A very scary movie: can the cancellation of foreign releases in Russia collapse the market

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On March 1, it became known that Disney was recalling a new Pixar cartoon “I’m blushing” from the Russian box office. Following them, other major film studios announced the cancellation of the screening of their major releases in Russia. Warner Bros. recalled a new “Batman“With Robert Pattinson, Paramount – the sequel” Sonic in the movies “and the action adventure” Lost City “(both studios have the same distributor in Russia – Universal Pictures International), Sony – a comic book with Jared Leto” Morbius “. The company called the film’s review only part of the “cancellation of future releases of the studio.” Thus, the fate of other large-budget films from abroad, which were to be released in the near future, is in great question. Among them are the new part of “Fantastic Creatures”, “Dr. Strange: In the Multiverse of Madness”, “Ambulance” by Michael Bay and the trickle “Jurassic World”.

The reason for the cancellation of the studio’s rental is called a “special operation” * in Ukraine. A Forbes source in the film distribution industry claims that the economic factor has also played a role here. The day before the news of the departure of American blockbusters from the network of releases, Russian President Vladimir Putin signed decree “On the application of special economic measures in connection with the unfriendly actions of the United States and neighboring countries.” Among them – a ban on the transfer of funds without opening a bank account using electronic means of payment provided by foreign payment service providers. “The result of such a restriction is the de facto inability to implement basic economic agreements such as deducting a share from film distribution to owners of foreign film studios and, consequently, stopping cooperation,” said a source from a major film distribution company Forbes Life. Representatives of UPI and Sony declined to respond to a request from Forbes Life to provide information on upcoming development plans. Director of Public Relations of the Russian branch of Disney Igor Potapov referred to the official statement global office of the company. Independent distributors working with European art releases say that their agreements with the studios will remain in force in the near future: stated “Exhibitor” (upcoming release – “Guys undercover”, Saban Films), Capella Film (“Mania”, IFC Films), “Pro: view” (“Hide and Seek”, “Saban Films”) and other market participants.

Russian film networks have already announced that they will return hits of Russian distribution to cinemas: in the near future “Slave”, “Father”, “Brother”, “Moving Up” and other films will be shown again, which will help support the rental during stagnation. In addition, some Russian releases will appear in cinemas ahead of schedule: for example, the comedy “I want to get married” (co-produced by Peak Media and online service START) was released on March 3 instead of the scheduled date of March 5. Rospotrebnadzor even recommended to abolish restrictions on the occupancy of cinemas.

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The industry doubts that such measures will save the market. “Now the situation is worse than at the peak of Kovid and the spring quarantine of 2020. Two years ago, people lived in anticipation that the virus would recede and we would return to normal life. In the current situation, when more and more sanctions are being imposed, it is difficult to imagine that in the next six months the Russian film market will cease to be toxic to foreign rights holders, ”said the same source from a large film distribution company. “The effect of the sanctions has been postponed. Now it is felt in a minimal amount, because we have twisted films that have already been. But at the same time, there is already a drop of about 60% in revenue on weekdays, “- said Forbes Pavel Ponikarovsky, founder of the network of cinemas” Lumen Film “.

For American blockbusters, the Russian film market is not paramount, says producer and distributor Vladislav Pasternak: “For Hollywood companies, it matters only when it starts to bring in significant money, but not before. When the numbers became weighty, Hollywood companies opened their offices here, began to systematically bring their stars here for premieres, to invite our people to film. Until 2006, Disney and Sony rolled out their films through the independent company Cascade, for example. For a long time, Russia was in the top 10 world markets for film distribution, and in terms of collections of individual projects it reached the second or third place in the world. But in recent years, Hollywood has found it more interesting to enter the Chinese market, where the numbers are already higher than in the United States; the difference with the Russians is about 10 times. ”

The news of the “seizure” of major American film releases from the rental network shocked the Russian film industry. Even the increased production of domestic content will not be able to cover all the needs of cinemas – released in August 2020, “Goalkeeper of the Galaxy” and in the absence of competitors was able to raise less than one-fifth ($ 1.4 million) of the budget spent almost 800 million rubles. RBC with reference to the “Bulletin of the film distributor” and representatives of the film network “Luxor” predicts 80% loss of the box office in March. “Hollywood studio films in general accounted for about 75% of our collections. That is, in any case, we will at least fall by the same 75%. This decline does not allow our business model to work for long. We will do our best to somehow retain employees and work on Russian content, but what this will lead to is still unknown. In the long run [с падением как минимум на 75%] we have no future. This will lead to the mass closure of cinemas. We were so badly wounded by the covid, and we no longer have the resources we had at the start of the covid history, “Ponikarovsky shared.

And what about online services, which two years ago were a huge success amid the crisis of film distribution? Netflix already stopped work on domestic series from the line of Originals – “Anna K.” (production “1-2-3 Production”), “Nothing special” (“1-2-3 Production”), “Loop” (“Hydrogen”) and “ZATO” (“Russian”) – and also closed the subscription for users from Russia. Ukrainian online service Megogo, one of the largest in the CIS countries (official number users – 40 million), the other day suspended his work in Russia. A source from the online cinema industry says that “there is no reason to panic yet”, although, for example, British companies engaged in the production of TV series, including the BBC (“Doctor Who”), stop to license its content for Russia, that is, new series will not be available for legal viewing for Russian viewers.

In this regard, the risk of a new round of piracy is growing. In 2021, the online cinema market increased by 56% compared to the previous one – while the volume of pirated products as well increased at 24%. Increasing the number of online services makes stealing much easier: digital copies of movies are much easier for pirates to merge than from physical media. Despite emerging request For the consumption of legal content around the world, including Russia, illegal viewing of movies and TV series is still popular – according to last year’s survey by Magaplan, more than half (51.8%) of Russian Internet users prefer pirated content to official.

March 3 Association of Cinema Owners (unites more than 700 cinemas) turned to the Prime Minister of Russia Mikhail Mishustin with a request to develop and start implementing a program to support the rental of domestic cinema in cinemas of the country as soon as possible. “We are concerned about the high probability of the elimination of the entire film industry in the country,” the letter said. In particular, the organization points to problems with technical equipment, the supply of which is now discontinued, and there are no Russian counterparts.

* According to the request of Roskomnadzor, when preparing materials on a special operation in eastern Ukraine, all Russian media are obliged to use information only from official sources of the Russian Federation. We cannot publish materials in which the operation is called “attack”, “invasion” or “declaration of war”, if it is not a direct quote (Article 53 of the Federal Law on the Media). In case of violation of the requirement from the media, a fine of 5 million rubles may be imposed, and the publication may be blocked.

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