#Ukraine's Movie Market: dynamics of its development and potential threats of “going back to USSR”

Despite economic difficulties, war in eastern Ukraine, there are still a number of national movies, successful film festival, and box office growth rates exceeding rates around Europe. Clearly, this shows Ukraine’s return to Europe’s film map. However, has Ukraine reached the western standards in the advancement of its movie industry or does it still remain under the influence of the typically Soviet principles of «state governance» in the field of culture? The question is open to debate... writes Jean Bagh .

The fall and revival of the industry.

The drama of Ukrainian cinema has become an inevitable part of the world film industry. At the beginning of the last century at times when stunning portraits of peasants in the movie "Earth" by Olexander Dovzhenko and the image of a children's stroller in "Battleship Potemkin" by Sergei Eisenstein defined the symbolism of cinema realism.

However, in the early 90's with the collapse of the Soviet Union, and the worst economic crisis, the Ukrainian film industry started to decline. The number of viewers in cinemas was reduced from 552 million a year in 1990 to 5 million - in 1999. The number of movies shot dropped from 45 in 1992 to 4 in 2000. In addition, the reorientation to the Russian film market progressed, and out of the 136 films created in Ukraine in the 1990s, 82 of them were filmed in Russian.

According to Bogdan Batrukh, the head of the company B & H distribution and one of the pioneers of the revived film industry in Ukraine: "In the early 90's there were only 3 cinemas in the country, it was necessary to build modern halls to distribute films. However, we had nothing to distribute. In Ukraine, films were not made and there was no legislative framework guaranteeing intellectual rights for western paintings. However, in 1995, when a corresponding bill was adopted, the possibility of distribution of Western movies led to the arrival of investors, who developed the movies industry. Today there are about 180 investors in the country, more than 500 cinema screens, and the dynamics of growth slowed down only because of the tragic events in 2013-2014. On the other hand, these events caused the revival of film production.

New time and a new movies policy

After the Revolution of Dignity in 2014, the agency, which deals with movies issues in Ukraine defined a new development strategy, and the State began to allocate significant funds for the creation of a national film product. In 2016, with the support of the Ukrainian state film agency, 14 movies were released. In 2017, according to President Poroshenko, who actively supports the need to revive the movies industry, "the state participated in the production of 47 movies, and ticket sales for national cinema increased 4-fold over the past year, and in 2018 the state is ready to provide $ 40 million in the development of national movies industry, One more significant factor which led to significant changes in the Ukrainian film market was the unification of the largest players of movies industry. They initiated the development of the law, "On the state support of cinematography in Ukraine", which includes the mechanism of “cash rebates”. In 2016 the law was adopted in the Verkhovna Rada, and in 2018-19 a ‘rebate’ is expected.

The Ukrainian movie market: the pace of development and its potential

Despite the country's difficult economic and military situation, the pace of development within the film industry in Ukraine is impressive. According to the data of the marketing experts of Media Resources Management, the total box office in the country increased by 27.3% (compared to 2016) (28% according to the State Statistics Committee) and reached $ 81.24 million in 2017. According to the Ukrainian state film agency, the number of spectators who come to the cinema halls is also growing steadily. In fact, it reached the growth of 15% and the number of cinemas - 10%.

Despite the increase in the average ticket price (by 25 cents, 12% growth), which is quite shocking for economically stagnant Ukraine, in 2017 about 28.9 million tickets were sold. This is 3.8 million higher than in 2016.

More impressive growth rates for ticket sales among European countries were shown only by Turkey. It was 22.1% according to EUROPEAN AUDIOVISUAL OBSERVATORY In general, in the 5 largest European cinema countries (France, Great Britain, Germany, Italy, Spain) growth does not exceed 1.5%, Italy even demonstrates a fall to 12.8%.

In 2014, the total box-office in Ukraine was about 120 million dollars, and after the "drawdown" in 2015, almost 70%, the market showed a tendency to fall. Against the backdrop of growth in 2017 to 80 million and continuation of the dynamics of + 12% in the first quarter of this year, we can talk about the prospect of returning to "pre-war" positions in 2018-19. In general, the volume  of the Ukrainian market is far from saturation. Using the Polish market as an example, with a volume exceeding 250 million dollars, the Ukrainian market can provide annual cash collections of 500-600 million dollars.

