Culture
Russian film industry: From heady success to isolation
July 29, 2022
Lisa Surganova
Journalist, screenwriter, former editor-in-chief of Kinopoisk, one of Russia's largest streaming services
Lisa Surganova writes about the devastating effect that the war in Ukraine has had on the Russian film industry. As Western distribution companies have stopped working with Russia and the Russian government tightens censorship, a flourishing industry is rapidly coming apart.
Up until 2022, the Russian film industry was on a head-spinning rise. Russia was one of the biggest European film markets, Russian movies were welcomed at the most prominent festivals and the streaming industry was growing incredibly fast, producing dozens of high-quality original shows every year. Netflix was in the midst of producing its first Russian originals. But the war has brought the era of these achievements and aspirations to an end. Nowadays, the Russian film industry is probably as isolated from the Western world as ever and is spinning toward one of the most challenging crises in its history.   
Karo Oktyabr, one of Moscow's biggest and most famous movie theaters. Source: Wiki Commons
Movie theaters

The biggest blow so far has fallen on Russian movie theaters. Just like their global peers they were hit hard by the pandemic, but thanks to government support the industry managed to survive. Overall Russian box office revenues in 2021 doubled versus 2020 and came in at almost $550 mln. For comparison, the French and UK box offices – among Europe’s biggest – reached $731 mln and $811 mln, respectively. But this was still almost 30% off the record 2019, and movie theaters and local distributors were eagerly looking forward to Hollywood tentpoles coming in 2022, including The Batman, Doctor Strange in the Multiverse of Madness, Black Panther: Wakanda Forever and the long-awaited Avatar 2.

The bounce-back from the pandemic losses never materialized.
“After Russia attacked Ukraine, all the major Hollywood studios – Universal, Warner Bros., Disney, Sony and Paramount – halted operations in the country."
The reason was not only reputational but also financial: with all the sanctions and restrictions it became almost impossible to do business in Russia. Hoping to return, they retained their staff, but in the beginning of July Universal Pictures was the first to announce that they would close their Russian office indefinitely. And as there seems no near end to the war and sanctions, the other major studios will likely follow.

This is a disastrous situation for the Russian industry, which relied heavily on Hollywood. Movies made by these five major studios accounted for up to 75% of the Russian box office; out of the 20 top-grossing blockbusters in Russia 17 were theirs. To plug the gaping hole in their budgets, most movie theaters started closing screening rooms, laying off staff and cutting working hours. By the end of April, a third of all screening rooms across the country had stopped working and monthly box office revenues had halved versus a year before.

As a substitute for Hollywood blockbusters, movie theaters started showing indie American and European movies (which they could get), Bollywood hits, originals provided by Russian streaming services, football and hockey games and even content by YouTube bloggers. In another desperate move to survive, many turned their screening rooms into computer and VR clubs or children’s entertainment centers. Some started renting their premises for business and private events.

However, all these measures can’t bring in nearly as much revenue as Hollywood premieres. According to the Association of Theater Owners, by the year-end theaters could see their revenues down 80% and more than half could be forced to close. The association has appealed to the government several times, begging for financial support for theaters, but to no effect. It is rumored they were told that there are more pressing needs now than to save movie theaters. And even if the government decides to support them, most likely it will be a one-off payment that won’t help them in the long run if Hollywood movies don’t return.
Okko (Russian streaming service), 2021. Source: Wiki Commons
Streaming services

For now, streaming services seem to be faring much better. The streaming industry in Russia is relatively new and has boomed in recent years: almost 40% of all Russians used subscription services at end-2021. In the first quarter of 2022, the subscription base of Russian streaming services reportedly expanded 6-8%, reaching 12.2-12.5 mln people. That took place mostly due to the lack of foreign premieres in movie theaters. Another reason was Netflix shutting down its service in Russia with its 700k subscribers.

The difference with streaming is that most of these companies still have the rights to show foreign movies and series – ever-green hits like Harry Potter, Marvel films or Game of Thrones, as well as recent Hollywood premieres released before the war. However, many of these contracts will end at some point, meaning most of these titles will go too. The streaming services are already not getting many new movies or series from the West. The only major exception is Amediateka, the official home of HBO in Russia, which just announced that after a four-month break it would be releasing HBO series again, among them the long-awaited Game of Thrones prequel, House of the Dragon.

