21 november 2011

Prime Minister Vladimir Putin chairs a meeting of the Government Council on the Development of the Russian Film Industry

“We are all aware of the persuasive power of the cinema and its potential to convey human emotions. I believe that it should be a constructive force that elevates audiences.”

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, friends and colleagues. It so happens that we mostly talk about money at meetings of the Council on the Development of the Russian Film Industry, which is only right. Most likely, we will talk about it again today.

I had the pleasure of visiting Mosfilm Studios yesterday and watching the film "Vysotsky". Excellent work. Once again, I would like to thank the actors, producers and the director. The film is definitely a success. They instantly started talking about the financial side of the film industry as well. This is really important: we need to create an effective framework to support Russian films, expand the distribution network, renovate and build industry-specific facilities and promote Russian films internationally. However, we shouldn't forget about the content, which is the most important part of any film. Certainly, you need money to make a movie. You also need a stable film market, a clear outlook for the future of the industry and, certainly, freedom of speech.

However, I suggest that we talk about the creative part of the filmmaking process, discuss values that films should promote, as well as the social value of the art of film. We are all aware of the persuasive power of the cinema and its potential to convey human emotions. I believe that it should be a constructive force that elevates audiences.

You may say these are fundamental truths, but I believe that many would agree that they don't always play a role in filmmaking. Sometimes we see films that aren't any better than tabloids. I am sure you are well aware of this. I am, because this issue is often raised when I meet with non-profit organisations. They always talk about cultural primitivism and occasionally immoral models of behaviour. We shouldn't forget that the film industry is a high-tech industry that develops hand in hand with scientific progress and acquires new means of expression and, therefore, new powers over the minds and souls of audiences. With this in mind, it is very important to make sure that the art of cinema has a worthy and substantive mission. This is no less important than the ability to shoot beautiful and breathtaking scenes or great acting.

Let me make clear right from the start that the issue is not about imposing anything on you or making you follow some pre-set ideological forms. I am talking about self-control and responsibility. Just think of the well-known Hays Code that was adopted in the United States by the Motion Picture Producers and Distributors of America in 1930. The signatories undertook not to make films that would undermine moral standards of the society, empathise with criminals, neglect religious or family values, or promote violence or drug and alcohol use. As you may know, this code was the unofficial national standard in the United States for as long as 37 years, and its formal repeal hasn't changed the way filmmakers or filmgoers appreciate the quality of motion pictures.

Clearly, many of you sitting here, including me, can say that they don't see any of this code's precepts [in American films]. I wouldn't go quite as far as that. The fact that is was in effect for 37 years has created certain mindset and certain ethical reference points, because more than one generation grew up with this code and were guided by its values.

I believe it's a good idea to use this positive experience and create a similar code of internal ethical standards for the Russian film industry. Please understand that the issue is not about some strict requirements to regulate creative license, but rather about moral choices to be made based on goodwill and a sense of responsibility of filmmakers. In addition, the implementation of this idea will be very useful for the development of future film directors, screenwriters and producers. I suggest that we get back to this discussion later when we discuss professional training of film industry workers, which we have on the agenda today.

There is one more point. The content of feature films, television and radio programming is a subject of ongoing public debate, as I have already mentioned, and this is not just empty talk. More and more products featuring violence, murder and foul play make their way to our cinema, television and radio broadcasts. More than that, children and young adults have unfettered access to them. If the state starts to unilaterally dictate its terms and ban certain shows or broadcasts this will certainly be perceived as an infringement upon creative rights and freedoms, and the return of censorship. Of course, we are not going to do this. I am convinced that the cultural sphere, including the film industry, should be governed by laws of corporate ethics, and you are the ones to decide what kind of rules they are going to be.

Let's move on to our work. Mr Avdeyev, minister of culture, please go ahead.

