National cinema chains, which faced losses of billions of dollars in 2022 after the cancellation of Hollywood premieres due to a special operation, were unable to recover in 2023. Their revenues grew by an average of 40%, but a year earlier The figure fell even more rapidly, so such growth could not improve the situation.
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As follows from the financial statements of the combined chains Formula Kino and Cinema Park, Cinema Star and Karo, which RBC studied, the companies were able to increase revenues by only 40%. And the benefit that some market participants were able to receive is not associated with direct content rental activities, but with the revaluation of assets. At the same time, the benefits were insignificant; most cinema chains remained unprofitable.
“Formula Kino” and “Cinema Park” (JSC “Cinema Park”)
The company, which operates 60 cinemas across the country (~10% of the market), managed to close last year with a net profit of 1.9 billion rubles. Revenue amounted to 6.6 billion rubles (+44.7%). It is observed that the dynamics of financial indicators is partly due to technical criteria.
According to the company’s general director, Alexey Vasyasin, the profit obtained in 2023 is related to the recovery of the value of assets that depreciated between 2020 (during the pandemic) and 2022 (at the beginning of the crisis).
Another legal entity managed by Cinema Park JSC, RSM LLC, posted even higher losses than in 2022. Although the structure increased revenue by almost 49% to 1.6 billion rubles, the net loss amounted to 703 million rubles. This is 33% more than the 2022 results.
“Karo”
The Karo chain operates 32 movie theaters and occupies 4.4% of the market. Last year, the company managed to reduce its net losses by 87.6%, but still failed to turn a profit. The losses of Karo Film Management LLC amounted to 166.8 million rubles. Revenue grew in line with the market situation – by 44.1% and amounted to 3.2 billion rubles.
“Movie star”
Similar figures have Cinema Star, which has 23 movie theaters. Revenue growth was 41.5% and the company received 695.5 million rubles. The network managed to make a profit against a loss of 40 million rubles in 2022. But it amounted to only 1.4 million rubles. At the end of 2021, when the industry was beginning to recover after the pandemic, Cinema Star’s profits amounted to 9.3 million rubles.
The president of the Karo network, Olga Zinyakova, commenting on the state of the market, points out the lack of quality content and marketing difficulties. Currently, there is no way out of the crisis in the sector, says Zinyakova.
“We have just started to find solutions to the new reality,” explains the president of Karo.
The day before it became known that the Association of Cinema Owners (AVK) proposed supporting nationally produced films and rejecting pirated screenings of foreign films for three weeks.
This is not the first attempt to increase demand among Russians for domestic releases by limiting foreign content. On April 25, the Ministry of Culture did not issue any distribution certificate for British director Guy Ritchie’s new film, “The Ministry of Ungentlemanly Affairs.”
At the same time, one of the producers of the film is the general director of Yandex. Studios” and content director of Yandex media services, Olga Filipuk. This follows from data about the film on Kinopoisk, owned by Yandex.
Author:
Natalia Gormaleva
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
