The global film industry is making steady progress, with box office revenue amounting to USD 38.6 billion in 2016. The industry is coming under an ever growing influence of new technologies for producing and selling content, and expanding international cooperation. The Russian film market is also growing and strengthening its international contacts, building a foundation for becoming an equal partner of leading film-makers in the future.
Film production is getting more and more globalised.
Producers from the US increasingly often choose Scandinavia and Asia for shooting: tax preferences, compensations, grants from local support funds increase the appeal of these regions for production companies.
In January 2017, amendments were introduced to the Council of Europe Convention on Cinematographic Co-production, making it easier for its members to partner up with film-makers outside the EU.
Streaming companies and online cinemas are securing their foothold on the film market, while emerging digital technologies of production and distribution are shaping up new trends.
Traditional and online cinemas are generally viewed as partners rather than rivals. But streaming giants like Netflix and Amazon Prime offer alternative channels for watching content and increase pressure on cinemas, trying to end their monopoly on screening new films.
In 2016, the Cannes Film Festival featured its first ever virtual reality programme; this year, it screened a pilot of short Russian spherical VR films under the title Russian VR Seasons.
In 2016, Amsterdam opened the first full-featured cinema based on the VR (virtual reality) technology. Many experts, however, believe that AR (augmented reality) has a greater potential, being simper and more accessible in terms of both production and consumption.
Development of film-making in Russia is a key focus area of the Strategy of State Cultural Policy until 2030, which was adopted in March 2016. Among other things, it envisages:
an increase in the number of cinema screens and in the average number of cinema visits per person a year, plus growth of the share of Russian films in distribution to 25% by 2018 and to 30% by 2030;
development and support of the animated film industry;
support to organising international film festivals in Russia and promotion of Russian films at international film festivals.
The year 2016 was quite successful for the Russian film industry in all basic aspects.
The share of Russian films in distribution totalled 18.4%, with their box office revenue hitting an unprecedented RUB 8.56 billion (a growth of 20% year-on-year). The number of cinema-goers coming to see a Russian movie reached 35.2 million people.
Russian films brought USD 35 million from international distribution, a surge of 100% from 2015.
Following MIPCOM 2016, an international exhibition of audio and visual content, foreign buyers’ interest in Russian content saw a substantial growth, with the number of offers and deals increasing by about 30%.
Russia is now developing international co-production and creating attractive conditions for developing film production across the country.
In 2016, the Association of Film and Television Producers and the Agency for Strategic Initiatives approved a project aimed to boost the investment appeal of Russian regions as centres of film production. The project envisages introduction of tax refunds for the money spent on film-making.
At the end of 2016, the Russian company Glavkino and the Russian-Chinese Fund for Development of Culture and Education agreed on setting up a production centre, Glavkino.China, which will be producing content for the Chinese cinema market.
In Russia, the sector of legal streaming resources is at the nascent stage: the domestic online cinema market totalled RUB 7.4 billion at the end of 2016.
The reason for the modest results of Russian online distributors is the wide spread of pirated content.
On June 1, 2017, a law regulating online cinemas will come into force in Russia, which, as experts believe, will help to reduce consumption of pirated content.
Still, there are a number of obstacles that the Russian film industry will need to overcome supported by the Government. These include fight against piracy, construction of new cinemas, and ensuring quality expert assessment of projects seeking public financing.