Disney, Sony team up for Russian content
The arrival in Russia in January of the Walt Disney Motion Pictures Group -- as part of a new direct distribution partnership between Buena Vista International and Sony Pictures Releasing International, which will handle Columbia TriStar titles -- marks a new milestone in the evolution of the film industry here, where United International Pictures and 20th Century Fox also now have Moscow offices.
Although primarily a move to take advantage of the booming Russian distribution market, Disney also sees it as an opportunity to acquire and co-produce local content to supplement U.S. product, according to Mark Zoradi, president of the Walt Disney Motion Picture Group.
"We are currently open to both acquiring and distributing other locally Russian made movies and are looking to co-produce local content in the coming year," Zoradi said.
"I would like nothing better than to see locally-made Disney-branded films (released in Russia)," Zoradi said, adding that Disney had already "started talking" to Russian creative talent with experience in both animation and live action.
The BVI/SPRI joint venture-- the 15th internationally between the two distribution companies -- reflects the growing maturity of a fast-growing market that has seen domestic boxoffice receipts spiral from about $120 million in 2002 to an estimated $400 million this year, with predictions for a billion-dollar market being achieved around 2010.
"There was no specific trigger (for the decision to go into self-distribution in Russia)," Zoradi said. "We are constantly looking at the growth markets of the world and when it makes sense, we believe that going into self-distribution can generate greater potential. There was a great desire by the wider Walt Disney Co. to enter Russia. Boxoffice is growing significantly and there was the desire to develop the Disney brand in Russia."
The distribution joint venture -- something BVI and SPRI have successfully set up in Mexico, Brazil, Thailand, Singapore and the Philippines -- is designed to make the best use of combined corporate management, sales and back-office skills while allowing separate marketing and promotion teams to best place the two companies' respective titles with exhibitors.
Market positioning began in earnest earlier this month when Zoradi and other joint-venture executives flew to Russia to present the cream of the 2007 release slate to more than 500 Russian exhibitors at a Moscow industry trade fair.
The 26-minute show reel, which highlighted such titles as Disney's "Pirates of the Caribbean: At World's End" and "Rattatouille" and Columbia TriStar's "Ghost Rider" and "Spider-Man 3," was designed to whet the appetite of cinema and multiplex manager on the eve of what promises to be another boom year in Russian distribution and exhibition.
The arrival of the new kids on the block is a development that local producers and distributors already are watching with interest.
"The Disney/Columbia TriStar approach in launching its theatrical distribution business is different to that of its rivals (UIP and Fox), who just changed the signboard of their licensed distributors to their own names," said Armen Dishdishian, vp (international) at Moscow production and distribution house Central Partnership.
"The decision to create a joint venture for theatrical distribution in Russia has pros and cons. Economies of scale will save some money in media buying and a combined product lineup will afford greater market power in booking films in theaters. But although marketing and promotion for each companies titles will be handled separately, there remains a risk of conflict of interest in Russia -- especially when the two studios plan to release their anchor projects in the U.S. at the same time. The kind of booking compromise in Russia that will have to be made then remains unclear."
His concerns are echoed by Alexander Semenov, publisher of influential magazine "Russian Cinema Business Today."
"Russians have their own tastes and preferences. Do they love American comic books in Russia? I dare say: 'No!' Until recently, no one had even contemplated the existence of a character named Batman and children had never seen Spider-Man or Superman in printed matter," Semenov said, adding that "Batman Begins" and "Superman Returns" flopped at the Russian boxoffice, taking $1.4 million and $1.9 million respectively, partially because of a lack of advertising.
The Russian distributors of "Spider-Man 2" took note, he said, and "didn't skimp" on an advertising campaign that eventually helped the movie make an impressive $9.35 million at the Russian boxoffice.