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RUSSIA EXHIBS BLUE

Two years after the effective end of Hollywood’s Russian blockade and the appearance of a handful of big distribs bringing Western product into the local market, there’s not much joy to be heard from those involved in the Russian exhib scene.

Russia, formerly one of the great cinema-going nations, is not responding with much enthusiasm to its new choice of product.

And although Russian stats should be taken with a pinch of salt, they do speak volumes: From close to 250 million ticket sales a year in the mid-’80s, 1994 saw a drop to just 11 million. The average cinema capacity in Moscow is 8%, and the figure is fractionally higher in other cities.

But all this could be set to change. Paul Heth of Golden Ring Entertainment (a U.S. company operating for three years in Russia) revealed that Moscow’s first purpose-built screen (i.e., originally meant for cinema), fully equipped to U.S. standards with merchandising to match, should be opening its doors on central Moscow’s Tverskaya Street by October. A single-screener with a 650-seat capacity, it is due to be followed later by a multiplex, built from the ground up on an adjacent lot, with eight to 10 screens and a seating capacity of 3,200.

Backing for this project, according to Heth, will be coming from a major Hollywood studio and one of America’s Fortune 500 companies, one with extensive Russian interests already. Heth estimates costs on the single-screener at several million dollars, while the multiplex will at least match costs for such a project in the U.S.

With no time for the skeptics, Heth sees this as the only step forward for the Russian exhib scene. “This is potentially the most profitable new market in the world, bar China,” says Heth. “We fully expect Russia to follow the patterns of cinemagoing which we have seen follow through the U.S. and Europe.”

His argument makes a lot of sense: Existing cinemas are largely run-down, un-modernized buildings that fail to attract an audience more seduced by VCR technology and convenience. On the other hand, Russia’s nouveaux riches – concentrated in the big cities – have one of the world’s highest leisure spending track records.

Give consumers a choice of the best new films (something that existing distribs haven’t always done, releasing pics from as long as two years ago), plus the chance to visit one of the two on-site restaurants or buy the merchandising, Heth maintains – and presto, a new stage of the film business here is under way.

Golden Ring has the experience to back up this belief, having run Russia’s only other comparable venue, Moscow’s Americom House of Cinema, for a year. Despite this not being a purpose-built cinema (it’s the conference hall of a major Moscow hotel) and playing films in English with Russian earphone translations during weekends, Golden Ring has been selling 6,000-8,000 tickets a month, 65% to Russians, at a high $8 apiece.

At the new screen, Heth predicts 7,000-10,000 ticket sales a week at $4-$5, slightly higher than the $2-$3 price which is already standard for Moscow.

Otherwise, the Russian exhib market lacks coordination – when distribs do get together, they’re more preoccupied with the piracy fight than with the idea of, say, promos. Center-city screens are the only ones with a chance, with low figures for car ownership making out-of-town multiplexes an idea of the very distant future.

With the cost of P& A high in proportion to possible earnings, there’s a tendency to spread a smaller quantity – 50 or 60 prints, at most – around the country over a longer period.

Plus the Russian calendar has one intrinsic disadvantage – the summer months are a virtual close-down period, as city populations head for their dachas.

Although the new influx of product has come from the West, there’s no intrinsic preference for it. Russian audiences still enjoy home fare when it’s good enough. Nikita Mikhalkov’s “Burnt by the Sun,” although it’s hardly been in general release, was filling houses at the 1,000-seater Kinocenter.

The real factor governing Russia’s exhib scene is obviously the recovery of the economy. Until disposable incomes rise, improved facilities like Golden Ring’s will be attracting only the more privileged.

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