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Business news, 03.02.2006 17:11

Run-Down Cinemas May Turn Private

cinema_industry The number of privately-owned cinemas in St. Petersburg might double over 2006 as the city’s government plans to pass more then twenty run-down venues into the hands of private investors.

Following a reform of the state cinema network, only eight cinemas may remain state-owned: two so-called “festival” ones — Avrora and Rodina — and six childrens’ cinemas, Igor Odushko, the press secretary of the city’s Culture Committee said Thursday.

By Yevgenia Ivanova

This project is expected to attract a great deal of interest from cinema operators as the business of film distribution is on the rise and far from saturation.

“Historically, St. Petersburg’s cinemas were built in very favorable places, points of synergy where people enjoyed spending their free time. Therefore without a doubt these addresses will be of huge interest to investors,” Alexander Pozdnyakov, the president of the St. Petersburg Film Press Association, said in an interview Thursday.

Eduard Pichugin, general director of Epos, a company that manages the city’s biggest chain Kronverk Cinema agrees.

“This is the right move from which everyone stands to gain,” he said in a statement communicated by the company Thursday.

Stating his company’s interest in these cinemas, Pichugin said that they had already tried to acquire some units to manage.

“We advanced such an initiative as early as 2001,” he said.

According to Pichugin, the location of Soviet-era theaters is an excellent selling point.

In addition, “after renovation, virtually deserted venues might become successful entertainment or trade centers with a cinema function.”

However, Oleg Berezin, the general director of Neva Film, was less optimistic. He said that the project’s interest to potential investors is dependent on many factors. Some cinemas are not very well located and their infrastructure is in a state of decay, Berezin said.

“There is also the question of what conditions the city authorities will impose when handing over the property to private companies,” Berezin said.

Although a company would need to invest at least $100,000 to equip each individual cinema, that sum is minimal compared to the cost of renovation, which can amount to $5 million in the case of some cinemas, the expert said.

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(c) 2000