Rolling in the rubles

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MOSCOW --This year, Russian boxoffice returns are on target to hit the half-billion-dollar mark, with local producers set to reap about one-third of that for local product. To put that in perspective, in 2001 the industry took in just $2 million of a $65 million market.
The Russian film industry's bull market has been a long time coming, bouncing back after a bearish decade in the 1990s during which it looked like it might never recover.

Ironically, the collapse of a long-running international TV spending spree was just what the film industry needed to gain momentum. The fourfold collapse of the ruble against the dollar in August 1998 killed a trend to buy Hollywood movie packages and U.S. shows such as the soap "Santa Barbara" and NBC's "ER," which were then dominating TV schedules.

Forced to go back to cheaper local product, TV executives turned to the country's legion of underemployed film industry technicians and talent, and the rebirth of the Russian film industry began.

For wannabe producers and directors, the change of tide was a stroke of luck that few were able to predict.

Timur Bekmambetov, director of a pair of Russian megahits, 2004's "Night Watch" and 2006's "Day Watch," did not have a film background but had simply reinvented himself as a TV commercial helmer.

Bekmambetov, now shooting the thriller "Wanted" in Prague with a cast that includes such Hollywood hot properties as Oscar-winners Morgan Freeman and Angelina Jolie and fast-rising British star James McAvoy (2006's "The Last King of Scotland" and February's "Starter for Ten"), fondly recalls an era when there were few rules governing Russia's nascent film sector.

"I grew up in Guryev, a town in Kazakhstan that straddles the geographic border between Europe and Asia," he says. "Later, living in Moscow during the crazy days of the 1990s when it was just enough to declare that you were a banker, a gangster or a film director to, in fact, become one, everyone had to cross and recross lines and barriers that most people in more stable societies barely even recognize. Some people could not cast off their Soviet character and were drowned in the swift and dangerous currents of the times; others simply reinvented themselves."

Called to the colors by desperate Russian TV executives, Bekmambetov and others flooded to telefilm projects and, though hard to tell at the time, Russia's movie market began to gather steam.

The figures speak for themselves: In 2001, Russian producers took that $2 million of the overall $65 million boxoffice from 39 movies; by 2003, the boxoffice share for the 40 Russian movies in distribution was $8.3 million of $190 million.
Things began to really click in 2004, when 51 local movies took in $32.5 million of the overall boxoffice of $268 million. By last year, 59 Russian titles grossed $117 million of the $455 total boxoffice, representing a 25.7% market share.

Had even one other Russian film done a fraction of the business of the year's No. 1 grosser, "Day Watch," the numbers would have been even more impressive, says Alexander Semenov, publisher of the influential weekly industry glossy Russian Film Business Today.

"Bekmambetov's movie, the second in the 'Watch' franchise, single-handedly grossed nearly $35 million, and during the first half of 2006 that figure -- plus other domestic movie takings -- actually accounted for upward of 45% of boxoffice," Semenov says. "Although the situation changed with the summer Hollywood releases, the figures still demonstrate the remarkable return of Russian film in a market that is now on course for reaching overall boxoffice of $500 million-$520 million by the end of 2007."

Chart-topping figures for the period of Dec. 1, 2006-Feb. 25, 2007 demonstrate how powerful local product has become. Three movies opened head-to-head Dec. 28: two Russian films -- the prehistoric fantasy movie "Wolfhound" and the comedy "Zhara" -- and the Hollywood release "Night at the Museum." They immediately took the top three spots and refused to budge for weeks.

Of the three, "Museum" came in third, with $12.9 million on a 455-screen release during a peak holiday period.

While the numbers look good and certainly reflect the strength of the local industry, Semenov echoes the caveats of many in Moscow when he warns against overconfidence in local product.

"The number of Russian movies produced is growing, but the number on release is actually dropping," he says.

Indeed, of some 200 local films made in 2006, only 59 were actually released; in 2005, fewer films were made, but 62 Russian movies made it to the screen.

This is partially due to limits on the sheer number of screens available for Hollywood and local product -- distributors must compete to get their product into just 1,100 modern screens across Russia, and local films, despite the appetite of audiences, are up against stiff international competition.

Semenov cautions that while not every Russian film can be a blockbuster on the same scale as "Night Watch" and "Day Watch," he urges local filmmakers to follow the lead of "Watch" producers Konstantin Ernst and Anatoli Maksimov.

"These guys have taste, and they work in television, so they understand social currents and commercial trends and know what can be a big success," he says. "It may be any kind of film, but they will do it in a way that people like."

Semenov adds that one of the production duo's next big projects -- an updated sequel to the 1970s Soviet cult classic "Ironiya sudby, ili S legkim parom!" (The Irony of Fate, or Enjoy Your Bath!) -- will not simply be a remake but something different that "has the same sort of energy and attraction as the original."

But like the Soviet classic that inspired it, the film is unlikely to have much international appeal in the way that the "Watch" series has -- another limiting factor in the overall financial prospects for Russian film.

Take the case of "Lyubov-Morkov," the slapstick comedy that opened last month and has performed remarkably well, pulling in a hefty $6 million in its first week, with only the French import "Taxi 4," written and produced by Luc Besson, doing better (with a take of about $8 million for the same period). But besides sales of domestic video, DVD and TV rights, such a film has virtually no chance of garnering serious international revenue.

"Current releases of Russian films are very good," Semenov says. "But these are not the sort of films that you will see at festivals or will conquer international markets. In U.S. terms, a film like 'Lyubov-Morkov' would count as a B-movie, but for Russians it is an A-movie because it has big local stars in it."

One feature that could appeal to global audiences is St. Petersburg-based Thema Prods.' "In Tranzit." The English-language war movie, which will screen at the Cannes market, features an international cast headed by John Malkovich.

Still, Armen Dishdishian, president of Central Partnership sales house -- a new company that is part of the Central Partnership shingle -- agrees that international sales potential for Russian production remains in its infancy.

"International sales projections for Russian movies are still not included in overall sales forecasts by producers here, although we plan to introduce that for suitable projects from next year," he says.

One producer who has no doubts about the potential appeal of Russian cinema is "Day Watch's" Maksimov. With the movie that made nearly $35 million domestically last year going international -- it premiered in February with a special screening at the Berlin International Film Festival and is rolling out across Europe and the world this spring and summer -- Maksimov and fellow producer Ernst are lining up a parade of new projects to storm Russia and, they hope, the international boxoffice.

"We have a slate of projects from a wide variety of genres -- comedy, period dramas, action -- that will appeal to Russian viewers and hopefully have international potential," Maksimov says.

Although "Dusk Watch" -- the third, English-language edition of the "Watch" series -- will not be a Ernst/Maksimov production as such, Bekmambetov will direct, leading many to believe the sequel stands a good chance of duplicating its predecessors' success abroad.
If that happens, don't look for the bullish Russian film sector to go back into hibernation anytime soon.
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