STATE PLANS TRANSFER TO NEW SYSTEM OF RUSSIAN CINEMA FINANCING

MOSCOW, August 16 (RIA Novosti) - The government plans to revise from 2007 the procedure of financing film production at the expense of the state. Mikhail Shvydkoi, head of the Federal Culture and Cinematography Agency, said in an interview to the Itogi magazine that the existing system of state grants (i.e., gratuitous aid) on film production will be retained for the next 30 months. In 2007, the state will transfer to the credit scheme of moviemaking support.

The first Russian thriller Night Watch was recently shown in Russian movie theaters. It collected over $14 million for a month, outstripping all American blockbusters shown in Russian cinemas.

In Mr. Shvydkoi's words, the new system of cinema financing will not copy the Hollywood one, but will rather be similar to the European one. Direct financial aid will be preserved, but instead of gratuitous inflows it is suggested that state interest-free loans be granted.

The difference between future loans from present grants are that they will have to be returned, and the size of the loan will be determined by cash receipts of movies by the director who wants to get financing. Successful directors and producers will be able to count on an increase in financing of their projects in the future.

Mikhail Shvydkoi believes it wrong that the present status of the Federal Culture and Cinematography Agency does not allow it to fulfill the function of a producer center and get revenues from distribution of films financed with the help of the state.

According to Investkinoproekt assessments, the potential of the Russian market of films stands at $1 billion.