Market hard hit by fiscal crunch

Russian film buyers are warning international sellers to reduce prices or face a bleak market at Berlin.

Thin business last November at the American Film Market — where prices for foreign rights remained at prefinancial-crisis levels, according to buyers — suggests Russian business may be slow at the European Film Market.

“Sales agents still do not seem to understand that the Russian market is now in the grip of a serious crisis,” says Armen Dishdishian, VP, international, at Moscow production and distribution shingle Central Partnership.

“We did not buy anything at AFM. We stuck with the prices we were willing to pay. We reminded sellers that we had supported their minimum guarantees during the growth of the Russian market and now it was time for them to support us, but that message does not seem to have gotten across.”

With television sales accounting for some 65% of minimal guarantee returns in the past — and DVD and exhibition making up the rest — the slump in TV sales means Russian buyers simply cannot afford to pay foreign sellers the kind of minimum guarantees they are demanding, Dishdishian adds.

Although exhibition remained healthy in Russia — where $830 million went through the box office in 2008 — most of the money went to U.S. and Russian blockbusters.

Other Berlin market regulars agree that international sellers need to wake up to the Russian economic reality, where unemployment — already at 6% (4.5 million people) — is growing and film crews are facing pay cuts of between 30% and 50% by producers seeking to cut costs.

“I buy very few films because of unrealistic expectations and rude behavior of foreign sales agents,” says one regular EFM participant. “They think that all distributors have mad money which falls from the sky and do not understand that most films demand huge work and do not recoup (in the Russian market).”

It is not all doom and gloom: Indie distributor Sam Klebanov of Moscow’s Kino Bez Granits (Cinema Without Frontiers) is coming to the market with his debut as a feature-film producer, “Newsmakers,” a Russian-language remake of Johnnie To’s 2004 “Breaking News”; it’s directed by Sweden’s Anders Banke and features some of Russia’s top movie stars. Pic is skedded for an April 16 release in Russia. Klebanov, who co-wrote the screenplay, says: “There is already a lot of interest from international sales agents, and we shall be bringing a promo reel with us to Berlin.”

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