Ongoing Growth Forecast for Russian Cinema Industry

Russian box office is set to more than double over the next five years according to the latest report, Cinemagoing Russia from leading cinema industry analysts, Dodona Research. Gross box office was US$412 million in 2006 and by 2011 will have passed US$850 million.

Fuelling this dramatic growth is ongoing multiplex development. A booming retail market means that numerous shopping mall and entertainment centres are being developed, often with cinemas as their anchor. The report found that the share of new cinemas built in shopping malls was 66% in 2006. Indeed, mall owners are entering exhibition and choosing to operate cinemas themselves as low rents make it a profitable option.

Russia's largest cinema circuit is operated by Karo Film with 124 screens. Like some of its competitors, it is choosing to fund further expansion through an Initial Public Offering. While initial development has focused on Moscow and St Petersburg, exhibitors are now turning their attention to the other nine cities with a population of more than one million.

Cinemagoing Russia found that the distribution landscape has also changed in recent years. In the past, the major Hollywood studios operated through local partners. However as revenue potential has increased, the studios have established their own offices in Russia. Only Warner Bros has yet to set up its own office there.

While Hollywood films are increasingly breaking box office records in Russia, there is also a strong domestic film industry. Around 50 to 60 Russian films are released each year and can capture up to 30% of total box office.

"These are exciting times for the Russian cinema business." commented report author, Alisdair Ritchie. "By 2011, we expect the annual average rate of cinema-going to have reached 1.2 visits, up from 0.2 visits just a decade earlier."