National Film Industry

A separate part of film history is not only the revival of the industry, but also recognition by the European art community. Proof of which can be seen by the winning the prizes at the Cannes Film Festival by "The Tribe" by Slaboshpitsky and Loznitsa's films, the premiere of the movie "When the Trees Falls" on Berlinall, directed by Maryssy Nikityuk and the release of a whole galaxy of young movie makers at the festivals of Class A. However, the question still remains: when will national movie production become part of the release volumes within the country and, maybe, outside it?

Now only the documentary epic "Winter on Fire", which was initiated by the Ukrainian cinematographic community and co-produced with Netflix made its way to a truly massive audience. The movie was seen by more than 6 million people. In Ukraine, the comedy "The Servant of the People 2", "DZIDZIO Contrabass", and the military drama "Cyborgs" came out at a serious level of rolling fees in 2017.

Discussions about how Ukrainian national cinema can become a rolling one are being held both in the professional community and by state-level policymakers. They are talking about the need to raise the quality and take into account the spectator interest, the specificity of marketing, where Ukrainian filmmakers make only the first steps.

It's sad when the beginners in production are accused of failures in the market by distributors, who prefer a western product that guarantees profitability. However, these are the inevitable costs of growth. Ukrainian filmmakers are now at the stage of bringing the average level of produced film material and the desire of distributors to work with national cinema is not determined only by quotas or a sense of patriotism, but by a real professional, competitive advantage of the Ukrainian film product.

An important factor remains the scope and specificity of state interference in the film process. In fact, we have two ways. We can go through the development and stimulation of the free film market, as it happens in the UK and the US, or to turn to the practice of the closed movies market, which characterizes the Soviet period.

The story of the state's obvious protection of the distribution of the patriotic drama "Cyborgs" has recently become the topic of numerous discussions within the film community, as the state harshly required distributors and cinemas to distribute the movie supported by Ukrainian state film agency.

The same situation comes with the numerous regulatory commissions, such as issuing state funds for production, and, for example, the nomination of movies for an Oscar. What criteria and who determines the fate of the movies: the market, in the person of independent producers, distributors, expert film community or a large army of officials and functionaries, as it happened in the recent past? Ukrainian mass media have, virtually, repeatedly pointed out the indications of the StateCinema's corrupt practices in the subjects concerning budget distribution.

Especially, in cases when local production companies who appeared to be a real failure at the regional levels, still kept receiving state financial support. «The criteria of whether a movie is successful or not are obvious, aren't they? - the Ukrainian colleagues stated. - Maybe, it is just convenient for the state budgeting institutions to leave them rather vague...»

The thing that causes wariness as well, is an attempt to attract regulatory state structures into the process of natural market formation. For instance, for the time being the State Antimonopoly Committee of Ukraine is considering yet another complaint in which weak indicators of film production of local filmmakers are being opposed to the audience success of the American movies' distribution. The very formulation of the question “Americans versus ours” refers to the period of the Cold War and the isolated market of Soviet film production.

However, while the debate on the degree of state control in the cinema market remains open, it is still possible to find the optimal balance in the levels of mutual influence as between the film industry of Private Companies and the State. This way, the Anti-Monopoly Committee, which went through a process of “reincarnation” after EuroMaydan of 2013-14, will surely take a balanced and market position, distancing itself from the reputation of the recent past, when, instead of anti-monopoly regulation, the AMC performed punitive tools in Ukraine with the view to redirecting corrupt flows.

In general, there is confidence that such facts will be only artificial problems of growth of the Ukrainian film industry, rather than evidence of preservation of the institutional memory of the Soviet period or the systematic misunderstanding of the state role and powers in the formation of civilized state policy even in such ideologically connected and emotional sphere, as cinema.

Let's hope that such problems of growth in the Ukrainian film industry is only a small laugh getter, and not a proof of preservation of the Soviet period or a systemic misunderstanding of the role of the state in formation of the civilized state policy in such sphere as cinema. Ukraine has all the opportunities to become a full member of the European film community, not only at the level of the art of cinema, but also in the movie industry. This is why we will readily see new, impressive data as the Ukrainian film market movies through a series of development.

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