Even if HBO continues to show its premieres in Russia, the loss of new Hollywood premieres will affect the streaming services sooner or later. They are already actively combing other markets and filling their libraries with Turkish, Indian and Korean content, though none of this compares to the popularity of Western films and series. All of this, combined with the pullout of the biggest advertisers and falling personal income (which will mean cuts to nonessential spending), could drive a 20-46% loss in revenues, according to different forecasts.

Back to piracy

In recent years, Russia was finally transforming its reputation of a country with widespread piracy. This was thanks to strict regulations and the booming streaming industry, which provided a comfortable and affordable viewing experience. But piracy is back on the rise again. Unable to watch the new Batman or Doctor Strange movie normally – either in the cinema or online – people went back to torrents.

An even worse development is that some movie theaters also started showing illegal copies of foreign movies in a desperate attempt to bring back viewers. Not all of them do it officially, as some lend their premises for “private screenings” arranged by people or organizations, thus washing their hands of the responsibility for the content shown inside.
Just recently, the biggest cinema in St Petersburg started selling tickets for Top Gun: Maverick, claiming that the screenings were organized by an unnamed third party that had just rented the screening rooms."
And the number of such cases has multiplied over the last month – in June it was only a dozen theaters, but in July they numbed already more than 100, among them state-funded ones.

The lack of prosecution for this illegal business is also symptomatic. Not only does the government not care about piracy, it actually encourages it in a way, as a new law allows Russian companies to “involuntarily license” content without the consent of a foreign company if there had been an official contract. The law was passed despite opposition from the streaming industry. Though new Hollywood premieres outside already existing contracts aren’t supposed to be included, it seems that no regulating authority in Russia is going to care or check. The idea being instilled by officials is that in times of war and sanctions against Russia, pretty much everything is allowed. And for license holders, going to the court in the present situation seems too much of a hassle.

All of this has thrown the Russian film industry back decades, with people recalling the ways of doing business in the 1990s. Back then the number of movies being made and their quality radically declined due to a lack of state funding, while movie theaters were used as shopping malls, event halls and even car salons. Piracy was widespread with video parlors and shops selling illegal copies of foreign films popping up all over the country. It took years to build up the private movie theater industry and teach Russian viewers to pay for content.

The present situation threatens the whole industry. If people go back to watching movies online illegally, then why would they bother to pay for a ticket or subscription again, especially as their incomes have dwindled in line with the general economic decline? If the government turns a blind eye to such blatant violations of the law, will it support local businesses when their rights are violated? Understandably the streaming services and biggest movie chains fear that this rise in piracy encouraged by the government will eventually damage their long-standing relationships with Western partners – as they still hope to maintain them.
Karen Shakhnazarov, 2013. Source: Wiki Commons
Great times for Russian cinema?

Among “patriotic” Russian filmmakers (generally those who follow the Kremlin's ideological line), it has been a mantra for a while now that the domination of Hollywood content has hampered the development of national cinema. A longstanding struggle has played out to make more room for Russian blockbusters during the most profitable periods of the year, while talk about the need for an obligatory quota for Russian films in movie theaters has never faded. The share of Russian-made movies never surpassed 30% of the national box office (except for 2020 when the release Hollywood blockbusters was put on hold worldwide). Thus, the present situation might seem advantageous for the Russian film industry, and some influential people like Karen Shakhnazarov, the head of Mosfilm, the biggest state-funded film studio, actually praised the pullout of the major Hollywood studios, saying that it provides more opportunities for local filmmakers.

However, the reality might not be so rosy, as the movie business in Russia is a complex structure in which the collapse of one part might have a massive domino effect.
“The loss of revenues for movie theaters and streaming services means less money for the industry to improve service and develop production."
In addition, if movie theaters close all over the country or the quality of screening deteriorates due to a lack of Western hardware, where do you show all the Russian movies?

To account for the shortage of foreign content in movie theaters and on streaming services, Russian filmmakers have to double or even triple production volumes. That already sounds like a challenge given the present state of the industry, which has constantly complained about a lack of qualified professionals, especially screenwriters and showrunners. But with the rising cost of filmmaking – highly dependent on Western hard- and software – this might prove even harder. And the difficulties don’t end with production. Disney, Universal and Sony not only brought Hollywood content to Russia, but they were also among the biggest distributors of local films, both blockbuster and auteur cinema (sometimes even investing in production, like with the top grossing trilogy Last Knight produced by Disney’s local office).

