Six months into the Ukraine war, Russia's film industry is on life support

• Six months into Russia's war in Ukraine, Russia's thriving film and TV industry is in crisis.
• Hollywood studios and Netflix have left. There's pressure to back 'patriotic' projects.

Woland — a film adaptation of Mikhail Bulgakov's classic novel The Master and Margarita — was set to be one of Russia's biggest blockbusters in years.

The German actor August Diehl, who starred in Quentin Tarantino's Inglourious Basterds, had been cast in the title role of Woland, the mysterious foreigner. Sir Len Blavatnik, a British-American magnate and an enthusiastic patron of Russian independent filmmaking, had signed on as co-producer.

Directing the film was Michael Lockshin, a US-born Russian filmmaker with several hits already behind him: A Russian beer ad he made, starring David Duchovny, went viral, and his debut feature, Silver Skates, was the first Russian film to be released on Netflix.

Woland's Russian distributor, Universal Pictures, released the first teaser trailer early this year on YouTube.

With the $15 million film slated for release on January 1, 2023, Netflix and other foreign buyers seemed to be waiting in the wings. There was "heavy interest for Woland internationally even before it was finished," Lockshin said in an interview from California.

But then came Russia's invasion of Ukraine on Feb. 24, 2022 — and, with it, an exodus of foreign capital and goodwill. Universal, along with Disney, Paramount, Sony Pictures, and Warner Bros, all pulled out of Russia.

In March, Netflix pulled its Russian projects, putting on indefinite hold on its grand adaptation of Leo Tolstoy's Anna Karenina and Nothing Special, a Russian drama about a young thespian who bonds with a group of actors with disabilities.

Apple TV has done the same, axing a co-production deal with a local streaming service that's part-owned by Alisher Usmanov, a billionaire oligarch who was sanctioned by the US in March for his close ties to the Kremlin. Its debut Russian language series, Container, and another, provisionally known as the The Untitled Russian Billionaires Project, have both been shelved.

Before the war, Russian film and TV was having something of a renaissance. Directors like Andrey Zvyagintsev and Yuri Bykov had returned Russian cinema to the global stage, and Russian actors were getting picked up for projects in the West. The loss of US streaming giants, and the co-production and distribution deals with it, has been ruinous for Russian movie studios. Russian state funders like Fond Kino and the Ministry of Culture, which had found its way into about 80% of all Russian art house movies, are suddenly the only game in town.

"There were a lot of co-productions and Russia was probably one step from having its own local international hit like Squid Game," Lockshin said. "But unfortunately all that has been paused for now."

Blacklists and re-education

In the six months since the war began, the United Nations has recorded at least 5,237 civilian deaths, while Ukrainian authorities are investigating 16,000 cases of possible war crimes.

News outlets that produced critical reporting have been shuttered, while Russia's Channel One presents sanitized, alternative-reality coverage of the war. Marina Ovsyannikova, the Russian journalist who famously interrupted a Channel One broadcast in March, is now under house arrest, and faces 10 years in prison, for another protest last month. Standing opposite the Kremlin, Ovsyannikova held up a sign that read: "Putin is a murderer, his soldiers are fascists."

By one estimate, more than 300,000 Russians have left.

Amid all of this, Russia's $1 billion film and TV industry has gone from flourishing to blandly patriotic.

In an ominous development reminiscent of the Red Scare that rocked Hollywood in the 1950s, a State Duma group compiled a list of 142 celebrities, including prominent directors and writers, who have not publicly stated their support for Russian President Vladimir Putin's "special military operation."

Duma deputy Dmitry Kuznetsov said these industry figures should be sent on a trip to war-torn Donbass in Eastern Ukraine "to be re-educated" — and then either publicly admit they were wrong, or leave Russia.

No one has yet taken Kuznetsov up on the offer.

The list, published on the popular Russian website news.ru, spooked the industry. Woland's scriptwriter, Roman Kantor, was on it. Lockshin wasn't, perhaps because he's a US, not Russian, citizen.

Lockshin, 41, who has been editing the film from Los Angeles, says he's still hopeful that Woland remains on track. For now, Woland's official Russian premiere has been pushed back to next May.

The film is 80% complete, but it remains to be seen if Woland's producers can secure the funding required for post-production. Western funders seem to be avoiding Russian projects altogether, while Woland's themes of anti-authoritarianism and censorship seem to be putting off domestic backers.

A Kremlin film fund, which put money into the film early on, has so far refused the film's request.

