RUSCICO ON THE WAYS OF PENETRATION TO THE WEST WORLD DVD.
The company RUSCICO is known in the Russian market primarily as a film distributor, and only then as a DVD publisher of author's cinema and animation. Thanks to RUSCICO, Russian viewers got the opportunity to watch playing and animation films from Europe and Asia, to get acquainted with the work of the beautiful Japanese director Hayao Miyazaki. However, one of the key areas of the company's work is the release on DVD of the Soviet film classics around the world. Most releases are published jointly with local distributors and publishers, but there are also those that RUSCICO releases
Abroad. Obratetes foreign partners "BK-Action!" Asked Director General of CJSC RUSSIKO Production RUSCICO Roman Dikhtyara.
BK-ACTION! Your company is unique in that, first of all, it began to work in the foreign market, and only then - in Russia. How did the idea come up for releasing Soviet classics around the world?
ROMAN DICHTJAR: There was nothing unique about this, if you remember that time. The idea of the RUSCICO project appeared at the very beginning of 1999. If you look closely at our logo, then at the bottom of it you can see this number - 1999 Roman numerals. It was the eve of the 21st century, the era of digital technology. The trend of switching to digital media has become obvious. The most promising and technologically provided then was the DVD format. We made a bet on this format back in early 1998. After much reflection, discussion, discussions with several young and "aggressive" colleagues, the third publishing company DVD Group was created, which started producing discs with perhaps the most interesting foreign films dubbed into Russian. These were the catalogs of Carolco, Canal +, Gaumont, PolyGram (Universal) and not only. The whole event was the release of the collection of Luc Besson with the FIFTH ELEMENT in the final, the David Fincher GAMES with Michael Douglas, the BIG LEBOWSK Brothers and the catastrophe catastrophe LIVEN with Morgan Freeman and Christian Slater. To do this, I had to leave the post of chief expert in Sovexportfilm. In this company, I worked for 15 years and gained quite an interesting experience in selling and promoting Soviet domestic films abroad, especially in Europe and North Africa. In Russia, then, the DVD market was in its infancy, while abroad its sharp jump was observed. The growth curve of the monthly sales volume was approaching the vertical. All the majors started releasing new movies on DVD as on the main home video format and just started to think about translating separate classic titles to DVD. In Russia, as for the DVD, everyone was only interested in the mainstream. The main Russian distributors ("Soyuz", "VideoService", "Close-up", "Laser-Video", "Media-Most" and others) were concerned about how to earn more money in the lost market VHS market and optimally reinvest in The new format, without losing any of the alternative segments of the market. It was then that we came up with the idea to combine the past knowledge and achievements and try to form a high-quality collection of the best domestic films, taking into account the maximum linguistic diversity and the use of interactive DVD-for-
Mat. It was planned to implement it primarily abroad. In Russia, distribution primarily depended on the agreement with the rightholders. Thus, RUSCICO was the first company in the world to set up a representative national film collection on DVD. And on private funds.
BK-ACTION! How was the demand for the Soviet film classics abroad formed?
DIKHTYAR: There was definitely a demand for it. Nobody after all has deleted from the history of world cinema the names of such directors as Sergei Eisenstein, Alexander Dovzhenko, Vsevolod Pudovkin. But they occupied their modest place in the archival niche and had no commercial interest. Moreover, they belonged to the category of "public domain". In the period from the late 40s to the late 80s to the all-Union Sovexportfilm, which had a foreign trade monopoly, it was possible to bring to the foreign market a whole galaxy of interesting authors: Kozintsev and Trauberg, Donskoy, Stolper, Gerasimov, Bondarchuk, Chukhrai, Rostotsky , Fraz, Talankin, Alov and Naumov. There were also some representatives of the younger generation -Motyl, Panfilov, Menchov, Ryazanov, Shukshin, Konchalovsky, Tarkovsky, Mikhalkov and many others. Naturally, it was a question of limited rental in cinemas and one-off shows on TV. The highest goal was to visit the cinema halls by several tens of thousands of spectators, who would have an opportunity to see how the Soviet people live and work. This has never been an article of earnings, on the contrary - the subject of serious costs for promotion: dubbing, subtitles, advertising and information support, the organization of film weeks and festivals of Soviet cinema, support for distributors in the United States, France, Italy, Japan and India. In the 80 years with the advent of videocassettes in a number of countries, the distributors released an anthology of Soviet cinema on VHS - from 15 to 50 titles. Collections were sold rather sluggishly, the quality of the cassettes left much to be desired. But the main thing - it became clear which exactly 30-40 movies made 95% of the ticket office abroad. Based on this data, we decided to expand the library to 120 titles (the base number of the RUSCICO collection), restore and use everything that was created by the films earlier, create new remastered sound versions, providing multilanguage for several countries, to make additional interviews with the creators of the pictures And the actors involved in them, to create film-related inquiries on the basis of interactive features of the DVD format, to attract interest to the catalog of potential distributors and, finally, to enter the international market with access Finished product.
