Russia should spend $193 million to convert to digital exhibition to save the local film industry from the worst effects of the worldwide recession.
That’s the opinion of Oleg Berezin, head of St. Petersburg-based research company Nevafilm, speaking at the second Russian motion picture industry confab in Moscow on Wednesday.
He warned that rising prices, a demographic time bomb that will soon see a 40% drop in the size of the core 14-25 age-group audience, and plunging Russian spending power as the economy worsens, threaten the industry.
The worst of the pain could be averted if industry and government worked together to create a nationwide network of digital cinemas to slash distribution costs. “We are faced with an economic crisis, but an even greater crisis is the lack of development all around Russia of digital technology,” he added.
Switching to digital could halve distribution costs for prints that cost an annual $60 million in Russia and increase the opportunities for domestic films. Russia has only around 80 digital screens and releases fewer than 29 domestic digital features a year, whereas 80% of releases by the Hollywood majors are available digitally.
Industry leaders were skeptical. Igor Ilchuk, general director of exhibition network Karo Film, which has 33 cinemas, told Daily Variety that in the current economic climate the idea was unlikely to get off the ground.
“We planned to open 38 new screens in 2008 but only opened three; we’ve put off the opening of two near-complete new cinemas until the spring. Overall box office in 2009 is likely to remain in real terms at 2008 levels — around $860 million — and may even drop,” Ilchuk said.
If enough of the Hollywood majors, or WB, whose product Karo Film distributes in Russia, insisted on going digital it would “happen overnight” but not before then, Ilchuk added.