Woland's curse

Bulgakov's The Master and Margarita, which has been adapted loosely for Woland, is a searing critique of Stalin's dictatorial regime. It intertwines a love story between a great author, the Master, and his mistress, Margarita, with the story of Woland, the devil, who arrives in Soviet Moscow with an entourage that includes an assassin and a talking cat with a vodka problem.

During his lifetime, Bulgakov kept the manuscript hidden away in a drawer, and after the book was discovered it was promptly banned. A censored version was published 27 years later in 1967.

Even before the Ukraine war, Lockshin was tracking the red flags. Several famous Russian actors turned down parts due to its supernatural and superstitious elements. On set, the running joke any time something went wrong — like lunch arriving cold — was that "Woland's curse" must be responsible.

"The book has a mystical and mythological aura in Russia, and many considered it a cursed book because of its devilish themes," said Lockshin. "But the curse came after, with the war."

Blavatnik coming on board as a producer lent the project credibility. He had a knack for staying out of politics, and had a track record of producing hit films both domestically and abroad.

Blavatnik, 64, made his fortune in the aluminum and energy sectors in Russia's anarchic 1990's era of privatization. Born in the Soviet Union in what is now Ukraine, he grew up in what's now Russia. As he's built a life, and more businesses — he acquired Warner Music Group, the world's third-largest music company, in 2011 — he claims to have no relationship with the Kremlin and insists he's not an oligarch. When the US and European Union began doling out sanctions in March, Blavatnik was spared.

In June, Bloomberg News dubbed him the 'Most Clever Oligarch' for steering clear of Russian politics and diversifying his $37 billion — "the world's 33rd-largest fortune" — outside Russia. (Blavatnik declined Insider's request for an interview.)

Like many Russian titans of business, Blavatnik has found a sheen of respectability as a generous patron of the arts and philanthropic causes. He was knighted in the UK in 2017, which added the honorific "Sir" to his name, for his charitable contributions.

Blavatnik began to take an interest in the Russia TV and film industry In the early 2000s.

Russian cinema has long been subject to the whims of the state. The early Soviet era of Sergei Eisenstein and Dziga Vertov in the 1920's is revered as a "golden age" until Stalin began to rein things in.

Khruschev's cultural "thaw" in the 1950's and early 1960's led to the emergence of a new breed of virtuoso filmmakers, including Andrei Tarkovsky, Andrei Konchalovsky and Nikita Mikhalkov, before the industry stagnated again under Brezhnev. In the post-Soviet 90s and 00s, local studios crumpled as they failed to compete with pirated video imports from Hollywood. From there, and especially in the last decade, the industry has again climbed back.

In 2002, Blavatnik launched Amedia Productions with Russian producer Alexandеr Akopov — spending, according to the Hollywood Reporter, $45 million to build his stake.

Film insiders say Blavatnik regularly appears on sets in Russia and takes an interest in reading scripts. Recent projects have included the sumptuous period drama Poor Nastya, which was distributed in 25 countries, and a local adaptation of the US network hit Ugly Betty.

Last year, Amedia entered into a five-year deal with Mars Media to co-produce and co-finance features films. The partnership has already produced the Russian box office hit A Dog Named Palma and the war drama T-34, which was acquired by Netflix for international distribution. Adaptations of Alexander Pushkin's epic fairy-tale Ruslan and Ludmila and Boris and Arkady Strugatsky's famed sci-fi mystery novel The Dead Mountaineer's Hotel were in development.

A Russian film insider said Blavatnik has been known to party on his yacht at the Cannes Film Festival with his close friend Lawrence Bender, who has produced most of Tarantino's movies. When fellow billionaire Oleg Deripaska rang to say he loved his latest feature film, Blavatnik got a kick out of that, the insider said

Blavatnik was also known to occasionally take risks.

The 2017 Russian-language film Moscow Never Sleeps included a corruption storyline which, according to its Irish director Johnny O'Reilly, "prompted some strange attacks on the film by Russian authorities, including withdrawal of Ministry of Culture funding support and an effort to slap an 18+ rating on the film."

Major Russian distributors were scared off, but Blavatnik agreed to help.

"Blavatnik took a small but essential investment position in the film," said O'Reilly, 51, who lives in Kyiv.

For Blavatnik, his investment in Woland was a drop in the bucket. But his involvement was a significant boost to the film.

