Distributors of unofficial content raise prices for film distributors
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As Kommersant learned, prices for digital copies of films by copyright holders who left the Russian Federation have increased by 10–13% since September. They are purchased by cinemas that provide “pre-show service”. Market participants cite the increase in prices as the increase in the number of blockbusters after the summer break and the complication of the supply chain. Now there is actually a monopoly in the segment, experts believe, allowing for the emergence of new suppliers.
Distributors of films presented in unofficial screenings are raising prices for cinema chains engaged in “pre-show service,” market sources told Kommersant. Thus, the price of a key (special equipment with which you can play a film a certain number of times) has increased by 10–13% since September, interlocutors say. The cost of keys averaged 100 thousand rubles. during the “premiere” period, and then decreased depending on the relevance of the content. The reason for the rise in price, according to Kommersant’s interlocutors, was the increase in the volume of supplied content after the summer break.
Studios Universal, Warner Bros., Disney, Sony and Paramount have stopped film distribution in the Russian Federation due to military operations in Ukraine. Due to the lack of foreign premieres, the number of cinema halls operating in the country in 2022 decreased by more than a third (see “Kommersant” dated June 30, 2022). In an attempt to retain viewers, some began showing unlicensed copies during “pre-show service” for domestic short films. This is done, for example, by the Mirage Cinema, Almaz Cinema chains, the Velikan Park and Greenwich Cinema cinemas. They didn’t answer “Kommersant”.
One of the largest distributors of keys is the translation and dubbing studio Red Head Sound (RHS). In June, it ousted WesternRus, which imported keys from Kazakhstan, from the Russian market. The latter explained the decision by the low return on releases and the cheap price of keys. However, market participants argued that the problem was different: major film companies were able to identify sellers of pirated copies for big screens, which complicated delivery schemes. On the RHS website, in a notice to film distributors, it is stated that “copyrights used in unauthorized exhibitions belong to the studio.” The company declined to comment.
Unofficial distribution of content in Russian cinemas is a business with huge potential and equally huge risks, “the segment is forced to work in the gray zone of copyright and is kept afloat solely thanks to the decision of the relevant government agencies to turn a blind eye to obvious violations,” say the authors of the specialized Telegram channel VODoverOTT . The state has all the means to suppress the display of pirated films, but “does not really use them,” confirms the head of the Internet Video Association, Alexey Byrdin. “The state does not allow a real shortage of content, supporting cinemas without budget expenditures,” adds VODoverOTT.
For now, cinemas are ready to tolerate price increases, since there are few content suppliers, and networks do not want to give up high-profile premieres, Kommersant’s interlocutors in the market say. “However, the content distribution segment still remains open to new participants who can offer alternative schemes for delivering films through friendly countries. It’s likely that the cost of rental copies will be regulated by competition,” they note.
The Association of Cinema Owners (AVK; unites more than 2.6 thousand cinema halls) expects that “the state will adopt appropriate legal acts that will bring the distribution of foreign films from unfriendly states into the legal realm.” Back in July 2022, AVK proposed to exempt cinemas from liability for showing films from foreign film companies that had suspended work in Russia (see Kommersant, July 29, 2022), but the initiative was not developed.
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