Russian box office broke through the billion-dollar barrier in 2010 and is destined never to look back, forecasts by industry experts suggest.
As the country’s exhibition network continues to grow and modernize, audiences show no sign of losing their taste for top Hollywood films, which are increasingly dominating a market that is now the world’s sixth largest.
Moscow-based analysts Movie Research Co. (MRC) forecast a 70% surge in box office receipts in the next five years to an annual 54 billion rubles ($1.8 billion).
The increase in ticket receipts will come on the back of a rise in modern cinema screens from 2,400 to 3,000 and higher admission prices — forecast to grow 45% to an average of $9.
Audiences are growing — 2010 marked another landmark, when 160 million admissions were recorded, the first time more tickets have been sold than the country’s entire population of 140 million.
But the core cinema-going public is still just 10 million strong, and consists mainly of 17- to 25-year- olds.
That’s good news for distributors and Hollywood studios, but there’s a downside to the long-running boom: the share of Russian movies is dropping and major changes to the country’s state film support system have left many producers and independent filmmakers out in the cold.
The old soft money system — largely dating back to Soviet times — when directors and producers pitched projects for funding directly to a state film commission, has gone.
Deemed unwieldy and riddled with corruption, the Kremlin has replaced it with a system that parcels out around $68 million directly to eight leading production companies.
Designed to support culturally important projects that reflect that history and character of the Russian nation, the system is supposed to encourage trickle-down — and the farming out of projects to other producers who do not directly receive funds.
But many of those left out on the cold see no sign of that working, and are warning that Russian cinema is on the brink of collapse.
For a boom that began on the back of the huge success of homegrown movies such as 2004 sci-fi thriller “Night Watch” (Nochnoi dozor) — the breakthrough project for director Timur Bekmambetov, now a leading Hollywood figure — and earlier groundbreakers, such as the two “Brother” mafia movies from iconoclastic director Alexei Balabanov, there is some irony in the recent decline of Russian films at the local box office.
Last year local movies accounted for just 15% marketshare — half the figure they were scoring just a few years ago. Russian pride was saved somewhat at the end of the year when Bekmambetov ensemble-comedy “Yolki” (Christmas Tree) took more than $21 million, breaking a ceiling previously achieved by a Russian film five years before.
Alexander Rodnyansky — a leading producer who was not among the top eight to receive government funds — thinks the funding system is probably better than its predecessor, but believes it fails to recognize structural changes in the international film business that, if ignored, could spell disaster for Russia’s domestic output.
“The major problem now is that the market pushes only event movies, and the market is unable to provide for the possibility of recouping investment for homegrown dramas and genre projects,” Rodnyansky says. “The market is driven by a young audience who prefer U.S. action movies, sci-fi, comedies. To put on a Russian film that can compete with that demands huge budgets.”
For those that enjoy state backing, money is rarely an object: Andrei Konchalovsky’s $90 million “The Nutcracker in 3D” was backed by state-owned Vneshekonombank to the tune of $61 million.
For Rodnyansky the only answer for most producers is to seek international partners.
“Russian movies are doomed by the fact that we need to explore the international market but we don’t have producers with the right kind of experience. Production companies need to learn a lot to be part of the international system.”
Rodnyansky — who produced “Inhabited Island,” a $40 million adaptation of a classic Soviet sci-fi novel that gets its U.S. release this year — is taking his own advice.
Although his current projects are Russian language (including “Innocent Saturday” by Alexander Mindadze about the Chernobyl nuclear accident — and which is in competition at the Berlinale) his next major project, Fedor Bondarchuk’s “Stalingrad,” will be shot in English and Russian and feature an international cast.
Others within the country agree that the Russian film industry’s future is in aligning more closely with international values.
Yuri Sapronov, head of Russian World Studios, believes that changes to the soft money system are unlikely to fundamentally affect an industry where a Hollywood-style production system has still not emerged.
“Only producing the content that meets the needs of the audience can bring people to the cinemas,” Sapronov says.
“Today the Russian film industry lacks the experience and know-how to produce such films.”
Rather than directly subsidizing producers, he says the Russian government should “create the right legal and economic environment for the business.”
Measures to encourage the U.S. majors to reinvest money made at the Russian box office into the local industry, tax breaks and more training for crews and other technicians could help create a transparent world-class film industry.
As a model for this, Sapronov points to the rapid development of the Russian television industry in the 1990s — when money for commercials was “literally transported in bags” — to the mature, stable market it is today.
One thing is sure: change must come if Russian film as an entity independent of state support is to survive.
One industryite says the situation was at its worst since the collapse of communism 20 years ago.
“The situation with Russian cinema is dreadful; ordinary people do not want to see clever films and the work of edgy, creative directors like Alexei Balabanov are never shown at the top international festivals. I’ve never felt so pessimistic in my entire career,” says the source, who preferred to remain anonymous.
More from Berlin Daily Spotlight: Russian Cinema
• Russians hoping for a Berlin boost