Berlin: Russia Looks to International Market to Counter Local Woes
A weakening domestic market and slumping ruble has Russian companies hoping for international sales, in hard currency, to prop their business.
"EFM has been successful for us," says Dmitry Litvinov, general director of sales company Planeta Inform. "We closed some deals for Mafia and QuackerZ 3D, we pre-sold Ice Breaker and Death Dances to France, and we also sold Crew to a number of key territories, which we can't yet disclose higher than the estimates were."
Despite a weak economy and soft ruble, Russian companies were out in full force at Berlin’s European Film Market over the past week.
The number of Russian production companies, sales agents and distributors attending was up 20 percent to 51 this year, Yekaterina Mtsitouridze, general director of Roskino, a state agency in charge of international promotion of Russian films, tells The Hollywood Reporter. Sellers were looking for international sales to help offset local movies' poor box-office performance at home and a weakening ruble.
"To some extent, this is a consequence of the overall economic downturn” in Russia, Mtsitouridze explains. "Many have come to a realization that sales to international territories could become an extra revenue source, as long as you take it seriously and prepare well."
As the national currency, the ruble, continues to fall against the U.S. dollar and the euro, a reflection of ongoing malaise in the Russian market, international sales, with their promise of hard currency payoffs (all international film rights contracts are in dollars or euros) become more attractive.
Right now, Russian film companies need that sort of cash.
The share of the Russian box office going to local films has fallen for two years running, to 16.4 percent last year from 17 percent in 2014 and 19 percent in 2013. The total gross of Russian films last year fell 4.5 percent to 48 billion rubles ($768 million). But over the same period, foreign sales of Russian movies was up 11 percent in ruble terms to 450 million rubles ($6.2 million). The increase was entirely due to the ruble's fall against other currencies. In dollar terms; sales actually fell from $7.1 million in 2014.
The main territories hungry for Russian movies are China, South Korea, the Middle East and Eastern Europe. International distributors in Berlin typically buy Russian movies before they are released locally.
With recently completed projects under their belts, Russian sellers hoped to achieve strong foreign sales in Berlin.
Traditionally, Russian animation has been doing well internationally. In Berlin, sellers had big hopes for such animation fare as adventure comedy Kryaknutye kanikuly (QuackerZ 3D) and a new installment in the international franchise Kikoriki, Legenda o Zolotom Drakone (Legend of the Golden Dragon).
The $12 million-budgeted, English-language QuackerZ 3D was conceived as an international project from the very beginning. Produced by Russian animation studio Rome and distributed internationally by Planeta Inform, it was co-financed by Chinese company Star Alliance, while animation studios from Canada, Spain, Estonia and Peru also were involved in the production.
In Berlin, the company screened the final version of the film for the first time, a spokesperson for Planeta Inform, which represents the movie, tells THR. "We hope to finalize deals for several key territories, such as Latin America, Germany, France and Great Britain," the rep adds.
The film has already been sold to the U.S., South Korea, Israel and the Baltic States. Planeta Inform is also representing Ledokol (Ice Breaker), a new movie from producer Igor Tolstunov, known for 2012 disaster movie Metro, which was sold to many foreign territories.
Legend of the Golden Dragon is the second feature film in the Kikoriki franchise, better known internationally for its TV series, which aired on The CW in the U.S. under the title GoGoRiki.
"We have received offers from several distribution companies," Dmitry Rudovsky, the film's producer, tells THR. "Estimates are high, in the vicinity of $5 million."
Meanwhile, some live-action movies offered by Russian sellers at EFM this year, including disaster film Ekipazh (Crew) and sci-fi/action pic Mafia: Igra na vyzhivaniye (Mafia: Survival Game), are also seen as having promise.
Centered around the card game Mafia, Mafia: Survival Game has already been sold to some international territories, including France, Germany, China, Japan and South Korea.
Crew is a remake of a 1979 film of the same title, which was one of the Soviet era's most commercially successful movies. It tells the story of pilots who save the passengers of their flight following a disaster in a small town in the mountains.
"The most up-to-date technologies were used in the production, including cutting-edge Imax digital cameras," Vadim Vereshchagin, deputy general director for distribution at the movie's production company, Central Partnership, tells THR. "Prior to Crew, they were only used on Transformers' fourth installment."
According to Vereshchagin, the movie will be available in Imax 3D, 3D, Dolby Atmos and 4DX formats, which are very popular in Latin American and Asian territories.
"Certainly, the most current visual effects are vital for a movie of this genre, and they won't be inferior to U.S. analogs," he adds. "The plotline is universal; it doesn’t have cultural links to a specific territory, which is also a serious competitive advantage."
Still, some say there's a long way to go for Russian producers and filmmakers before they establish a steady international presence.
"Unfortunately, Russia's film industry has not yet reached a level of stable presence in international markets," syas Mtsitouridze. "One or two films could be successful in a specific year, and then there could often be a pause of another year or two."
Russian companies are just beginning to establish a presence in international film markets, so it's hard to know which region is their largest market, but Berlin is very important for the country's companies, sources said.
According to Mtsitouridze, there is potential international interest in Russian cinema, and it is up to producers and filmmakers to come up with projects that could be in demand abroad. Her advice: ”Russian producers need to work more closely with international distributors and sales companies, consulting with them before launching a project rather than when a film is already completed.”