Russian media sector hot despite country's image

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MOSCOW -- Despite international alarm bells sounding in the wake of Russian President Vladimir Putin's recent Cold War rhetoric, the country's new breed of wealthy, brash movie and TV moguls say the future for them has never been brighter.

In fact, the Russian bear is in better shape than ever when it comes to the country's multibillion-dollar media sector as it cruises through yet another record-breaking year.
Television advertising will mint more than $4 billion this year, experts say, and a third of the record-breaking boxoffice receipts forecast will come from locally shot Russian-language movies.

Ten years ago, the country boasted one modern cinema. By December, there will be 1,800-2,000 -- many of them multiplexes.

In short, it's a party that the international media congloms don't want to miss. Not surprisingly, some of Hollywood's major studios are piling in as well.

A singular marker of Russia's burgeoning production sector comes with arguably the country's most expensive movie -- a $35 million adaptation of the cult 1970s sci-fi novel "Inhabited Island" that's shooting on location in the Crimea.

Scheduled for release in January 2009, "Island" already has been presold for $16 million to Russian distributor Caro Premier. The budget reflects the confidence that Russian producers feel in a domestic market where boxoffice receipts are expected to hit $560 million this year.

"The television and film market in Russia is extremely dynamic. Russia's international image has no effect whatsoever on the media market," said Alexander Rodnyansky, head of Russia's most popular TV entertainment network, Nasdaq-listed CTC.

The international image he was referencing includes pictures of anti-government demonstrators beaten by riot police, unsolved murders of political journalists and Putin's brusque attack on U.S. plans to house a new anti-terror missile shield in Russia's Eastern European backyard.

But these and other global political concerns are clearly not affecting entertainment executives. Rodnyansky insists that the freedom to do business in Russia is unfettered.
At June's 11th International Economic Forum in St. Petersburg, business leaders including Britain's Martin Sorrell, head of ad giant WPP -- which earned $100 million in Russia last year -- told foreign investors that Russia was "probably the fastest-growing market in the world."

The profiles of Russia's homegrown media moguls reflect that bullish media market.
Ukrainian-born Rodnyansky moved to Moscow after founding a highly successful television channel in Kiev. Now, he also co-owns Russia's annual early June national film fest Kinotavr, in Sochi, the Black Sea resort that's home to Putin's dacha summer cottage.

"Directors are free to make politically sensitive or critical movies -- there is no censorship in movie production at all," Rodnyansky said. "The media market has been growing by 30% year on year for the past three years, driven by tremendous developments in GDP and consumer spending."

And foreign investors are taking notice of the robust climate.

The Walt Disney Co., the latest Hollywood major to enter the market, plans to shoot English- and Russian-language films here in partnership with Thema, a production company with headquarters in London, Luxembourg and St. Petersburg that's best known in the West for co-producing Woody Allen's 2005 film "Match Point."

There also has been considerable action on the television front, with NBC Universal International TV Distribution and Dick Wolf Films teaming with Russia's NTV to make localized versions of "Law & Order: Criminal Intent" and "Law & Order: SVU." Sony Pictures Television International also has production offices in Russia and has been active on the production front, working with broadcaster CTC.

Michael Dounaev, managing director of Russian telco and Thema parent Sistema Mass-Media, said projects include "Billionaire's Fair," a Russian-style "Ocean's Eleven."

British director Roland Joffe, who lensed the thriller "Captivity" (released this summer by Lionsgate in the U.S.) on a studio set in Moscow, is now helming a second movie in Moscow, a hedonistic, music lifestyle drama called "Finding t.A.T.u." starring Mischa Barton.

"This is a time of extraordinary potential in Russia -- for good and bad," Joffe said. "It's a complex country, and it is very easy to criticize without understanding what is going on."
Russian investors also are placing their faith in Putin's ability to maintain stability beyond the 2008 elections, when his second term expires.

Solar Film Studios, a new company based near the southern port of Novorossisk, plans to plow $30 million of private cash into building a moviemaking complex in a part of the country where 280 sunny days a year make it perfect for location filmmaking.

"We would not be investing our own money in this project if we were not confident in that future," said Sergei Keshishev, one of four partners in the new company.           
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