As Russia’s access to Hollywood blockbusters remains restricted, a troubling trend has emerged in its cinema industry. Many cinemas have resorted to selling tickets for short local films as a front for screening pirated Hollywood movies. Despite periodic threats of government crackdowns, the practice persists, with enforcement remaining inconsistent. Meanwhile, legal streaming platforms in Russia are thriving, reporting significant revenue growth in 2024.

The Fallout of Hollywood’s Exit

The withdrawal of major studios like Disney, Warner Bros., Sony Pictures, and Universal from Russia after the onset of the war in Ukraine left a massive gap in the Russian cinema market. Initially, some viewed this as an opportunity for local filmmakers to thrive. Optimists predicted a boom in domestic cinema, with suggestions that collaboration with filmmakers in “friendly” countries could help fill the void.

However, the absence of Hollywood movies quickly took its toll. By the end of 2022, the revenue of Russia’s largest cinema chains had dropped nearly 50%, with losses running into billions of rubles. Facing a lack of major releases, cinemas turned to alternative solutions, including unofficial access to Hollywood content.

Piracy in Plain Sight

What started as small-scale private screenings of pirated movies in mid-2022 rapidly expanded. By late 2022, hundreds of cinemas were using creative methods to bypass licensing restrictions. One popular tactic involved bundling Hollywood movies with tickets for short local films, allowing customers to enjoy blockbusters like Avatar: The Way of Water or Top Gun: Maverick under the radar.

By 2023, these unofficial screenings accounted for as much as 20% to 30% of Russia’s box office revenues, according to analysts. Hollywood movies, distributed through shadow networks, even made their way into box office rankings alongside legal Russian releases.

Government Response: Mixed Signals

Despite the overt nature of this piracy, the Russian government has sent conflicting messages. Former President Dmitry Medvedev openly called for the disregard of U.S.-owned intellectual property in response to Western sanctions, signalling implicit support for piracy. Yet, the legal framework remains unchanged—screening or distributing unlicensed films without state certification is still illegal.

In October 2024, Prime Minister Mikhail Mishustin addressed the issue of uncertified Hollywood screenings during a strategic meeting on domestic cinema development. Officials pledged increased inspections of cinemas engaged in “pre-screening” practices. However, the timing and extent of these promised checks remain unclear, leaving the industry in a state of ambiguity.

Cinemas Face Financial Struggles

The state of Russia’s cinema industry paints a grim picture. In the first half of 2024, ticket sales totalled 73.1 million, a stark drop from the 113.1 million tickets sold during the same period in 2019. Industry leaders have described the situation as dire.

Pavel Ponikarovsky, a board member of the Association of Cinema Owners, labelled the first six months of 2024 as “depressing,” while Olga Zinyakova, head of the Karo cinema chain, bemoaned the lack of quality content. Zinyakova acknowledged that piracy is siphoning viewers away from legal offerings, compounding the challenges faced by cinemas.

Streaming Platforms Thrive Amid Challenges

While cinemas struggle, Russia’s legal streaming platforms have emerged as unexpected winners in 2024. According to TelecomDaily, revenues from platforms such as Kinopoisk, Ivi, Wink, and Okko grew by over 42% in the first half of the year compared to 2023. Together, these services dominate 97% of the market in monetary terms.

The success of these platforms is partly attributed to their ability to cater to audiences seeking convenient and legal access to entertainment. The surge in revenues reflects a growing appetite for digital content, as cinemas grapple with dwindling ticket sales and the pervasive issue of piracy.

The Road Ahead: Piracy vs. Recovery

The return of Hollywood movies to the Russian market remains uncertain, with some predicting a wait of five to 15 years. Until then, both the cinema and streaming industries face significant challenges. For cinemas, piracy remains a double-edged sword—it draws viewers but undermines the legal market. For streaming platforms, the absence of Hollywood content may create space for growth, but the landscape could shift dramatically if Western studios return.

Russia’s cinema sector stands at a crossroads. Without a cohesive strategy to address piracy and support domestic production, the industry risks further fragmentation. As legal streaming platforms continue their upward trajectory, the question remains: can cinemas adapt to survive in a market where piracy and legal digital platforms are reshaping the entertainment ecosystem?