Nothing to see in shopping centers

Representatives of creative industries and the Union of Shopping Centers proposed that the Ministry of Economy launch a federal project to produce an additional 550 Russian films by 2030 with a total budget of 200 billion rubles. Market participants note that while domestic films cannot replace foreign films in both quality and quantity, cinemas, which often act as anchor tenants of shopping centers, are closing. The implementation of the plans would actually double the release of films in the Russian Federation.

“Kommersant” has read the letter of the ANO “Center for the Development of Creative Industries” and the Union of Shopping Centers (STC; unites Russia, Belarus, Kazakhstan) to the Minister of Economy Maxim Reshetnikov dated February 19. The authors propose that the government support the release of at least 550 additional domestic films until 2030 with a total budget of about 200 billion rubles. “This will help avoid a large-scale crisis in a number of sectors of the creative economy, including film production,” the letter says.

For shopping and entertainment centers whose anchor tenants are cinemas, the decline in the number of films due to the departure of foreign producers has caused a sharp drop in attendance and a decline in cinema rental income, the letter notes: “The construction of new cinemas has stopped, and a number of owners have been forced to refurbish part of the halls and dismantle equipment, chairs and sound insulation to avoid downtime of the premises.” In the shopping centers being designed in the Russian Federation from the beginning of 2023, cinema halls account for only 0.5% of the space, as stated in the Commonwealth Partnership report (see “Kommersant” dated September 22, 2023).

It is proposed to release 550 additional films in the format of a public-private partnership, including by concluding “intersectoral and interstate agreements on the production of content and software in the format of BRICS, SCO, EAEU and CIS.” The Center for the Development of Creative Industries is ready to take the initiative to conclude such agreements “under the tutelage of the Ministry of Economy and with the participation of representatives of specialized creative industries and the support of shopping centers represented by STC.” The Ministry of Economy confirmed receipt of the appeal, noting that the position “will be presented in due course.”

STC Vice President Pavel Lyulin emphasizes that in general the entire “sphere of entertainment associated with cinematic universes” has practically ceased to develop, “for example, branded stores with movie characters and merchandise, such as Disney, amusement parks in cinematic universes, games.” According to him, Russian films, “although they have caused a massive stir,” cannot completely replace Western films in terms of “quantity and quality.” He clarified that the shopping center’s attendance in 2023 compared to 2022 changed slightly, “but rental income did not grow against the backdrop of increased expenses, the tax burden and operating costs increased by up to 20%.” The Ministry of Culture and the ANO Center for the Development of Creative Industries did not answer Kommersant.

According to the Association of Cinema Owners (AVK), cited in the letter, in 2015–2021, the share of projects from Sony, Disney, Warner Bros., Paramount and Universal in Russian film distribution reached 65%. “Part of the collapse was avoided due to the practice of pre-show service, when foreign films are still broadcast unofficially, but such a solution is temporary, unreliable, not available to all cinema chains and does not allow the industry to develop,” the letter says.

At the end of 2023, the share of domestic films in the total box office of cinemas reached 60.6%, the revenue of Russian releases amounted to 22.9 billion rubles, as reported in the Film Distributor Bulletin. The head of AVK, Alexey Voronkov, notes that cinemas share “any initiative that is aimed at supporting networks and film distribution.” According to his forecast, the share of Russian cinema at the box office could reach 85–90% by the end of 2024, and total box office receipts could reach 40–45 billion rubles.

Yulia Yurasova, Daria Andrianova