“Spreading the agony”: about a third of regional cinemas closed in Russia

Russian cinemas in the regions are looking for possible ways to reduce costs and increase revenue.

Cinema chain owners are making decisions to close their cinemas, reduce working hours, or switch to off-duty film screenings, TASS reports.

According to cinema owners, revenue for the first half of 2022 has fallen by about 60% since the departure of major Hollywood companies from the Russian market and by 70% compared to pre-pandemic figures.

As the general director of the regional network "Soft Cinema" Alexander Odolsky said in an interview with RT, about 30-36% of cinemas in Russia stopped working.

A similar development of the situation may lead to the closure of other cinemas.

“Almost everyone has switched to fewer sessions, many working several days a week.

This may lead to the closure of cinemas.

Revenue fell by 60-70%,” said Alexander Odolsky.

The expert noted that European and American films that are being released at the box office do not save the film business, since they do not have the necessary advertising campaign to attract the audience.

“I must say that not all American studios left.

The schedule of cinemas includes films from the UK, the USA, European films, but the main studios have left - the monsters of film production, whose films, in addition to high-budget, were also accompanied by a global advertising campaign, respectively, the advertising of films also left.

Despite the fact that there is a product of some independent studios, the same Hollywood ones, it is not accompanied by an advertising campaign, the audience does not see it, ”the expert explained.

According to the forecasts of the Association of Cinema Owners, by the end of 2022, the total loss of cinema halls will reach 11.1 billion rubles.

At the same time, the maximum income from domestic films for the same period will be about 6.142 billion rubles.

“Revenue has fallen very much, and we are working not only on the verge of profitability, but at a loss.

We tried to negotiate with the landlords to reduce the rent, but this is not a way out, but stretching the agony over time,” says Alexander Odolsky.

He added that now the Russian market does not have "such a quantity of quality product that will arouse the interest of the viewer to replace the departed studios."

“So far, there are no Russian big-budget films that would cause a flow of visitors - maybe they will appear at the end of this year, next.

The situation developed in April, and the production of films takes about a year, ”Odolsky said.

Hope for a forced return of blockbusters

The Russian government, meanwhile, is looking for effective ways to support the film business in the country.

While assistance has been announced for the capital's cinema chains, they will be able to receive financial payments from the city budget to compensate for the costs of licensing agreements for the use of rights to domestic films, as well as apply for grants for film advertising and partial compensation for filming in Moscow.

Among other things, according to Alexander Odolsky, one of these days a bill on compulsory licensing, including Hollywood big-budget films by studios that have left the Russian market, should be submitted to the State Duma for consideration.

As the expert noted, this law can save regional cinema networks.

“Only the draft federal law on compulsory licensing will help to fight.

Its meaning is that a certain state enterprise is being created that forcibly delivers the product to the Russian market, receives a distribution certificate from the Ministry of Culture, so that these films correspond to the high moral qualities of our Russian culture and do not have propaganda and scenes that discredit Russia.

Accordingly, the film is further voiced, rented to cinemas, and the rental fee is collected, ”explained Alexander Odolsky.

To receive rental revenue, American film companies will be asked to open a ruble account in Russia and receive payments for screenings in the country.

“Now there is a discussion, and perhaps this summer session the law will be considered,” says Odolsky.

He stressed that it is still difficult to make predictions regarding this bill.

Serious problems in the Russian cinema business began at the height of the coronavirus pandemic, when cinema halls were closed due to the epidemiological situation.

The situation worsened in March 2022, when, against the backdrop of a special operation to protect Donbass, the largest Hollywood studios, including Warner Bros., Sony and The Walt Disney Company, refused to show their new films in Russia.

Blockbusters accounted for about 80% of all revenue, and the loss of the main part of the income of cinemas led to huge financial difficulties.

To maintain the flow of viewers, cinema chains have decided not to increase prices for tickets and cinema bar products.

The rolling repertoire in the country has noticeably changed: old domestic films, Indian and Korean films began to be shown on the screens, and series were also promised to be released. 

Despite this, representatives of the Association of Cinema Owners noted that these measures would not be enough to significantly increase profits.

AVK council member Mikhail Malakhov said in an interview with RT that the funds needed to support business are estimated at more than 6 billion rubles. 

At the same time, the Russian government promised to allocate 14.5 billion rubles for film production.