Alexander Avdeyev: Thank you, Mr Putin. I believe that the issue that you have raised is the main issue of our public conscience, because corrupted and deformed public values adversely affect the development of values in each individual. This is a very important issue and it’s good that it was raised at the level of the prime minister.

A very good article by Daniil Dondurei (Russian cultural historian and editor-in-chief of the Art of Cinema magazine) was published recently. I brought it with me and I’d like to quote it now: “The destruction of the public moral system is a stealthy process. It is a disaster similar to a civil war.” People don’t die physically - they die through the destruction of values.  We don’t model these values through culture, art, cinema or television. Instead, we observe nonchalantly as they are being destroyed. It’s a major social problem, and we must sound the alarm.

The subject of my speech is the ministry’s work to fulfill the decisions of the previous meeting of the government council held in February 2010. As you may remember, we decided to amend legislation. At the meeting, we discussed an issue that is very important for many filmmakers who are financed by the Ministry of Culture, because money received from the budget were taxable, whereas those coming from the fund were tax exempt.

Vladimir Putin: No one likes to pay taxes. Is my understanding correct?

Alexander Avdeyev: Yes.

Vladimir Putin: I have recently congratulated the Tax Service on their professional holiday, and I raised this issue as well. Perhaps, they don’t like to pay taxes themselves, either. No one does. However, we must pay; otherwise we won’t be able to support the government. Certainly, this sphere must be… Standards of fairness should be maintained there like nowhere else, that’s true.

Alexander Avdeyev: Mr Putin, I am pleased to report that the fairness standard was honoured, and this unfair tax on subsidies that filmmakers received from the Ministry of Culture was repealed. I can give you the date: It’s Federal Law No. 245 of July 19, 2011. I would like to thank the Finance Ministry, because they were instrumental in helping us repeal this tax.

Unfortunately, our proposals to cut the amortisation period of film rights and inclusion of costs involved in the distribution of trailers in expenses in order to decrease gross taxable income were not included in this law, but we keep working on this together with the Finance Ministry.

During the previous meeting of the council, we raised the issue of lowering import and customs duties on high-tech equipment used in running films at cinemas, i.e. the equipment that is imported and not manufactured in Russia. The rates ran as high as 50%. I am here to report that we contacted the Customs Union’s commission with a proposal to set the rates to zero. Such a decision was adopted on August 16, 2011, when the commission of the Common Customs Union amended the law appropriately (amendment No. 760) and the rate was set to zero in Russia, Belarus and Kazakhstan.

Third, there was a collective desire to have federal subsidies provided for co-financing of the construction of high-tech cinemas in small- and medium-sized Russian towns. Again, I’m here to report that the ministry has already included in the budget claim for 2012, 2013 and 2014 expenses associated with the provision of subsidies for construction of such cinema centres in the amount of 400 million roubles yearly. The proposal is now being approved by the Finance Ministry, and we hope for a favourable decision.

Now, as for the measures designed to promote the production, distribution and screening of Russian movies for children and young adults.  First of all, the ministry had budgeted subsidies for upgrading the infrastructure of major film studios, primarily that of Soyuzmultfilm, in its Russia’s Culture Programme for the period until 2020. We have made provisions for financing events aimed at promoting the distribution of films for children and young adults, in particular, subsidising the screening of these films at cinemas. In addition, we have reached an agreement with the Federal Agency for Press and Mass Media’s board of experts on providing similar financial support for production of socially important TV products and films for children. In other words, we are going hand in hand here: We will support feature films whereas the agency will help promote televised films.

Vladimir Putin: You are aware that Disney plans to come to our market on Channel 7. I believe this will require additional support for Russian filmmakers...

Alexander Avdeyev: Yes, Mr Putin.

Vladimir Putin: ...in the sphere of animated films. Please think about this. We cannot say ‘no’ to them based on existing legislation and, perhaps, this is not a good thing to do anyway, because viewers want to see these films, but this does mean however that the Russian animation industry must be up to the challenge, and we must help it. Please think what you can do to help them additionally.

