Russians contend with rising cost of entertainment

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MOSCOW -- Before grumbling about rising movie ticket prices in the U.S., consider a trip to the multiplex in Russia. Warner Bros.' recent Matthew McConaughey starrer "Fool's Gold" is playing at Moscow's 11-screen Oktyabr Cinema for 300 rubles per ticket -- that's $12.75.

Stick around for the later showing of Fox's horror film "Shutter," which is only running in Oktyabr's 35-seat VIP room, and the price jumps to 1,200 rubles ($51).

A night out at the movies or the occasional theater seats might require budget-balancing in the U.S. or Western Europe. But that same escapism is becoming a luxury item in Russia, where out-of-home entertainment can eat up a sizable portion of the average wage of the working class and those on retirement incomes.

"Certainly, there is a segment of the Russian population that is left out of entertainment because of the price," says Maria Lipman, analyst at the Carnegie Moscow Center, which studies public policy issues.

The increasing prices aren't limited to Moscow's entertainment industry; the city was named the most expensive in Europe two years running, according to Mercer Human Resource Consulting.

But even as Russia spawns a growing middle class and disposable income increases of about 10% each year, the average net monthly wage translates to $524 per month and the average monthly pension to $130.

At the same time, PricewaterhouseCoopers estimates that the average price of a movie ticket in Russia was 101 rubles ($4.12) in 2006. Today, Moscow prices range anywhere from 150 rubles-500 rubles ($6.12-$20).

And for "event" movies, ticket prices often are hiked during the first two weeks in release. In Moscow, prices also can vary depending on the time of day or whether it's a weekend showing.

Leonid Ogorodnikov, CEO of Russia's largest exhibitor, Caro Film, explains the variance in cost as the price of ensuring quality.

"There are theaters in which prices don't go up on weekends and holidays, but these are old cinemas that don't guarantee quality presentation, sound, service, etc.," he says. "These are attended by moviegoers who aren't ready to pay for a quality film screening."

Kirill Ivanov, vp operations and development at Cinema Park, Russia's fourth-largest exhibitor, chalks up the expensive ticket prices to extremely high rental rates for cinemas in Russian shopping centers. "If before this concerned only Moscow and to a certain extent St. Petersburg, now the rental rates in small cities are just through the roof," he says.

But Sergei Lavrov, boxoffice analyst at Russia Film Business Today, places the responsibility for high ticket prices squarely on the shoulders of exhibitors.

"The theater chains are responsible for setting the prices, but they're given incentive by the distributors, who charge higher film-rental fees for the first few weeks," he says. "With so little regulation in this country, distributors can do whatever they like."

Although reserved seating is becoming increasingly common in Europe and the U.S., tickets in Russia are divided into economy and VIP categories. Some theaters even set aside halls with much smaller capacity, with tickets selling for as high as three or four times the usual admission rates.



Ogorodnikov counters that cinema ticket prices at the lower end of the scale are easily affordable. "Ticket prices range from 50 rubles to 250 rubles ($2.08-$10.41)," he says. "Such a differentiation allows not only viewers of the median age who earn a reasonable living to go to the movies but also senior citizens, schoolchildren and students -- those that are considered to be low income."

Moreover, Caro Film has initiated programs for orphans, senior citizens, nursing home residents, the disabled and World War II veterans to receive free admission.

Ivanov thinks some price relief can be expected, but not much.

"Any sharp decline in prices would call into question the very existence of the film exhibition business," he says. "After all, the film business is not subsidized by the government or charity funds. It's supported by private investment, which must always turn a profit."

With prices in Russia as high as $140 for two at a hit play, a night out at the theater is clearly not for everyone.

Nowadays, each separate production has its own price range, depending in large part on the trendiness of the venue or the production. For example, a relatively new show titled
"Primadonnas" at the Chekhov Moscow Art Theater can cost anywhere from 1,000 rubles-2,000 rubles ($42.55-$85.10). Another popular show, Ray Cooney's "13," is priced anywhere from 500 rubles-1,800 rubles ($21.27-$76.60).



Many elderly folks on fixed incomes have found a way around the rising prices. When a new show opens, it usually goes through several semi-closed dress rehearsals before the paying public is admitted. Theater appreciation groups have dibs on inviting their members to these shows.

"I've been at some of these events and it's very much like being back in the Soviet Union -- a whole audience full of elderly people," says John Freedman, theater critic for the Moscow Times.

But in general, it is Moscow's new rich who get to most major theater productions, and they don't blink at the relatively high prices.

"People aren't used to buying things cheaply -- it seems perverted to them,"

St. Petersburg-based film expert Alexander Pozdnyakov says. "If something is expensive and costs the same as in the West, then it is perceived as having the same level of quality as in the West."

That certainly seems to be the thinking in the music concert world. "Fees paid to Western acts in Russia are higher than those paid in Europe," says Maria Krogmann, PR director of B1Maximum, a 3,500-capacity club that opened in 2006 in a former food warehouse in southwestern Moscow. The club charged 1,800 rubles ($73) for the first appearance in Russia by New York indie band Sonic Youth.

"In many respects, it is the fault of Russian promoters engaged in bidding wars over the same artist," Krogmann says.

In addition to the artist's fee, Russian promoters are saddled with huge expenses associated with flights, visas, accommodations of artists and expensive advertising. All of this is passed on to the ticket price, which in Moscow can be as much as three times higher than what one would pay in the West.

And if concert tickets, cinema tickets and theater tickets are beyond your reach, don't even think about heading out to a Moscow nightclub. A booth can cost as much as $12,000 in some hot spots.   
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