Russian producers to slash costs

Crew, talent fees to bear brunt of cut-backs

MOSCOW — Russian film and television producers are calling for cuts of up to 50% in crew and talent fees in an attempt to stay afloat as the global recession bites.

At its first policy meeting, the Association of Film and Television Producers (AKT), a new industry grouping founded earlier this month, recommended that members halve fees in upcoming projects for most crew members and actors.

AKT, which brings together 19 of Russia’s most powerful production companies, including Central Partnership, Amedia, Mostelefilm, Lean-M, CTB and Profit, believes that only urgent and drastic action can save companies from collapse as key buyers — Russia’s powerful national television channels — slash what they are prepared to pay for content in the face of sharp falls in advertising revenue.

Igor Tolstunov, head of production company Profit and co-owner of Russia’s annual national film festival Kinotavr, said that profit margins on television serials had shrunk from between 50%-100% five years ago to just 10-15% today.

As television content buyers push for further reductions in prices, producers faced serious losses unless they sharply cut crew wages that accounted for around half of all production costs, he told business daily “Vedomosti” Monday.

Negotiating the rate cut will be up to the discretion of individual members of AKT and was not obligatory, Tolstunov said.

Industry insiders say the cost-cutting edict is unlikely to be applied across the board with top actors and directors of photography likely to be able to ring-fence earnings.

Yevgeny Gindilis, general producer of Moscow’s TV Indie Film Production — which is not a member of AKT — suggested the big production companies only had themselves to blame for wage inflation in recent years.

“The companies that are the biggest players are most responsible for the salary hikes we have seen recently. They were paying bigger and bigger sums to get the people they needed. It is going to be very difficult for them to negotiate it back,” he told Variety.

Gindilis, who is in production on a $1 million social drama by Vladimir Kott, “Gromozeka,” and wrapping principal photography in Minsk, Belarus on a 15-episode series for NTV, said he planned to reduce crew rates by a third in the coming year.

“Most of our people understand the need for this; we are on good terms with our crews and directors,” Gindilis added.

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