An Insight into Movie-Going in Russia A Benchmark Study from OTX July 2007

An Insight into Movie-Going in Russia A Benchmark Study from OTX Product specs, timings and fees, July 17, 2007

3 Russia: Rapid growth in screens and admissions Admissions in Russia 2000 = approx. 12 million 2006 = approx. 96 million 2010 = est. 170 million Number of modern screens It's only 5 or 6 years since Russia was a minor territory. Nowadays, it is regarded as a top 10 market and could become top 5 in the next 12 months. At current growth rates Russia is likely to pass Italy (107 million admissions in 2005) and close in on Spain (126m) and Germany (127m).

4 Russia: Understanding the market What’s the movie experience like for consumers in Russia? How and when do movie-goers decide which film to see? Are there certain types of movies they prefer to see in the cinema? What’s the impact of piracy on movies? How important is word-of-mouth and what is the best way to start it? Who are the most important groups of movie-goers? What are the most effective ways of reaching these groups? There is still a lot we don’t know about the Russian market:

5 Russia: A market benchmark & tracking study Overview The study is the first of its kind and will provide a unique insight into the Russian marketplace – covering the views of the people who provide the experience as well as those who pay for it. It involves both qualitative and quantitative elements to offer a strong insight into the marketplace. And since the market is fast evolving, we will be tracking movie-going, sources of awareness/influence and opinion of the cinema experience at quarterly intervals following the initial wave of research.

6 Qualitative element The qualitative element uses traditional in-depth interviews alongside ethnographic and blogging techniques to tease out the key issues and answers -Two ethnographic interviews involving a family and a group of friends going to the cinema in Moscow – filming and observing them over a period of several hours to see what they do pre, during and post cinema -‘Tailored’ Blogs written by six movie-goers (2 in Moscow, 2 in St Petersburg and 2 elsewhere in the country) over a three day period. Blogs are a new tool for the qual researcher but allow us to go into a lot more depth than is possible in a typical focus group. The bloggers will be given a series of topics to write about each day and we will follow-up with them on specific points. We will ask them to describe in more detail: - The different ways in which they get to hear about movies - What influences their decision on what movie to see - Their last visit to the cinema - Their attitudes towards piracy and what impact it has on their movie-going -Two in-depth interviews with independent, local professionals involved with the distribution/exhibition of movies to get their views on the marketplace and how it is evolving -In-depth interviews (by phone) with six movie-goers (2 in Moscow, 2 in St Petersburg and 2 elsewhere in the country) following up on particular issues which come out of the quant study

7 Quantitative element The quantitative element comprises an initial large-scale study, followed by three further waves of research to track key measures over the next 12 months -The main quantitative element will be an initial online survey among a representative sample of 500 movie-goers aged years -This will cover the core themes of (see following charts for more info on each of these): - Movie-going and film consumption in general : who are the most important and emerging groups? - The cinema experience : what do they think of it and what is the typical experience for a movie-goer in Russia? - Sources of awareness and influence : how do they hear about and choose movies to watch in the cinema? - Piracy : what are the perceptions towards it and what is its impact? -Following this initial wave of research, three further waves will be conducted at 3 monthly intervals with a representative sample of 300 movie-goers aged years per wave. At each wave we will track a smaller number of key measures covering: movie-going, sources of awareness and influence as well as rating of the cinema experience

8 Quantitative element: Survey detail Movie-going and film consumption in general Film consumption in the last 12 months: No. movies seen in the cinema and change vs previous year (are they going more often or less often or the same) No. films seen on TV No. films seen via downloading (and no. of these which they burn onto DVD) No. films seen on a DVD (bought themselves, borrowed, official vs pirated) From the above questions we will establish: Profile of movie-goers and which demographic group(s) account for the highest proportion of admissions as well as which group(s) show the most ‘velocity’ in terms of change in movie-going vs the previous year The total number of movies seen in the last 12 months and the share of cinema vs DVD, TV, piracy etc

9 The cinema experience Perceptions of the cinema Rating of experience: comfort, screen quality, sound quality, value for money, quality of movies, concession quality, concession price, atmosphere, for impressing friends What do they like about it? What, if anything, would they change about it? As an evening out what does cinema compare with? Like going to the theatre, circus etc? How does going to the cinema compare with watching a DVD? Are there certain types of films they like to see in the cinema or is it good for all genres? For a typical trip to the cinema: Type of cinema and seat (premium or standard?) which they tend to go to Amount spent on ticket Amount spent on concessions Who do they go with? (age, gender, relationship with) When do they choose the film – in cinema or beforehand? Who decides - sole or joint decision, if so with who? When do they purchase a ticket - in cinema or beforehand? What does the cinema experience involve (eg what do they do before and after)? Is the experience different with friends, with partner, with family? (if appropriate) Quantitative element: Survey detail (cont’d)

10 Sources of awareness and influence Sources of awareness (covering different media, reviews, friends as well as in-cinema) – we will ask respondents to undertake a ranking exercise of all the different sources to identify the most important sources Sources of influence (ranking exercise) Do the sources of influence vary with different types of movies? Do they have enough info on films to help them decide? Would they like more info and if so who should provide it? Quantitative element: Survey detail (cont’d)

11 Piracy We will ask them to define it from their point of view What are their attitudes towards it? Do they see it having any impact on going to the cinema? How does piracy fit in with cinema-going, is it cannibalistic or complimentary? (from the Movie-Going & Film Consumption section we will know if they engage in piracy) Quantitative element: Survey detail (cont’d)

12 Timeline 25 July 20 July1 Aug20 Aug24 Sep The three further quant waves will take place in November 2007, February 2008 and May 2008 with results available by the end of each month. Confirm you want to subscribe to study! Deadline for subscribers to provide input on qual and quant elements In-depth interviews with professionals, blogs and ethnography start Fieldwork for initial quant study starts. In- depth interviews with movie-goers to take place during this period Report, tables and transcripts available

13 Fees Companies subscribing before July 20, 2007 will pay the special discounted price of $15,000.