What minimum threshold for box-office must be if the movie was funded by state budget in Russia?

Russian minister of culture Vladimir Medinsky proposed to implement new criteria in order to determine whether investments at the account of state budget were effective; in other words whether companies, who received state aid for production of movie, have made their job good and produced successful movie. It means the more people watched movie in cinema, the better company works.

Each hundred roubles, spent on a movie, must bring one viewer to the cinema, Medinsky believes. This is should be the minimum threshold for the company, receiving financial aid from Russian state budget for movie production, in order to be effective and eligible candidate for financial aid in next time. If the company fails to comply with threshold it falls out of priority list of companies, who can be granted a funding in first row.

There is a Cinema Fund in Russia. This Fund receives money from state budget under agreement concluded with Russian ministry of culture. This agreement is to be signed each year. Money, received by the Cinema Fund, is a state aid for production of movies. This Fund allocates this money between successful companies in movie industry. The sum of aid depends on quantity of projects approved by the Fund. But the status of successful company does not take into account proportion between money, spent on production of movie, and quantity of viewers. Medinsky wants to change it.

Certainly such novation is not welcomed by movie producers. It can change some important things. First of all, it can affect or change a status of successful movie company. If the company loses its “gold” status thanks to new main criteria, it can be deprived of state aid for future projects. Some experts believe Ministry of culture did not consider or analyse the consequences of this criteria. Sometimes it is impossible for some movies, perhaps good, to meet minimum threshold for box-office.

When movie producers said that under new rules there will be no companies with “gold” status and almost nobody will be eligible for state aid, MinCult explained that “hundred roubles – one viewer” is ratio for all movies produced by one company, claiming for status of leader in industry, and released during the last three years, but not for one movie of such company. According to MinCult this is about state aid for movie companies, which is to be received on non-refundable basis. Moreover producers from leading movie companies upheld such ratio, argues MinCult.

What else has been proposed to improve efficiency of state financing? The total sum of state aid for one movie must be not more than four hundred million roubles. The term for production must be maximum three years. If the experts sceptically assess the box-office of future movie, i.e. less than 250 million roubles, the state aid for such project is not to be provided. Before the project to be approved by Cinema Fund, producer must know the date of release and can change it only three months prior to date stated at the approval. Medinsky also wants to receive a right to veto if the movie is not suitable, like “Leviathan” by Andrey Zvyagintsev.

As a result it was agreed that proposed ratio “100 roubles – 1 viewer” is ideal of effectiveness. Companies must do everything in order to achieve such figures. But it is not a must. Effectiveness of financing will be evaluated with taking into account this ratio, but if the company did not comply with this requirement it will be not necessary to exclude it from list of leading companies for purposes of funding from state budget.