Steep new licence fees will spell losses for Russian cinemas

Plans by Russia’s Ministry of Culture to dramatically increase the exhibition licence fee for large-scale film releases in the country will have a detrimental impact on the box office, research suggests.

According to a study by Nevafilm Research, quoted by Russian newspaper Kommersant, the price hike will reduce box office takings by 7 per cent or 3.5 billion rubles ($60.5 million).

The licence fee increase — due to come into force on 1 January 2018 — would see the fee for each film jump from 3,000 rubles ($53) to 5 million rubles ($88,420), making it near impossible for most indie film distributors to profit from a Russian release. Last month, the ministry reneged on its commitment to apply the new fee only to films appearing on more than 100 cinema screens in Russia, instead applying an exception only to films screened on fewer than 100 separate occasions. The ministry has also added a harsh penalty to encourage distributors to pay up on time — a potential total ban on future film screenings anywhere in Russia.

Analysts calculated that in the worst case (yet entirely possible) scenario, the number of foreign releases will decrease by 72 per cent to 115 per year, the number of distributors will decrease ninefold, and most independent distributors will close.

Afisha Daily notes that through this initiative, the authorities plan to clear the market of “low-quality” foreign films and collect 2.2 billion rubles ($38 million) annually to support domestic cinema. The fee will also apply to Russian films, but this will be refunded by the Cinema Foundation of Russia (Fond Kino).

Source: Afisha Daily