With Western studios pulling out of Russia, cinemas have turned to covert screenings of Hollywood blockbusters disguised as local productions. Meanwhile, legal streaming platforms are capitalizing on the void, experiencing a surge in revenue as they adapt to the new entertainment landscape.
Hollywood’s Departure Leaves a Void
The exit of major studios like Disney, Warner Bros., and Universal in response to the war in Ukraine left Russia’s cinema industry in crisis. Initial optimism that local filmmakers would thrive in the absence of Western competition quickly faded as cinema revenues plummeted.
By the end of 2022, losses for Russia’s largest cinema chains had reached billions of rubles. With no legal access to blockbuster content, many theatres began screening pirated Hollywood movies under the guise of short local productions. Films like Avatar: The Way of Water and Top Gun: Maverick found their way to Russian screens via “shadow distribution,” generating significant revenue despite their illegal status.
The Pre-Screening Strategy
Russian cinemas adopted creative methods to meet audience demand for Hollywood content. Tickets sold for short domestic films often came with a surprise bonus: a screening of a major Hollywood title. These “pre-screenings” proved immensely popular, with pirated films accounting for as much as 30% of box office revenue by the end of 2023.
This strategy allowed cinemas to stay afloat but also drew criticism from local filmmakers, who argued that piracy undermines efforts to promote Russian content.
Government Sends Mixed Signals
Officially, screening pirated films remains illegal, as does distributing any movie without state certification. However, enforcement has been sporadic, with the government appearing to tolerate piracy as a way to counteract the impact of Western sanctions.
In October 2024, Prime Minister Mikhail Mishustin announced plans to intensify inspections of cinemas screening uncertified Hollywood films. While this move suggests a potential crackdown, no significant actions have been taken, leaving theatres uncertain about the future.
Box Office Decline Highlights Challenges
The struggles of Russian cinemas are reflected in dismal box office numbers. In the first half of 2024, just 73.1 million tickets were sold, compared to 113.1 million during the same period in 2019. Industry leaders describe the lack of high-quality content as catastrophic.
“Pirate screenings take viewers away from official distribution,” said Olga Zinyakova, head of the Karo cinema chain. “Until this issue is resolved, legal content will be lost at the box office.”
Streaming Platforms Experience Unprecedented Growth
As cinemas falter, Russia’s legal streaming services are thriving. Platforms like Kinopoisk, Ivi, and Wink reported a 42% revenue increase in the first half of 2024 compared to the previous year. Collectively, they control over 97% of the market, with new subscribers flocking to these platforms for access to legal content.
Streaming services have benefited from the shift in consumer habits, offering convenience and a growing library of Russian films and TV shows. The trend suggests that audiences are increasingly turning to online platforms as cinemas struggle to meet their entertainment needs.
A Complex Road Ahead
For Russian cinemas, reliance on pirated Hollywood content may offer a short-term solution but raises long-term questions about sustainability and legality. With government action looming, theatres may face tougher enforcement in the near future.
Conversely, streaming platforms are well-positioned to dominate the market, with audiences shifting away from traditional cinema experiences. The continued growth of these services highlights the evolving landscape of Russia’s entertainment industry in the absence of Hollywood.
Looking ahead, the return of Western studios to Russia appears unlikely for the foreseeable future. In the meantime, the success of legal streaming services provides a silver lining in an otherwise challenging environment for Russian entertainment.