1. TEENS IN RUSSIA AND EMERGING EASTERN-EUROPEAN MARKETS “Just who Do They Think They Are?” Eastern European Teens, Their Lives and the Movies

2. ‘A contradiction exists between the traditional perception of Russian movies as an esoteric kind of art-house cinema, and the expectations of a massive young audience brought up on Hollywood blockbusters. Alexander Rodnyansky, Producer ‘What could be called a change is the attractiveness of Czech films for Czech audiences. You look at the top tens for the last years going back: almost every two years there were Czech films that broke one million admissions. Not many foreign films could boast the same.’ Jan Bradac, Head of Cinestar and Falcon

3. Background… Since the collapse of the communist regime in the early 90’s, most of the Eastern European countries have undergone dramatic political and economical upheaval, resulting in significant changes in people’s lifestyle, their values and needs. The collapse of the regime also affected the film industry, recording sharp decline in local productions, closure of cinemas and shrinking admissions After a time of political and economic insecurity, the majority of these countries have been recording significant economic growth: GDP and growth of income per capita are on the rise, consumer crediting is also growing, leading to an increase of the available assets of the population being spent, among other things, on Entertainment As a reflection of this economic growth, the movie industry in Eastern Europe has been recording an above average growth in cinema admissions compared to Western Europe and in the USA: Selected Eastern European Countries % Increase in cinema admissions 2006 vs. 2005 Slovak Republic+ 54.3% Estonia+ 40.2% Czech Republic+21.4% Poland+12 % Selected Western European Countries % Increase in cinema admissions 2006 vs. 2005 Germany+ 7.4% France+ 7.6% Italy+ 1.6% Spain- 4.7% Source: focus, Marche du Film

4. The recent growth in the movie industry in Eastern Europe can be attributed to a range positive internal and external factors: 1.The development of modern multi-screen cinemas, offering Eastern-European movie-goers a new and exciting cinema experience with a variety of attractive and innovative offers, including non-film based events in line with the growing aspirations of their audience 2.Increased amount of leisure time, especially among young people under 21 years of age. Recent research publications on Leisure in Eastern Europe, and more specifically in Czech Republic, report a notable increase in the amount of available leisure time: Factors fuelling growth in the movie industry… In Poland, for example, leading cinemas provide a complex entertainment offer, including film marathons; concerts; sport transmissions and cabarets, as well as film events, specifically targeted at certain demographic groups: teens, women, parents etc. In Russia, besides the successful development of multiplexes, there is a current trend for opening VIP-cinemas, hugely popular in big cities such as Moscow and St. Petersburg ‘Whereas in 2002 respondents in the age group 15-44 years said that on average they had 28 hours of leisure time per week, in 2006 his figure has risen to 31 hours. The greatest amount of leisure time is typical for young people under 21.’ Source: CEE Newsletter, 1/2007 edition issued by GfK

5. 3.Increased studio production of strong film franchises and growing film diversity with highly visible quality marketing campaigns for both American and local product Factors fuelling growth in the movie industry… 4.Positive change in appeal of domestic films and growth of local production With the slow but steady uplift of local productions, many of these domestic films resonate with local audiences

6. RESEARCH PROPOSAL… Teens are an important demographic in Eastern Europe when it comes to movies and, collectively, they have enormous spending power More over, within the Eastern-European movie-goer community, teens and people in their early 20’s are the keenest movie-goers, in some countries representing up to 40% of the total audience Therefore, getting under their skin and knowing what makes them tick is of paramount importance Following the success of the First Movies EUROPEAN and ASIAN TEEN Projects, whereby a comprehensive study was conducted across key markets, we are now proposing to conduct a similar study with teens in selected markets in Eastern Europe We are proposing covering three crucial markets in the region, each displaying an exceptional growth potential: Russia (including Ukraine), Poland and the Czech Republic Results from the previous studies in Western Europe and Asia clearly showed that teens are not a homogeneous group and cannot be treated as such. Since Eastern Europe is a collection of nations, it therefore houses teens from different cultural backgrounds Because of this lack of homogeneity, defining and targeting teens is complex, and painting teens with a broad brush or resorting to stereotypical images can backfire. As teenagers become increasingly difficult to target, it is even more crucial to fully understand just how they define themselves

7. Areas to explore… As with the European and Asian editions, we propose covering a range of topics from general attitudes to the lifestyle and attitudes of regular and frequent cinema-goers We also propose exploring such issues as attitudes to Piracy, the percentage of pocket-money spent for cinema activities, proficiency in foreign languages, attitudes to dubbing and more And more specifically…  General lifestyle and market consumption (preferred leisure activities and where film fits into their lives, use of technology, attitudes to key film issues, amount of pocket money available)  To gain insight into the mindset of teenagers in Russia and Ukraine, Poland and Czech republic, covering topics such as their relationship with their parents, their perceptions of how they see the future and how they cope with pressure growing up  Investigate attitudes towards American movies compared to local product; attitudes to marketing and promotions; merchandising; preferred genres  Attitudes to Piracy and awareness of any Anti-Piracy campaigns  Proficiency in foreign languages and attitudes to dubbing  Profiling the ‘frequent movie-goer’

8. Study design… To maintain as much consistency as possible with the previous studies, an on-line methodology is proposed: METHODOLOGY We recommend that we employ what is termed ‘fake online’, whereby respondents will be taken to an internet café to undertake the survey, following in-street recruitment SAMPLE A total of 600 interviews in each market (Russia and Ukraine / Poland / The Czech Republic) will be completed by teenagers between 11-18 years old Respondent composition (per country): 150 interviews with 11-14 year old males 150 interviews with 11-14 year old females 150 interviews with 15-18 year old males 150 interviews with 15-18 year old females Respondent eligibility: In order to be eligible for interview, each 11-18 year old must go to the cinema at least once every three months

9. Additional options… OPTIONAL COUNTRIES MarketsBox office 2006 in Mio US$ Slovenia12,160 Slovakia8,845 Estonia7,085 Latvia6,858 Lithuania5,503

10. Cost… COST based on the following markets: Russia (including Ukraine), Poland and The Czech Republic One client£63,000$131,040EUR 90,720 Two clients£38,000$79,040EUR 54,720 Three clients£27,000$56,160EUR 38,880 Four or more clients£22,000$45,760EUR 31,680 COST FOR ANY ADDITIONAL COUNTRIES* Additional country£19,000$39,520EUR 27,360 At the exchange rate of £1 =$2.08 / EUR 1.44

11. Timings … Final programming of the questionnaire One to two weeks FieldworkTwo to three weeks Report availableFive to seven weeks after commissioning Presentation of findingsTBC

12. Contacts Elena Oster VP, Research Tel: +44 (0) 207 292 7303 E-mail: elena.oster@firstmovies.com For more information, please contact Louise Chater or Elena Oster: Louise Chater CEO Tel: +44 (0)207 292 8360 E-mail: louise.chater@firstmovies.com