BK-ACTION! How did you find your future partners? Communication, festivals, film market? .. Or directly addressed, "from the street"?
DIKHTYAR: Both, and the other, and the third. Everything except the "street". "From the street" they began to address when the brand RUSCICO gained fame. At first, the information and statistics received at the film markets, festivals, forums were carefully analyzed, and a review of the specialized cinema press was made. It was necessary to isolate those few companies working in the field of DVD publishing and distribution, which in principle could be of interest to the RUSCICO project. And then we have already started to get in direct contact and in the mode of professional and creative dialogue (often quite long) to reach specific agreements. The conditions could be different, but the main goal was to convince the company to buy from us not the rights, but the finished product. Even if they were not satisfied with our universal versions, we were ready to adjust and create the image of the disk that was needed. The main difficulty was the need to ensure compliance with the production schedule by the number and quality of the disks produced. But we also asked for an advance payment!
BK-ACTION! Was there a biased or cautious attitude toward the Russian company?
DIKHTYAR: Absolutely. But not so much as to the Russian company - after all, the RUSCICO group included several foreign companies. To finance the project, we raised funds from three private investors. They acquired the main assets (primarily rights and equipment) for their own firms: English, Cypriot and Russian. Then a storage and logistics contract was signed with the Spanish firm Mundo Laser. Later in Brussels, the Belgian company Ruscico Bvba was established, which took over the organization of an online store and management of European distribution rights. All these companies operate under the trademark RUSCICO.
A cautious attitude towards us was explained not by the fact that we are a Russian company and we work under the brand name of the Russian Cinema Council (Russian cinematographic council). When a young company enters a new market, even for the West, and it is ambitious to announce the launch of an "unrealizable" project, this causes suspicion. Our interlocutors understood that we acquired exceptional DVD rights from movie studios for more or less "correct" positions and set ourselves the task of releasing 120 films in two years. Misunderstandings arose when we refused to sell the rights to 5 films from 120 to a specific territory, and asked to subscribe to the exclusive distribution of half the disks released on our production schedule. We made a special emphasis on the fact that we are only creating a full production cycle of DVD publishing "on a turn-key basis", but we know where the source materials are and how we can achieve our goal. We were helped in part by the gift of persuasion, and most importantly, the very first DVD-projects that were created on the knee, using trial and error methods: tales of Alexander Rowe, Lenfilmovskie OLD, Old Fairy Tale and SNOW KING, Mosfilm VI, RUSLAN AND LYUDMILA, ANNA KARENINA and SOLARIS. The result of the demonstration of the finished discs was stunning. Then really no one did anything like this, and we proved our viability. During the first year we managed to conclude several basic contracts for the supply of finished products with guaranteed sales volumes under the production schedule and hard-wired payment with IVC companies in Japan, Image Entertainment in the USA and Canada, Spectrum in Korea, Denifan in Switzerland, Moskwood in Holland, Artificial Eye in the UK and some others. It was these partnerships that allowed us to provide relatively stable funding during the most critical period of the formation of RUSCICO.
BK-ACTION! What other difficulties did your company face when entering foreign markets?
