Global Economics

Mouse Ears Over Moscow


Disney, already a force in Russia, is set to make local movies and launch a TV channel

Yegor Fetisov has been looking forward to this evening for weeks. "The duels, the battles, the cannons!" the 10-year-old says as he queues up for a Moscow screening of Pirates of the Caribbean: At World's End, the third installment in Disney's smash-hit swords-and-surf series. "It's great to see how pirates fight!" he gushes. Yegor's father, Andrei, isn't quite as effusive, but he's not surprised that the May 24 opening has attracted a crowd. "It's an adventure," he says. "No one here has made films like that for ages."

Now, Walt Disney Co. (DIS) is getting ready to do just that. The creator of Mickey Mouse and Cinderella is planning to sprinkle its moviemaking fairy dust in the land of Dostoyevsky and Tolstoy. By yearend, Disney expects to start shooting its first film in Russia with Russian-speaking actors, likely based on traditional children's stories. "We want Russian families to go to the cinema to watch a Disney movie, but this movie need not be produced in Hollywood," says Marina Jigalova-Ozkan, managing director of Disney's Russian operation.

The film—the first of many, the company says, though it's not revealing details—is part of Disney's new push in Russia. The entertainment giant opened its Moscow office just over a year ago and now employs more than 50 people. A new Russian-language Disney TV channel is due to be launched this autumn. In January the company teamed up with Sony Pictures Entertainment (SNE) to create a joint venture for distributing Disney films in Russia. And Disney on Ice, a skating show featuring the likes of Snow White and Sleeping Beauty, came to Russia for the first time in May, selling out shows in Moscow and St. Petersburg. "Russia is a priority country," says Andy Bird, president of Walt Disney International. "We see the potential for growth for several years down the line."

It's a natural move for Disney. Despite decades of anti-American propaganda, the studio's classic cartoons managed to sneak through the Iron Curtain. As early as the 1930s, selected audiences were allowed to see Disney films, and by the 1980s pirated videos circulated widely. When the movies finally hit Russian TV screens in the late '80s, they were an instant hit. "We all grew up with these cartoons and watched them in Soviet times, so we have the very best impressions," says Yuri Volkov, a thirtysomething Muscovite waiting with his family to see At World's End.

RAKING IT IN

Today, Disney is making real money in Russia. Overall box office sales in former Soviet lands are expected to hit $590 million this year, up from just $18 million in 1999. Disney has benefited more than most from that jump. Its box-office receipts last year climbed to $50 million as Pirates of the Caribbean: Dead Man's Chest became Russia's best-selling foreign film ever, with sales of $31 million. The latest installment promises to do even better: Helped by a barrage of prerelease publicity, including billboards four stories high, the swashbuckler attracted 2.3 million viewers and $14 million in sales on its opening weekend, a Russian record.

Mickey & Co. may run into familiar faces in Russia, though. Nearly all the big Hollywood studios have set up Russian film distribution operations, and Disney isn't alone in tapping the market for Russian-made films. In April, Twentieth Century Fox Film Corp. (NWS) released Waiting for a Miracle, a teen comedy produced by a local joint venture half- owned by Sony. Russia's homegrown film industry has also rebounded. It now accounts for 25% of all box-office sales as producers such as Moscow's Channel One churn out effects-laden thrillers that earn tens of millions of dollars and outscore imports.

Still, Disney doesn't seem worried about competition. Most new Russian films, Jigalova-Ozkan notes, are action movies, war films, or dramas. That leaves an opening for lighter fare. "The niche for quality family entertainment," she says, "is fairly empty in Russia."

Bush is BusinessWeek's Moscow bureau chief.

We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus