Homegrown hits taper off as Hollywood prevails

Hollywood movies are likely to enjoy another bonanza year at the Russian box office in 2011 as U.S. fare continues to dominate local screens.

Russian films accounted for just 14.5% ($154 million) of the country’s $1 billion box office in the past year, and there’s a dearth of big-budget local projects on the slate for the coming year, priming the territory for Hollywood domination.

“Russian films did poorly this year, mainly because there were fewer films produced thanks to uncertainty around a new system of state film finance,” Alexander Semenov, publisher and founder of Russian Film Business Today, says.

The new system, which channels $64 million — the lion’s

share of state support for feature projects — through eight major production companies, brought a major upheaval to a country where smaller independent producers had become accustomed to regular handouts.

The thinking behind the new system — which won the backing of Russian prime minister and former president, Vladimir Putin — was that independent producers would pitch projects to the “big eight” companies and production decisions would be made by professionals, not bureaucrats.

That does not seem to have happened so far and it remains unclear whether the money, to be doled out through the ministry of culture, has actually started flowing yet.

What is clear is that the box office receipts of local films, having reached 26% in 2006 and staying relatively stable through 2009, fell back steeply last year.

Figures for movies that grossed more than $10 million in Russia — a litmus test of box office power — collated by Russian Film Business Today show that in 2006 three Russian films hit or exceeded that target; 2007 saw two pics hit that milestone; 2008 had three and 2009 had five, including “Inhabited Island,” which took in just over $20 million.

This year, ironically, five Russian films scored more than $10 million, with “Nasha Russia: Balls of Fate” — a franchise film based on a hugely popular TV comedy show — taking more than $22 million, but the share of box office receipts dropped from 24% ($176 million) of 2009’s total gross of $736 million to 14.5% ($154 million) of the 2010 figure of just over $1 billion.

The big winners were Hollywood movies: “Avatar” grossed $116 million, “Shrek Forever After” took $51 million and “Alice in Wonderland” $42 million in a market where the box office year runs through the end of November.

This holiday season, just three releases are by Russian directors, including Andrei Konchalovsky’s $90 million “The Nutcracker in 3D,” a U.K.-Hungarian production that bombed at the U.S. box office where it was released Nov. 28, grossing just $160,000 to date.

“We think Russia’s share of the coming year’s box office — which should not be lower than $1 billion — will be around 15%-17%,” Semenov says. “But the big winners will be American movies, which the Russian public still flock to see.”

Some Russian producers are beginning to look at co-productions, with many smaller independent producers seeking funding in Europe and neighbor Kazakhstan, where the main state-owned studio is undergoing a major modernization program.

Alexander Rodnyansky, one of Russia’s leading independent producers — whose AR Film is not one of the “big eight” receiving state funds — believes that the Russian film industry needs to forge a new strategy that embraces co-productions.

“It is not the question of financing; it is a question of a finding a strategy that can transform Russian filmmaking into a healthy working business,” he says. “At the moment the Russian market has no international dimension, filmmakers have to rely only on domestic theatrical receipts and television sales. Co-production is the only viable option today.

“We need to make films that would appeal to both Russian and world audiences,” Rodnyansky says.

The next two major releases of his AR Films are both European co-productions: drama “Elena,” directed by Andrei Zvyagintsev and produced with French company Pyramide; and Chernobyl nuclear disaster film “V Subbotu,” directed by Alexander Mindadze, made in conjunction with Germany’s Bavaria Film.

Rodnyansky — who produced the two-part, $30 million local hit “Inhabited Island” (a truncated version of the film, titled “Prisoners of Power,” gets a U.S. release early next year) — is in pre-production on 3D WWII drama “Stalingrad,” due to begin shooting next year.

The film, which will have an international cast rumored to include Germany’s Til Schweiger as a German officer, will be shot in both Russian and English to give the film a better chance at international sales.

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