Russia/Eastern Europe

In Russia, where Hollywood product ruled supreme in the 1990s, locally produced fare accounted for 26% of a record-breaking box office of $565 million last year.

But Eastern Europe's landscape -- where some production markets and infrastructures are more mature than others -- is more patchy: In the Czech Republic, local films took a 32.5% share of the market last year earning more than $20 million of the total B.O. of $65 million. Poland was another strong market for local indie film with nearly 25% of a market worth $195 million in 2007.

In other countries, the indie position is not as strong, figures from the Strasbourg-based European Audio-Visual Observatory show: Hungarian local productions accounted for less than 13% of market share, despite generous 20% tax breaks given to local spend on national or international co-prods in the territory.

Romania and Bulgaria had just 4.5% and 1.2% local share, respectively, last year.

Although local product may struggle in some regions to grab more than a third of the market share, the success of national films in some countries suggests a strong demand for local subjects, directors and actors. "Empties," Jan Sverak's affectionate portrait of an elderly man's life working at a bottle-return kiosk (pic stars his father, Zdenek Sverak) was the Czech Republic's most successful film, taking $7.8 million at the box office.

Russia's latest blockbuster, "The Irony of Fate: Continuation," a remake of a cult 1970s Soviet film produced by the same team that made "Day Watch," took more than

$50 million over the New Year holidays, putting it in a strong position to head the pack in a total 2008 box office forecast to be more than $700 million.

Russian producers say the key to pulling in the big numbers for local film is attracting older audiences.

Central Partnership, one of Russia's leading independent production and distribution shingles, recently launched CP Classics to promote and distribute what Armen Dishdishian, its VP of international sales calls "smart" films.

Working in partnership with theater chain Cinema Park, which is dedicating one screen in each of its countrywide net of multiplexes to the new brand's films, Central Partnership hopes to lure back Russia's missing older audiences to cinemas.

"Russia has a core audience of 5 million mostly younger people who go to the movies most weeks. But to go beyond that, a movie has to appeal outside that core. Our business model is to have dedicated screens that build confidence for an audience that is not well catered for currently," Dishdishian says.

Launched in April, the label has already made an impact in its niche: "Chacun son cinema" grossed just under $44,000 in the first week of April, nearly $10,000 more than distributor Paradise release "Sleuth" and near double that of Russian Report release "Roman de gare."

Although locally made indie film is pretty healthy across Eastern Europe, international releases outside of the studio system struggle to find a market.

In Poland, Eastern Europe's new wave of critically acclaimed arthouse movies proved box office flops despite festival awards. Romanian Cristian Mungiu's Palme d'Or-winning drama "4 Months, 3 Weeks and 2 Days" -- which deals with abortion, a controversial story for Catholic Poland -- attracted just 26,000 viewers. Gritty Bosnian war drama "Grbavica," by Jasmina Zbanic, a 2006 Berlinale Golden Bear winner, sold just 16,000.

It's not all bad news for indie producers in these territories: Production incentives aimed at supporting domestic films (and co-prods involving local partners) exist in Poland, where the Polish Film Institute, founded three years ago, has an annual revolving grant fund worth $40 million, and Hungary, where 20% tax breaks on local spend for productions is available.

Moves are afoot in the Czech Republic to bring in a similar scheme.

In Russia, state support, averaging around $1 million each for projects that have secured state coin, was worth $120 million in 2007 and $140 million this year.

Agnieszka Odorowicz, head of the Polish Film Fund, notes that state support is a particularly important incentive for the current trend for shooting big-budget historical epics like Andrzej Wajda's war film "Katyn."

"The more expensive the film is, the more difficult it is to find the money; the big historic films Poland wants to produce now are very difficult to finance without this kind of help," Odorowicz says.

RUSSIA STATS
Total film production spend in 2007: $150 million-$200 million*
Anticipated production spend for 2008: $200 million-$250 million*
*estimated

INCENTIVES
Average grants of $1 million available for local productions and co-prods.

WEB
Russian State Agency for Culture and Cinematography: rosculture.ru

B.O. STATS
Top film: "Pirates of the Caribbean: At World's End" $30.8 million
Total box office: $565 million
Total number of releases: 350
*estimated

POLAND STATS
Total production spend in 2007: $25.5 million in subsidies to Polish productions
Anticipated spend for 2008: $37.5 million to be granted

INCENTIVES
Grants of up to $1million for local productions, $2million for co-prods.

WEB
Polish Film Institute: pisf.pl

B.O. STATS
Top film: "Shrek the Third" $4.1 million
Total box office: $195 million
Total number of releases: 260

CZECH REPUBLIC STATS
INCENTIVES
Tax incentives under discussion at ministry level.

WEB
Czech Film Center: filmcenter.cz

B.O. STATS
Top film: "Empties," $7.8 million
Total box office: $65 million
Total number of releases: 209

HUNGARY STATS
INCENTIVES
20% tax rebate on production spend within the country for local productions and local co-prods.

WEB
Hungarian film promotion office: filmunio.hu

B.O. STATS
Total box office: $56.7 million
Top film: "Shrek the Third," $4.2 million
Total number of releases: 205

PICKUPS
"Sleuth," Paradise, Russia
"My Blueberry Nights," CP Classics, Russia
"Eszter's Inheritance," Best Hollywood, Hungary