Russian film industry feels the chill

As recession cools the production sector

LONDON -- The Russian film industry is feeling the chill and it's not just the time of year, according to a report commissioned by the European Audiovisual Observatory and published Tuesday.

Penned by independent consultants Nevafilm and RFilms, the report paints a bleak picture for the production industry across Russia.

Since late 2008, tensions in the industry have "become evident," according to the research.

The Ministry of Culture of the Russian Federation, a major investor in local production, has redirected all 2009 funding to the completion of existing films, so no new projects will receive financing during the year.

The number of features produced in Russia hit 107 in 2007 before falling by one to 106 in 2008. But the global economic downturn and the local upheaval has resulted in the number of movies made in 2009 slumping to just 40, according to the data.

And national television channels have revised downwards investments and acquisitions and prices for rights have shrunk.

Changing conditions have also sparked consolidation among production companies and concerted efforts have been made by the newly created Association of Film and TV Producers to contain spiraling production costs.

In the services sector, plans for the construction of new studio space have been postponed or cancelled, and existing facilities are operating below capacity.

It is especially disheartening after the success in 2004 of "Nochnoy Dozor" (Night Watch) which sparked a revival in locally produced Russian movies, the report notes.

Overall investment in production between 2004 and mid-2009 was over 62 billion roubles ($2 billion), of which just over half went to the production of TV films and series, with feature production representing a 25 billion rouble ($850 million) share. Those levels have collapsed.

The report's findings were presented to Russian industry professionals Dec. 1 at a special workshop held during the 80th Moscow International Film Market.