Last July, as Woland began shooting near the Novodevichy Cemetery in Moscow, Blavatnik was there alongside the film's cast and crew. To mark the occasion — and in accordance with the traditions of Russian movie sets — a plate of the first reel was ceremoniously smashed for good luck.

By all available metrics, a hit film was in the works.

'Tip-toeing around'

The oligarchs who have helped bankroll this flourishing era of Russian filmmaking are now caught between a rock and a hard place. Backing art-house cinema has become far less fun.

The experience of Oleg Tinkov, a billionaire entrepreneur who was sanctioned by the UK in March, is a salient lesson to oligarchs thinking of putting their heads above the parapet.

In an explosive Instagram message posted in April, Tinkov claimed that 90% of Russians were "against this war" in Ukraine and called Russia's forces a "shit army."

The next day, he told the New York Times, the Kremlin notified executives at the digital bank he founded in 2006 that either Tinkov was out, or the bank would be nationalized. Tinkov said he was forced to sell his 35% stake to Vladimir Potanin, a loyal Putin oligarch, for 3% of its real value. (The bank and others have denied this account.)

While Blavatnik has avoided the onerous US and European Union sanctions, many other former Moscow-based tycoons, like Roman Abramovich and aluminum billionaire Deripaska, have been hit hard. (Abramovich announced he was selling Chelsea FC eight days before the UK announced sanctions over his ties to Putin.)

"Sir Leonard and the Blavatnik Family Foundation believe that what is happening in Ukraine is heartbreaking and he condemns the ongoing violence," a spokesman for Blavatnik told the Guardian in May following a probe into his links with sanctioned oligarchs.

One of Putin's most unyielding critics, Bill Browder argues that high-profile tycoons should offer full-throated condemnations of the war to justify escaping sanctions.

As a fund manager turned human rights and anti-corruption activist, Browder's brainchild, the Magnitsky Act, created the legal framework for the sanctions regime. Since the start of the Ukraine war, his team has analyzed oligarchs' statements, and concluded that none of the top 20 oligarchs have directly criticized Putin or the Kremlin.

"The key litmus test is to look at their statements about Putin's murderous invasion of Ukraine and see if they mention the words war, invasion, and Putin," said Browder, 58. "If they don't, you have to ask why they are tip-toeing around these issues. If you have nothing to worry about Russia, why is Blavatnik being so deferential to Putin?"

But defenders of the oligarchs have also emerged, notably from figures in the film and TV industry who say the support of these figures is vital.

Director Kirill Serebrennikov, who was a vocal critic of Russia's annexation of Crimea from Ukraine in 2014 and has spoken out in support of Russia's beleaguered LGBTQ+ community, recently came to the defense of Abramovich.

"He has been a real patron of the arts and in Russia this has always been appreciated," Serebrennikov said at the May premier of his controversial new film Tchaikovsky's Wife, which examines repressive 19th-century attitudes to homosexuality.

In 2019, Abramovich launched Kinoprime, a $100 million private film fund, to support Russian films. At the fund's inception, its chief executive Anton Malyshev told Screen Daily that Abramovich takes a direct interest in new projects and reads synopses, if not actual scripts. Kinoprime's first investment was in Fairy, a feature from Russian director Anna Melikyan, a Berlinale prize winner.

They're "certainly not propaganda films," Serebrennikov said.

Serebrennikov also revealed that Abramovich had footed the medical bills for Andrey Zvyagintsev, the two-time Oscar-nominated director who spent weeks in a medically-induced coma last year in Germany after contracting the coronavirus. Zvyagintsev, whose films Leviathan and Loveless were fiercely critical of the Russian state, has been at work on his first English-language project, What Happens, which is co-produced by Steven Soderbergh.

'Traitors under the bed'

The clampdown on Russian filmmakers and artists critical of the state has only been ramping up. The treatment of feted Russian director Alexander Sokurov, whose film Faust won the Golden Lion best picture award at the Venice Film Festival in 2011, has alarmed many in the film and TV sector.

Sokurov first made waves with his repeated calls for the release of Oleg Sentsov, a Ukrainian filmmaker serving a 20-year sentence in Russia on terrorism charges. Senstov was freed in late 2019 after five years in prison and is now serving on the front line for the Ukrainian army.

Then, during a meeting in December with Putin and Chechen leader Ramzan Kadyrov, Sokurov suggested that the Kremlin jettison certain regions in Russia's restive North Caucasus or risk a constitutional crisis. The comments incensed Putin, who early in presidency had launched a brutal campaign to quell an insurgency in Chechnya. Sokurov began to receive threats and later publicly apologized.