DIKHTYAR: At the end of the 1990s, there was a very complicated legal situation in the main Western film markets. Since the monopoly of Sovexportfilm, several illegal intermediaries have continued to offer TV and VHS rights to domestic films. The studios themselves have concluded many contracts for VHS-distribution of the main commercial names. Without any reason, local distributors often used an extensive interpretation of VHS-rights to the format of home video in general, including DVD. We had to dissuade them, resorting to resolving disputes in the pre-trial, and often in the courts. This is the situation in Italy, where we had to find a rather complex compromise with General Video. Noteworthy was the trial with the company Opening on the catalog of 30 films of "Mosfilm". The lawsuit almost completely blocked our work on the French market during the first 4-5 years. Equally difficult situation arose in Germany. Progress-Film Company and its partner Ice Storm, who previously dealt with cinematographic and video distribution on the territory of the GDR, refer to the timeless nature of the rights received from Sovexportfilm within the framework of intergovernmental agreements between the USSR and the GDR. Companies claim not only for DVD rights on the territory of the so-called new German lands (although during the validity of agreements such a format did not exist in nature), but also in the whole of Germany after the unification. More recently, Ice Storm, in conjunction with a major German magazine, has released all our fairy tales of Gorky's Film Studio with a huge print run, without even informing us. We were forced to initiate a serious trial for at least a couple of years. Another layer of constraining factors lies in the pricing plane. We face it in such markets as China and India. It's no secret that retail DVD prices vary from $ 2 to $ 4. Our agreement with Mosfilm envisaged payment of fixed royalties in the amount of $ 2.2 per disk after the advance payment was paid. With the technical cost of a disk of $ 1.5, wholesale sales are not possible systemically. Our proposals to the concern to move in these regions either to the sale of rights, or to the interest rate of royalties remained unanswered.
BK-ACTION! And how were things at the biggest and most advanced video market - American?
DIKHTYAR: In 2000, we managed to sign a contract for distribution of our CDs with one of the largest American distributors Image Entertainment. The company controlled several powerful sales networks and in the first packages there were about 40 names. This was a real breakthrough. And the best commercial package of "Mosfilm" was already sold on DVD to two other American companies and to the Russian catalog Image was not included. At the same time, under the contract with Image, we managed to reserve the right to sell the same discs in Russian language covers among the Russian-speaking diaspora in the United States. We, of course, took advantage of this circumstance, because the project at the stage of formation of the funds needed as air. Small deliveries were established through the three largest diaspora multimedia wholesalers. Imagine our surprise when in 5 years we got a lawsuit from a small company from Brighton Closeup. We were presented with a fresh (from 2004) agreement with the "Close-up" for reprinting in the NTSC system and the exclusive right to distribute the company's CDs to the US only in Russian. Close-up stated about the violation of its "exclusive rights to the original version", because on our disks there was an option to turn off the subtitles and watch the movie only in Russian. It's hard to imagine a more absurd charge! This process is still going on. Under the impact were not only we, but also remarkable, so much made for us by the company Image. And we are forced to provide our and its protection and spend on it fabulous money. As you understand, Image stopped its relations with Russian film companies, and today we are forced to work with other American publishers.
BK-ACTION! The purchase and extension of rights takes place mainly in Russia. How did your relationship with local partners and rights holders develop?
DIKHTYAR: Already in the process of preparing the business plan, we carefully verified the list of films that were to be included in the collection. The main criteria for the selection of paintings were their artistic significance, their rolling fate abroad in previous periods, as well as the availability of decent source materials and duplicated phonograms. As a result, 120 selected tapes were distributed by the producer studios as follows: 25 films of the Im. Gorky, 25 - Lenfilm studios, 20 - Georgia-Film studios and 50 - Mosfilm cinema concern. We presented the project management with the studio management, made very attractive commercial offers and, as a result of a whole round of negotiations, signed the relevant contracts. We took on all the investment risks, and the studios received solid advantages on the new and not yet developed DVD market. In addition to serious advances under royalty, they received a representative showcase of their products at a high quality level. In addition, they became owners of intermediate digital materials, claimed by television channels - an important source of revenue for film studios. Specifically, the negotiations took place in Tbilisi, where the rights were transferred to the authors of the films. With all the directors or their successors, we had to conclude separate agreements, assuring them of the leadership of the "Georgia-film". The main problems began to arise during the extension of rights. Contrary to the laws of economic logic, Lenfilm, and then Mosfilm, began to refuse to extend their rights and took a wait-and-see attitude, setting unfeasible financial conditions before us. Over the past few years, a significant block of paintings has emerged from the collection, which was the locomotive of the project. We patiently continue to insist on continuing our cooperation by offering alternative options. We expect that the statistical analysis for the last two years of work in the foreign market will allow the studio management to refute, in our opinion, the erroneous thesis that "selling DVD rights for individual films to individual territories is more effective than selling a finished product."
BK-ACTION! The first DVD-editions of the Soviet film classics RUSCICO can boast of restoration, five-channel sound and additional materials. For many countries this is common, but for Russia, such releases are still an exception to the rules. Why was it spent so much on authoring? After all, many prefer to save on quality and quantity of content, especially at first.