If we step back from this business paradigm, there is another important issue – that of artistic liberty, or rather it narrowing. The big screens were already devoid of pretty much anything risky long before the invasion, but the streaming services enjoyed more freedom and tried to push boundaries in their original productions oncontroversial topics like politics, LGBTQ relations and social problems. However, government control over what can and cannot be shown online has tightened over the past two years and will very likely become even tighter since the beginning of the war.

Some of these censorship measures are covert and some are public – like a new law being discussed in the Duma that would forbid any “propaganda of non-traditional sexual relations” (up until now it was only restricted to minors), including movies and TV series. Very often, however, it just “goes without saying” – for example, the critically acclaimed movie Captain Volkonogov Escaped that talks about 1930s repressions (and where you can find many parallels with the present) hasn’t been banned officially, but “everyone understands” that it can’t be released now. Still, the most effective control has always been financial: projects that go against the state doctrine simply won’t get funding. And the state is still one of the most important and influential investors when it comes both to blockbusters and auteur cinema.

Understandably, many creative talents simply don’t want to keep working in such conditions. Since February dozens of filmmakers, well-known and little-known, have left Russia. The main reason was ardent disagreement over the war in Ukraine and fear of being prosecuted for their views, but another reason – not the least important for many – was the realization that it would now be impossible to create what they want to create. That their ideas and talents are no longer welcome in their own country.
Poster for Leviathan (2014). Source: Wiki Commons
Among those who publicly left Russia and strongly criticized the war were successful actors like Chulpan Khamatova, Ingeborga Dapkunaite and Anatoly Bely and directors that had made some of the most remarkable and widely-discussed movies of the preceding decade: Kirill Serebrennikov, Kantemir Balagov and Kira Kovalenko. Double Oscar nominee Alexander Rodnyansky, who was born and started his career in Ukraine, also left Russia, where he had produced both huge blockbusters like Stalingrad and critically acclaimed films like Balagov's Beanpole and Andrei Zvyagintsev's Leviathan.
“Rodnyansky, an ardent critic of the war and the Russian regime, also announced that he would shut down Kinotavr, the most important Russian film festival, which he owned and hosted."
That came as yet another blow for Russian cinema, as it was the place where new talents emerged every year.

In recent years, Russian cinema had been getting more and more international recognition. Foreign streaming services like Netlfix, Amazon and HBO Max started buying the rights to many Russian films and series such as To the Lake, Major Grom Plague Doctor, Gold Diggers and Dead Mountain, while Netflix went as far as to order at least four Russian originals, among them a new adaptation of Leo Tolstoy’s Anna Karenina. Thirty-one-year-old Kantemir Balagov was invited to shoot a pilot for HBO’s The Last of Us; 29-year-old Alexander Kuznetsov played one of the major roles in the last Fantastic Beasts movie.

The year 2021 marked success for Russia at worldwide festivals: Serebrennikov’s Petrov’s Flu and Natasha Merkulova and Alexey Chupov’s Captain Volkonogov Escaped made it to the official selections at the Cannes and Venice film festivals respectively, while Kira Kovalenko’s Unclenching the Fists received the main prize in the Cannes Un Certain Regard program.

Now many of the foreign deals and coproduction projects have been put to an end. Hopefully, the filmmakerswho left will still be invited to festivals (like Serebrennikov) and continue their careers (like Rodnyansky and Balagov). But the majority of filmmakers who stayed in Russia and who have not publicly opposed the war (opposition is now punishable by law) will have to work in an unfamiliar isolation from Western cinema.

Isolation never ends well for any culture, especially in a world where state borders mean less and less. The quality of Russian films and shows – some of which reached world class before the war – will likely deteriorate due to production difficulties and rising censorship. Filmmakers will go back to expressing their feelings in Aesopian language, just like they and their late colleagues did in Soviet times. And even if the movie industry survives the current hardships, it will take years for it to return to its pre-war level.
Share this article
Read More
You consent to processing your personal data and accept our privacy policy
  • Privacy Policy
  • Contacts
Made on
Tilda