Indie pics endangered species on Russia TV

Price for such features' distribution rights increases

MOSCOW -- With television sales faltering, Russian distributors of Hollywood indie titles are finding it increasingly difficult to strike rights deals in the territory.

TV sales have long accounted for the lion's share of the revenue local distributors derive from Western independent films, but while the price for an indie feature's distribution rights in the territory has steadily gone up, the prices offered by local stations are plummeting.

The cost of an independent feature's distribution rights rose from roughly 1% of its budget in 2004 to 5% in 2008, according to Armen Dishdishyan, vp international at Central Partnership, Russia's largest indie film producer and distributor.

But even 5% was considered a fair price for Russian distributors, who were able to turn a profit thanks to TV sales, even if a film's boxoffice performance wasn't impressive. "A year ago, sales of television rights helped a lot, bringing in 50%-60% of a distributor's revenue from a film," Dishdishyan said.

When the global financial crisis broke out, things changed. In the new year, major TV stations have slashed their rates for film rights by 30%-60%. But the new, reduced rates haven't meant an increase in the number of titles being purchased. In fact, Dishdishyan says that stations are actually getting choosier, increasingly taking only high-profile movies. Other distributors of Hollywood independent fare agree.

"In the last six months, dealing with TV channels has become increasingly difficult," said Gevorg Nersisyan, head of the Paradiz group. "Now they only want highly publicized major studio projects, rejecting many other movies."

Nersisyan adds that, in response to the current situation, his company plans to reduce the number of foreign independent movies purchased for Russian distribution from last year's 25 to about a dozen in 2009.

"We'll even have to speak with the studios about revising deals already struck," Nersisyan said.

Dishdishyan agrees that the shifting financial landscape could see some deals falling apart.

"Russian independent distributors have to work together with their foreign partners, looking for a way out of this force majeure situation," he said. "Under current circumstances, keeping their obligations with the studios -- just the same as failing to do so -- could put smaller Russian distributors of independent Western fare out of business."
comments powered by Disqus