Dmitry Medvedev chairs a meeting of the Government Council on the Development of the Russian Film Industry


Opening remarks by Dmitry Medvedev:

Good afternoon, this is the fourth meeting of this Government Council. I hope that, as usual, we will have a frank and constructive discussion, as it should always be. I will not get into the powerful influence of cinema on viewers. You will tell me about it, but, as a matter of fact, it is clearly powerful. Russian cinema has enormous potential that hasn’t yet been fully realised. That is exactly why the Government is involved in promoting it.

If it were otherwise, we could have ignored this subject, leave it to the market and let it flow based on the premises of ideological correctness and non-interference. But our situation is still different from the situation in many countries, although the Russian film market is evolving at a fairly steady and rapid pace. Now you will tell me about all the market problems.

In any case, state support has increased in recent years. The figures are not amazing, but still it’s around 5 billion roubles a year, and in 2011 the total amount of funds allocated for the domestic film industry amounted to 6.6 billion roubles. Our film distribution ranks fourth in Europe and ninth in the world, which, of course, is indicative of the potential of the Russian film market. It's  obvious.

It is no secret, though, that many things are going downhill for the domestic film industry. Russian films are losing ground, primarily to US products, although we had a good period from 2002 to 2007 when Russian films were making up an increasingly large share of the domestic box office, going from 6% in 2002 to almost 28% in 2007. In 2008, this figure dropped by several per cent for various reasons, including, of course, the crisis, and continued to decline until 2011 when it stabilised at 16%, which is, of course, very low.

I would like to remind you about the important things that everyone in the audience is aware of. Some of you may not be very particular about the tax code for our film industry. We introduced soft financing for the production of Russian films and zero percent VAT for cinemas primarily to help Russian films survive on the domestic market. Let’s face it: this problem has not been resolved. This begs the question: shall we continue doing all this or shall we stop providing support? If we decide to go ahead and continue this support, shall we do it the same way we did before? How successful have we been? How do we motivate our film industry to make more good movies, on the one hand, and film distributors to show Russian films, on the other hand.

There is a proposal to introduce market quotas. That’d be quite a bold move and not everybody likes it. There is a proposal to end incentives. There is another proposal to provide appropriate incentives but to have the beneficiaries pay them back. All these ideas come with advantages and disadvantage, but, in any case, we will have to make decisions. These decisions are the responsibility of the Government and they cost money. Actually, that’s what the Government Council for the Development of the Russian Film Industry is supposed to do, in my view.

There are socially important films, films for children and young adults. There are animated films and family films. They enjoy special state support, and we should talk about this as well. In addition to such major issues, there are other issues of concern to film industry professionals and distributors. If you’d like to discuss them now, I’m willing to.


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