While at the company, she tried to negotiate a deal for MGM to distribute its video product in the Soviet Union, but MGM backed out because of a "lack of hard currency returns," Zimmerman said. After that experience, she left the company in July, 1989, to devote her full-time energies to Soviet projects.

After going solo, Zimmerman coordinated the Los Angeles leg of the 1989 Glasnost Film Festival, which brought 30 Soviet Films and 10 filmmakers to the United States. She also teamed up with actor Sean Penn to present a Soviet documentary on the underground music scene in Leningrad at the 1990 Sundance U.S. Film Festival in Park City, Utah.

Even after that successful venture, Zimmerman said there is a bigger market for American films in the Soviet Union than vice versa. "Americans don't want to read subtitles or see dubbed movies. Russian movies have a different ascetic than slick American movies so its a harder sell going this way."

Miller and Zimmerman have not formally merged their companies, but they are pooling their resources and their network of accomplished video, television and film personnel in Soviet Union and Eastern Europe for several current projects. In one of their projects they helped coordinate Financial News Network's travel arrangements for a news special on Eastern Europe.

Infinity also has two full-time Soviet employees - Yuri Seminov and Oleg Kazan - that booked hotel rooms, hired translators and took care of other details for the FNN project. Seminov and Kazan are paid in rubles as mandated by the Kremlin, but also receive U.S. products such as shaving cream and Reeboks.

Although Miller and Zimmerman travel frequently to the U.S.S.R., they stressed that the Soviet employees take care of "hands on" details and can keep a vigil on their projects. "Sometimes its important just to call a company or a ministry to make sure the project is on schedule," said Miller. Seminov also does more difficult chores such as driving with his own car to a watch factory to pick a up a shipment of watches and deliver them to the airport.

AIE and Infinity keep their expenses low when they travel to the U.S.S.R. by maintaining a ruble bank account and an apartment in Moscow. They pay for many items in rubles and avoid the $100 to $150 per night cost of hotel stay in the city.

Another joint project is an effort to contact U.S. advertising firms and pitch the opportunity to film client commercials in the Soviet Union. "Pepsi has already shot several commercials in the U.S.S.R. ...," Zimmerman explained.

Recent political upheaval in the Soviet Union and Eastern Europe has created potential customers for U.S. companies, but it has caused confusion for Zimmerman and Miller when they try to obtain the proper bureaucratic approval.

"In the past, you knew which bureaucrat to contact. People held the same position for 30 years and when one of them said no, it was a resounding no," said Zimmerman. Because of great turnover, Zimmerman said she recently asked an official is he was authorized to make the decision. The official was embarrassed, but asking the question was better than wasting time talking to the wrong official, she said.

Because of the current state of confusion, two Los Angeles-based radio networks - Westwood One and Radio Express - received approval to broadcast radio shows in the Soviet Union featuring American pop music hits. Westwood One spokeswoman Karie Garber said that her company's programming is different than Radio Express's because "our shows are original and written especially for the Soviet market. They are not just a translation of existing shows."

A Radio Express official would not discuss the details of his company's Soviet broadcasts at the time. "In two weeks, I will be willing to talk about it," he said.

Norman J. Pattiz, chairman and CEO of Westwood One Inc., began negotiating the contract when he attended a Moscow conference of Soviet and American Communicators in late 1988. An agreement was reached over a year later, on Jan. 16, 1990, to broadcast three programs with advertising from both European and American companies between Westwood One, Gosteleradio, the Soviet Union's state radio and television broadcasting system, and Story-First Distribution, the largest distributor of Western entertainment products to the U.S.S.R..

Begun the first week of February, USA Top 20 will be presented two Sundays a month and America on Record and American Musical Classics the other two weeks each month.

The response to USA Top 20, hosted by U.S.-born 26-year-old Stuart Detmer, has been enthusiastic as "600 to 700 Soviets ranging from teenagers to doctors and lawyers wrote positive letters," according to Richard Rene, manager of international affiliate relations department for Westwood One, parent company of the Mutual Broadcasting System and the NBC Radio Network.

Rene agreed that the trick to doing business in the Soviet Union is getting access to the correct minister and the network's efforts in the country have been in education on "how to and how not to conduct business in the Soviet Union. Westwood One knows how to conduct business in 37 countries and operates 350 stations worldwide."

Westwood One will split the advertising revenues with the Gosteleradio, but Rene said the network is still in the process of selling advertising. Armed with the enthusiastic response, Rene hopes to find U.S. and European companies that want to increase their brand recognition among the U.S.S.R.'s 280 million citizens.

Soviet companies also want to improve their image in the United States. To achieve better publicity, Mostfilm, the largest Soviet film producer and distributor, recently hired a Beverly Hills-based public relations firm, Dennis Davidson Associates Inc., to handle their international publicity.

The representation agreement was signed in February between Vladamir N. Dostal, deputy chairman of the State Committee on Cinematography of the U.S.S.R. (Goskino), Morton Segal, Dennis Davidson, vice chairman, and Anatoly Fradis, president of AFRA Film Enterprises, a Beverly Hills company that represents Mosfilm.

Zimmerman said these types of deals are now possible because Mosfilm was given autonomy by the Soviet government to cut their own deals a year ago. She added that foreign companies producing Russian historical movies will have the most interest in filming in the Soviet Union, otherwise the cost of transporting crews and equipment would not make the project cost effective.