DIKHTYAR: I want to remind you once again that in the world market we were pioneers who represented the collective editions of classic films on the national library scale. Based on data on the estimated demand, we had to create a real demand. Therefore, the principle of collectivity has become that special "highlight" of each DVD-project and originally formed the basis of the concept of RUSCICO. We had to try to anticipate the level of exactingness of American and European consumers to our DVD-product. First we released about half of the declared catalog in the universal multilingual format, working out the return on investment. Then came the turn of repeated and localized editions on blocks of 5-10 films. Here we had to work with the largest regional publishers, each of which had its own hobby, its own specificity, its profile - up to the color scheme of the cover. These are the editions of the films DERZU UZALA, MOSCOW Tears do not believe, the sets of Sergei Paradzhanov, Nikita Mikhalkov, Andrei Tarkovsky, Bondarchuk, Kulidzhanov, collections about the war in France, Britain, Japan, South Korea, Spain. For localized publications in the Czech Republic, Poland and Hungary, we made synchronization of duplicated phonograms and fully authored the projects. RUSCICO's riches were published in iron, cardboard and glass packages, sometimes together with books, photo albums and commentaries of famous film critics. For the entire period of our existence, we published about 1000 publications.
BK-ACTION! RUSCICO works not only abroad, but also in Russia. Which direction was the main one for you 10 years ago and what can you call the main now?
DIKHTYAR: 10 years ago, for us, of course, the main was the foreign market. As the domestic DVD market developed, the commercial focus of our activities shifted towards Russia and the CIS countries. We owned the corresponding rights to the catalogs of the Film Studio. Gorky, Lenfilm, Georgia-Film. International versions were also offered on the domestic market, whose capacity in the early 2000s was very limited. The explosion of DVD popularity in Russia occurred only in 2004-2006 and, I will not deny, played into our hands. We re-invested some of the proceeds from DVD sales abroad in the acquisition of TV and video rights for classical, new art house and children's foreign films. Over time, we have achieved a fairly harmonious balance in terms of areas of activity and sales markets, which allowed us to minimize the company's commercial risks. Today, our television and DVD-catalog for foreign countries is about 350 working titles (plus 200 films in plans). In the TV and DVD catalog for Russia and the countries of the former USSR there are over 400 items (plus about 100 in production). Among them there are pictures of the Im. Gorky, "TriTe", "Tsentrnauchfilm", "Tallinfilm" studios, Georgia and Armenia studios, Japanese Studio Ghibli. The promotion of documentary films is actively developing. Today we produce our own documentary projects, the concerts of the Borodin and Glinka quartets, and we also present the documentary catalog of the Granat film studio. Since this summer, we are launching the production of Blu-ray, primarily paying attention to the hits of sales of previous years. A new DVD-collection "Kinoakademiya" was created, which for the first time makes it possible not only to watch the film, but also receive detailed comments of the best specialists in the field of history and theory of cinema. Comments are accompanied by multimedia illustrations using unique archival and documentary materials. They will allow the viewer to immerse themselves in the atmosphere of the creation of the film and in the era that gave birth to it. Recently we received a prize for this collection in Bologna in the nomination Best Special Features.
BK-ACTION! What has changed over the years in foreign markets and in Russia?
DIKHTYAR: In 2002 a film distribution department was established. We have a special respect for European cinema and in 2009-2010 we present 10 French films for a limited film distribution. In our rental catalog there is a rare art house movie, which is not always possible to watch the Russian audience, including children's films and cartoons from France, Ireland, Belgium, Spain and Japan. RUSCICO also cooperates with central and regional TV channels in Russia, CIS and Baltic countries, and abroad. Abroad, we continue to expand our DVD collection, replenishing the retiring positions with new ones. The collection is presented at all major international film, television and video markets. In the structure of our exports, the share of television sales is gradually increasing. At the same time, we closely follow the new trends in the development of the Internet market, HDTV, Blu-ray, mobile content, monitor the consistent and fairly successful struggle of European copyright holders with Internet piracy. We are trying to study and systematize this new experience. With regard to our portfolio of "long" rights, we develop an HD platform for all materials that are available within our access. In order that when the rules of the game finally form on the new segments of the market, we could enter into them not with empty hands.
Kirill TABACHENKO "VIDEO-BULLETIN BULLETIN"