Russian Towns Going Multiplex

Russian property developer DVI Group is planning to create a $40 million network of multiplex cinemas in regional towns and cities across the country over the next three years, the company said Thursday.

DVI Group — which builds and operates shopping malls in Russia — said it will open the first of 100 sites under the brand name DVI Cinema in the central Russian town of Izhevsk in November as part of a retail and entertainment development there.

DVI Group said two similar developments are scheduled to open in early 2007 in Volgograd and Ekaterinburg, overseen by the network's general director, Vladimir Fedorv. Fedorv was formerly head of cinema chain Kinomax, one of Russia's top 10 exhibition groups.

The company plans to take advantage of the relative lack of multiplex development in towns and cities outside of the Moscow and St. Petersburg regions, where heavy investment in multiplexes in recent years has led to near market saturation.

"Retailers and cinemas both gain from the symbiosis of trading areas. In DVI Group's Capital shopping and entertainment complex, the opening of a cinema increased traffic by 20%," DVI Group representative Oksana Misova said.

The number of modern cinema screens in Russia last year stood at more than 1,000 — almost one-third more than existed in 2004, according to figures collected by cinema equipment and research firm Nevafilm.

Oleg Berezin, Nevafilm's general director, said that building and operating multiplexes as an integral part of modern shopping malls makes a lot of sense.

"In this situation when owners of shopping and entertainment malls understand a cinema can be a complementary feature of their development, there is a chance for real success," Berezin said, adding that regional mall operators have traditionally regarded cinemas as competitors.