In late June, Sokurov was heading to Finland by car when, he said, he was stopped by Russian border guards. They claimed at first to be enforcing pandemic-related restrictions, but later said he'd been stopped by "an order of the prime minister" Mikhail Mishustin.

"For several hours we couldn't understand what was going on, where our documents were, and why we could not get permission to cross the border," he said. "During that time hundreds of cars were moving by us, entire buses filled with Russian children and other citizens were allowed to pass, while we sat there like we had been arrested, waiting for what – to be arrested for real?"

He was later able to leave, and attended a film festival in Switzerland in August.

Even directors who were thought to be in good standing with the Kremlin have been targeted.

Take Fedor Bondarchuk, whose Art Pictures Studio is backed by gas export monopoly Gazprom. Bondarchuk, 55, comes from feted Russian film-making stock. His father Sergei won a Golden Globe and an Academy Award for his epic seven-hour adaptation of War and Peace.

Following in his father's footsteps, Fedor's blockbuster film Stalingrad and 9th Company, his 2005 film about Russia' war in Afghanistan, have been two of the most successful films at the Russian box office. He's even played nice in Putin's Russia, publicly backing the annexation of Crimea in 2014.

Despite his pedigree and CV full of patriotic films, Bondarchuk was included on the Duma's blacklist

"Fedor couldn't believe he has been implicated as disloyal," said a senior Moscow producer, who declined to be named out of fear for his security. "It's beginning to look like a witch-hunt but they are looking in the wrong place for traitors under the bed."

Pirated films and re-runs

With Hollywood studios and international streamers bypassing Russia, Russian consumers have had to search for entertainment. Some have turned to the online marketplace Avito to buy "family" subscriptions from foreign countries such as Kazakhstan, Georgian and Armenia. The service, which costs around 400 rubles ($6.43) a month, offers local content but no international, or even Russian, productions.

Without Hollywood films, Russian theaters are mostly showing older Russian movies from their back catalog or Bollywood films. Pirated versions of Hollywood releases, such as Batman, are reportedly being offered at smaller chains. On August 10, it was announced that Shirli-Myrli, a beloved 1995 farce about the Siberian mafia, would be re-released in 4K resolution by the end of the month.

Movie theaters, already suffering from revenue losses tied to Covid, are feeling the pinch. Industry bible Screen Daily reported that Russian theaters are running out of equipment with a particular shortage of lamps for projectors making it difficult to keep the lights on.

Since the war began, box office sales at the major cinema chains have plunged by as much as 50%, according to a report by TASS. About 40% of cinemas have closed, and as much as 70% could be shuttered by this fall.

Alexey Zlobin, a senior Moscow-based producer, argues it is impossible for the domestic film industry to survive without Hollywood films to show in multi-screen cinemas. "The industry just does not have the resources to make 200 films a year," he said.

No Tom Cruise or Coca-Cola

From his editing suite in Los Angeles, Lockshin is still hopeful he can find distributors and release Woland next year. Failing to attract funding from Russian sources may actually be helpful, since any link to the Kremlin might scare off international distributors.

Despite "an understandable backlash" against all Russian culture right now, Lockshin passionately believes Russian film has an important role to play. "I couldn't think about the movie for a few months after the war started, but I do believe art and film have a mission," he said.

He points to the outsized role that German filmmakers and actors played in Hollywood after fleeing Hitler's Germany for California. "If you look back at German filmmakers who escaped the war, they had a big influence on changing the culture," he said. And you could also argue that Hollywood movies had an impact of changing the minds of Soviet people."

Back in Russia, a young couple by the name of Dina Akimova and Stanislav Khabarov have just arrived for date night at the iconic Oktyabr cinema on Noviy Arbat in central Moscow. Established in Soviet times, the Oktyabr is still the largest movie theater in the country and the flagship theater of Karo, the third biggest chain in Russia.

The couple would prefer to watch Tom Cruise reprise one of his most famous roles in Top Gun: Maverick, but have settled for the Russian disaster-survival romp, The One.

Based on real events from 1981, the film tells the story of the sole survivor of a mid-air collision between an Aeroflot passenger jet and a strategic bomber.

"We can probably watch Top Gun later using a VPN but hopefully this isn't too bad," said Dina, a 24-year-old internet marketer. "There's no Coca-Cola on sale here but, at least, the popcorn still tastes the same.