Alexander Avdeyev: We will. We are expecting to receive 500 million roubles to finance the production of our animated films. A portion of these funds in the amount of 335 million roubles will go to the cinema fund and 165 million will be used to make films with the support of the Ministry of Culture. We are expecting these funds to be released before the end of 2011.

Next comes the yet unresolved issue of amending tax legislation to exclude receipts obtained from the distribution and other use of films for children and young adults from taxable income of film industry organisations.  Article 7 on advertisement needs to be revised as well. Mr Putin, here’s what I’m talking about.  We have short – up to 15 minutes – films for children, and these films run without commercial breaks. It’s illegal to run commercials during children shows. Some film industry professionals point out quite legitimately that TV channels refuse to show these films for this particular reason and ask us to authorise commercials during these 15-minute shows. However, we have also heard the opposite opinion. Other people from the film industry are totally against running commercials and use the same argument: These are short films for children, and there’s no point in running commercials during them.

Vladimir Putin: What’s the target audience of these commercials? These shows are watched by children. I’m not quite sure why anyone would want to run commercials during such shows.

Alexander Avdeyev: That is why we are taking time to make the decision, because the ministry also thinks that taking cue from the advertising people and making extra money at the expense of the quality of shows for children is not an option so far. So, we suspended this request that was filed during the previous meeting of the council.

Vladimir Putin: Let’s give it some thought and return to this discussion later. I’m not sure I understand the point: children watch films for children. Then comes a commercial break, supposedly, about products for children. So what? Children won’t go shopping after they see it on the TV. Why would advertising people want this? I don’t understand this.

Alexander Avdeyev: But in this case, television networks need to show these films because they're interested in commercials.

Vladimir Putin: Let’s get these incentives…

Alexander Avdeyev: We will continue the discussion with the heads of these networks, though it has not been easy so far…

Vladimir Putin: It might be necessary to subsidise, to provide some support… We can think about this.

Alexander Avdeyev: Perhaps my colleagues will say what they think about this?

Vladimir Putin: Sure.

Alexander Avdeyev: I mentioned the 500 million roubles going towards animated films. In addition, the ministry has submitted a proposal to the government on increasing subsidies for the production, distribution and screening of films, and for promoting films for children and young adults and for educational films. We have put aside 1.5 billion for these subsidies in the 2012 budget.

Now, the sixth point has to do with improving the training of personnel in the film-making industry. If you recall, at the council meeting they emphasised the need to increase the number of educational institutions for this industry. We are currently converting four vocational schools into VGIK (National Institute of Cinematography) affiliates. These schools are the Irkutsk School of Cinema and Television, the Sovetsky Cinema School in the Kaliningrad Region, the Cinema and Video Technical College in Sergiyev-Possad and the Cinema School in Rostov-on-Don. We will turn them into VGIK affiliates in the near future, and students will be able to complete higher education programmes at five institutions: VGIK and these four affiliates. Through these channels, we will attempt to compensate for the shortage of script writers, directors, producers and animation specialists.

And the seventh point concerns our efforts to improve the material and technical plant of St. Petersburg State University of Cinema and Television. The ministry’s proposal regarding this is passing through the relevant departments. This process has been delayed, but this may be a good thing because in the meantime, we have developed the idea to establish a research and educational centre of St. Petersburg University based on a number of research institutions (the Research Film and Photo Institute, experimental production, and the Moscow Design Bureau of Filmmaking Equipment). This centre will help us expand the research and technical plant of the university and upgrade the design and production of equipment nationwide. In addition, it will be a promising educational institution.

The eighth point is about improving the material and technical plant of Gosfilmofond (State Film Archives) and invigorating its activities in federal districts. Mr Putin, we have included undertakings on its reconstruction into the Russia’s Culture programme for the next four years. I'm sure everyone remembers our meeting at Gosfilmofond. We have allocated 750 million roubles for this purpose. Mr Borodachyov (the Gosfilmofond director) is not here, but we have worked out all plans and amounts with him. They have been included into the draft federal budget for 2012 and for the 2013-2014 planned period, and it was endorsed by the Federal Assembly in the first reading. We hope that everything will proceed smoothly.

