Russian Box Office Remained Resilient in 2014 Despite Economic Woes
A report analyzes the effect of ruble devaluation and sanction on Europe's second-biggest exhibition market.
Russia retained a leading position in the European exhibition market last year despite a currency collapse as the ruble lost nearly half of its value.
A new report by research firm Nevafilm shows that Russian box office in 2014 was Europe's second highest at nearly $1.25 billion, behind only France with $1.45 billion (1.3 billion euros).
The St. Petersburg- and Moscow-based firm said that while admissions dipped slightly by 0.15 percent to 176 million, box-office revenue in ruble terms was up 2.5 percent to 43.3 billion rubles. Drawing on weekly cash conversion figures collated by magazine Russian Film Business Today, dollar revenue for Russia and the CIS countries, excluding Ukraine, in 2014 amounted to $1.246 billion, "an 8.7 percent decrease from the previous year," the report says. But compared with 2012 dollar revenue, figures were up by 10 percent, the report adds.
Due to currency fluctuations, the $1.25 billion figure today amounts to only around $800 million. The ruble has rallied as of late, though, so that one dollar is now worth around 50 rubles.
Although box-office revenue in ruble terms rose, a drop in real earnings and other negative economic indicators suggest that 2015 will be a tougher year for the Russian box office, the report says.
"In the first quarter of 2015, the effect of the sharp fall in the value of the Russian ruble, particularly in December/January, was felt in the Russian film market. It led to the postponement of the conclusive transition to digital projection in some cinema chains and in the Russian market in general," the report says.
"Box office revenue measured in foreign currency began to fall sharply, even though cinema attendance [in the Commonwealth of Independent States] remained stable."
Exhibition in Russia in 2014 remained strong, with 414 new releases out of a total of 521 films shown at cinemas. New releases were down slightly from the 2013 figure of 429, but total releases were up -- in 2013, only 491 films were in exhibition.
Russia's seizure and incorporation of Ukraine's Crimea territory -- the trigger for international sanctions against Russia -- increased Russian cinema admissions by 0.51 percent, resulting in a 0.36 percent increase in overall box office, the report says.
Although the report steers clear of making predictions for 2015, Russia's current tough economic climate does not seem to be having a negative effect on moviegoing and has not stopped Hollywood blockbusters, such as Furious 7, from hitting pay dirt. The film took $13.6 million on its opening weekend last month.
"The crisis that hit Russian exhibitors in November-December  is likely to bring an end to the trend of focusing on wealthier consumers," the report says. Profits from auxiliary cinema advertising and concession sales have been affected, although fears when the ruble crisis hit that exhibitors paying dollar-denominated rents would be hard-hit have proven groundless so far.
"The majority of Russian exhibitors either own their own premises or have long since transferred rental agreements into rubles," the report explains. "Others have managed to resolve the issue with landlords by moving to payment of a percentage of revenue, settlement in rubles or the establishment of an exchange rate band."