Russia 2014 in Review: Kremlin Bans Pay TV Ads, Film Business Sours Amid Crimea Conflict

The Kremlin’s annexation of the Crimean peninsula helped spark a civil war in the east of Ukraine that plunged Russia’s international relations to a level not seen since the days of the Cold War.

International sanctions brought new pressure on Russia’s economy in 2014, prompting political and economic reactions from which the film industry was not immune, including a collapse in the value of local currency the ruble against the dollar that threatens to half profits for Hollywood from the territory in the coming year.

But it was not all bad news in 2014: Russian animation sold well at AFM, and Wizart Animation’s take on the Hans Christian Andersen‘s fairytale, The Snow Queen, and its sequel sold worldwide.

Here is THR‘s look at the big media and entertainment stories of 2014 in Russia:

Russian Films and TV Series Banned in Ukraine
As relations between Russia and Ukraine soured over Russia’s annexation of the Crimean peninsula, Ukraine banned more than a hundred Russian movies for various reasons, according to an expert commission on film exhibition.

Poddubny, a biopic on Ukraine-born Soviet wrestler Ivan Poddubny, and White Guard, set in Ukraine during the 1918-1922 Russian Civil war, were said to “show Ukraine and its people in a ‘distorted’ way.”

Family comedy Moms 3 was accused of “Russian chauvinism.”  Films glorifying Russia’s army, police and special-forces featuring actors Mikhail Porechenkov and Ivan Okhlobystin, known for actively supporting pro-Russian separatists in East Ukraine, were also banned.

Commercials on Pay TV Scrapped
In the summer, President Vladimir Putin signed a bill banning advertising on pay TV.

The law, which comes into effect on Jan. 1, aims to create a level playing field for pay TV networks that generate revenue from both subscriptions and advertising and free-to-air stations, which rely solely on commercials.

International network owners operating in Russia reacted by saying that their business would no longer be profitable. Some foreign networks, notably CNN, said they were considering pulling out. Later, explaining the ban, Putin said that it was prompted by requests from major free-to-air networks, which the government could no longer support with its budget.

Foreign Media Ownership Restricted
In October, a law limiting foreign ownership of Russian media companies to 20 percent stakes was adopted 

The measure, which comes into effect on Jan. 1, 2016 is set to hit Disney and Modern Times Group (MTG), the Swedish owner of a 38 percent stake in CTC Media, Russia’s sole publicly traded broadcaster. News of the law hit CTC Media’s stock, wiping out more than $500 million of its value.

Later, MTG said it would not pull out of CTC Media, retaining its permitted 20-percent share as long as it would be able to “influence the way that the company operates.” CTC Media hired advisers to help it reduce the foreign-owned stake.

Blitzkrieg on Independent TV
Long a thorn in the Kremlin’s side, politically independent Moscow station Dozhd TV, won national prominence for its fiercely objective reporting of the winter protests in 2011.

Officials found a stick to beat it with in January when the station was accused of running a story that questioned the legitimacy of Stalin’s wartime policy of allowing Leningrad to remain besieged for 900 days. Was the sacrifice of hundreds of thousands of lives worth it, the station asked? A Holy Cow of contemporary Russian mythology, the heroism and sacrifice of the Great Patriotic War, as it is known in the country, is about the only national story all Russians agree on. The report set off a chain reaction that ended with political pressure to dump it from cable operators.

Dozhd survives, for now, as an online service. Trouble for the country’s last politically independent station, Tomsk TV2, an award-winning Siberian station 2,235 miles east of Moscow, followed in December. It has been told its signal would be turned off as of Jan. 1.

Best Director Winner in Venice Pulls Film From Oscar Consideration
In September, Russian director Andrei Konchalovsky, who worked in Hollywood in the 1980s but has lately been known for his anti-Hollywood stance, withdrew his most recent film, The Postman’s White Nights, from consideration as Russia’s foreign-language Oscar race entry.

The film had already won him the best director Silver Lion at the Venice Film Festival, but he said he had no desire to compete for a “Hollywood” award, whose importance he believed was “overblown.”

He added that he would not release it theatrically in Russia to viewers “eating popcorn, which crunches in their heads.” The movie premiered in Russia on Channel One TV network in November.

Cannes Winner ‘Leviathan’ Faces Problems
Director Andrei Zvyagintsev’s fourth film, Leviathan, hailed as a masterpiece of Russia’s new wave, was a rare Russian contender at the Cannes film festival where it won the best script honor.

Based on a true (small-town America) story of a man crushed by the weight of oppressive and petty state officials, set in the stunning scenery of Russia’s Arctic coast, Leviathan pulls no punches in a tale exposing the corruption at the core of today’s Russia.

Culture Minister Vladimir Medinsky said that, though he respected its “talented” director, he personally did not like the film and shunned the red carpet in Cannes. Made with the help of state cash, there were rumors it would not be released in Russia.

Only after Zyvaginstev was forced to edit out bad language, which is outlawed under a new law in Russua, did it get a domestic release date for Feb. 2015.

No Quotas for Hollywood films
Souring relations between Russia and the United States over Ukraine triggered calls for banning or limiting the release of Hollywood films, which account for the lion’s share of the Russian box office.

In addition to members of parliament and state officials, veteran directors Stanislav Govorukhin and Yuri Kara were among backers of the idea. Kara claimed that Americans “assault” Russia, while “Hollywood is making billions of rubles” here.

The anti-Hollywood rhetoric died down after president Vladimir Putin spoke out against the idea, saying that Russian people should not be prevented from consuming “a product” they wanted.

Pussy Riot Pair, Out of Prison, Deny Talk of Hollywood Movie
The poster girls of Russia’s resistance to Vladimir Putin’s regime, Pussy Riot’s Nadezhda Tolokonnikova and Maria Alyokhina, won sudden release from jail in the closing days of 2013.

By February, looking fresh and untroubled nearly two year behind bars in harsh Russian penal colonies, they appeared alongside Bianca Jagger at a Cinema for Peace press conference in Berlin, where they said that though unnamed Hollywood producers had pressed them to make a movie, they were concentrating on their work to highlight the plight of Russian prisoners.

After being whipped by Cossacks in Sochi, they hit the road for an international speaking tour, appearing at L.A.’s Max Sennett Studios early April and on NBC’s Today show. By November, during their first ever visit to London they were still in combative mood, telling newspaper The Guardian that viewers of international English-language TV news service RT, (until recently known as Russia Today) “should realize it is Kremlin propaganda.”

Russian Animation Succeeds
Russian animation became a world brand in 2014. Wizart Animation’s retelling of Hans Christian Andersen’s fairytale The Snow Queen sold to China during Cannes and notched up a raft of deals for a sequel during AFM.

The British release of Snow Queen 2: Magic of the Ice Mirrors was the starting pistol for the international rollout out of the sequel, coming weeks before Russian viewers would see it during their annual movie feeding frenzy over the big New Year holidays. 

Kremlin Re-Launches International Media Effort
The Kremlin’s push for ever greater international media reach was seen in the launch of  a U.K. version of RT and the rebranding of state media internationally as Sputnik, a name rich in Soviet connotations as the first Soviet satellite in the 1950s had that name.

Sputnik is headed by Dmitry Kiselov, the Putin loyalist and TV host who told viewers on air that Russia is “only country in the world that can turn USA into a pile of radioactive ash.”

The other boss is Margarita Simonyan, director of RT, which in 2014 lost two Western hosts who criticized it for a lack of objective reporting.