The ninth point is about stepping up the drafting of legal acts designed to restrict the illegal distribution of audio and video products on the Internet. We have agreed on many points with other departments and submitted a draft federal law (in agreement with the Interior Ministry, the Federal Customs Service, the Justice Ministry, the Finance Ministry and the Communications Ministry). This draft gives the Ministry of Culture the authority to register copyright violations on the Internet and compile relevant protocols. We need to have some kind of inspection service, and we suggested setting it up on the basis of our ministry. Unfortunately, the government commission has suspended this issue for the time being because Rospatent (the National Agency for Patents and Trademarks) is undergoing a reorganisation and there was a proposal to assign it the same functions. We are now waiting for this reorganisation to be completed in order to decide who will take on this responsibility – whether the ministry or the agency. In any event, there should be no redundancies.

The 10th point concerns proposals on protecting copyrights to audio and video production. We have a number of proposals on this score which are now being reviewed by the Ministry of Economy, the Interior Ministry, the Communications Ministry and the Justice Ministry, all of whom are working towards that goal. Mr Medvedev spoke at length about this subject at the recent the G20 summit in Cannes, France. Following the results of the summit we’ll make some adjustments and move on. This is a complicated issue.

The 11th point. At the recent council meeting there were proposals on establishing differentiated tax deductions from film distribution profits. Foreign films should be taxed more heavily than domestic ones. We can help subsidise our filmmaking industry in this way. However, this may complicate our entry into the WTO. We’ll come back to this issue after our accession to the WTO. 

Vladimir Putin: Well done.

Alexander Avdeyev: This is the position of the Ministry of Economy, and it is fair.

Vladimir Putin: All right.

Alexander Avdeyev: The 12th point is a complicated issue, a matter of principle. We must do all we can with this. I’m referring to Kino City. At the coordinating council of the regional ministers of culture (held in Grozny two months ago) we analysed this project, which was based on the example of Chechnya. All regional ministers and other leading officials supported us, but the review of documents has been unreasonably delayed. We reported to the government that we had not managed to coordinate this with the departments. Regrettably, no money has been allocated so far, and this seems to be a major difficulty. We have requested for Mr Zhukov to convene a meeting involving the Finance Ministry, the Ministry of Economy, the Regional Development Ministry and Vnesheconombank in order to clear up this issue.

That's all that I have to report. Thank you.

Vladimir Putin: Good. Thank you very much.

* * *

Prime Minister Vladimir Putin visited Mosfilm Studios yesterday and watched the film "Vysotsky – Thank You for Being Alive." He also met with the film crew and relatives and friends of the renowned musician and actor Vladimir Vysotsky.

First Channel CEO Konstantin Ernst, who was one of the producers and writers of the film, told the prime minister that the film covers one of the most dramatic periods in the life of Vladimir Vysotsky, when his heart stopped beating during a tour in Uzbekistan in 1979.

Mr Ernst said that the crew started shooting the film five years ago. "We spent lot of time looking for an actor who could play the main character, knowing in the back of our minds that we were unlikely to find anyone suitable. Finally, we came up with the idea to combine outstanding acting, makeup and computer graphics. The featured actor is not credited," he said.

The other actors have said that even they don't know who played Vysotsky, since the actor invariably showed up to the set in makeup.

"Still, someone did play this role?" Vladimir Putin asked.

Konstantin Ernst said that he wouldn't disclose the secret until after the prime minister had watched the movie.

"Rest assured, I will not tell anyone," said Vladimir Putin.

 

Prime Minister Vladimir Putin discussed film industry issues with the film crew during his visit to Mosfilm.