Russia’s still the hottest place on the planet — at least to the global exhibition biz.
International distribs, who saw significant declines last year in key European markets such as France, Germany and Spain, think of Russia these days with nothing but warmth and affection.
Admissions have risen 13-fold since 2000, growing by 33% in 2004 and 34% last year. One government forecast has pegged Russian box office, which amounted to a mere $25 million in 2000, hitting $650 million annually in 2010.
“Russia’s the leading growth market by far,” says Veronika Kwan-Rubinek, Warner Bros. prez of international distribution. “And it’s not slowing down.”
Craig Dehmel, Fox Intl.’s VP of sales and strategic planning, agrees.
“In Russia, the growth is coming as fast they can build new multiplexes and is held back only by the speed of construction,” he says. “It really is remarkable to still see it. Even with rampant piracy, people are still going to the movies, which shows that the DVD business is pretty small and that moviegoing is very relevant to Russian contemporary life.”
BVI prexy Mark Zoradi notes that the distrib’s found impressive traction among Russian audiences in two key genres — animated fare such as “Chicken Little” and action pics such as “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe.”
Luckily for Hollywood studios, Russia’s not the only one. Kwan-Rubinek points out that Ukraine, with 47 million people, has “tremendous” long-term potential.
An eclectic mix — China, Mexico, Poland, South Korea, Turkey, the United Arab Emirates, Venezuela and Vietnam — is also cited as the current key territories for expansion.
“What makes these markets work is an emerging middle class and an improved infrastructure,” Zoradi notes. “And for us, these markets are a great opportunity to expand the Disney brand with films like ‘Narnia’ and ‘National Treasure’ so it covers more than just animation and younger-skewing films without bad language or gratuitous violence.”
Korea emerged as a particularly strong market for U.S. tentpole action pics. It was by far the top foreign market for “The Island” and “Mission: Impossible III”; “Poseidon” drew nearly $2 million on opening day.
Kwan-Rubinek notes that Korea’s become enough of a factor for the distrib to tailor a specific marketing campaign for that territory, leaning heavily on action scenes, with a focus on the most perilous situations for the film’s characters. And she says Warners has fine-tuned the extensive “Poseidon” push in offshore markets by highlighting that such scenes are available via the Internet.
China’s also a pulse-quickener for distribs, which have seen solid response to pics like “Poseidon” and “Eight Below” amid the still-rigid rules on access that left UIP’s “Mission: Impossible III” in limbo for a while due to concerns about how Shanghai is portrayed.
“Long term, there’s a lot of investment in China, but it’s going to take a long time to really pay off with all the government control,” Dehmel says.
Kwan-Rubinek sees excellent potential in Vietnam. “It’s a very underserved market where there’s a tremendous appetite for Western films,” she says.
Dehmel points to Venezuela as a strong contender for future exhibition growth. “It’s a bit of a risk to invest in the infrastructure, partly because it’s tough to get your money out, but there’s a growing middle class, which is the key,” he says.
For David Kosse, Universal’s international marketing and distribution prexy, Russia and China are the key emerging markets.
Kosse is less optimistic about China, given the twin hurdles of the 20-pic limit and censorship. “It’s all fairly stand-still right now without a lot of positive movement,” he admits.
Kosse asserts that the challenge in Russia consists of finding ways to expand the tastes of moviegoers via such strategies as bringing “Nanny McPhee” cast members in for a promo visit last March. “We’re hoping that we can broaden what appeals to Russians in such areas as live-action kids films,” he adds.