Russia's box office grew by a stellar 45% last year - and with the chief beneficiaries being the Hollywood majors, Russian distributors are increasingly relying on foreign-language films.

Animation and major releases aside, one of the things that characterises the Russian market is the popularity of French films. Thirty-eight French films were released in Russia last year scoring a healthy 2.5m admissions and a box office of nearly $5m.

Asterix Et Obelix: Mission Cleopatre led the field with 600,000 admissions. Central Partnership, is the leading distributor of French films in Russia but 13 other Russian distributors buy French films, making it one of the world's most important markets for French product outside of French-speaking countries.

And at this year's European Film Market, held during the Berlinale, Italian promotional body, Italia Cinema, said that 25 Italian titles had been sold to Russia during the event. In addition RAI Trade sold TV and video rights to the territory, on 20 titles from its library.

Russia's gross box office rose from $65m in 2001 to $100m in 2002 and is expected to increase by another $40m this year. Admissions increased from 20 million to 33 million during the same period with an average ticket price of around $3. Last year major Hollywood releases accounted for about 75% of the total box office.

That's good news for the four distributors that handle major releases - Gemini Film (Fox and MGM), Cascade (Buena Vista and Columbia), East West (UIP) and Karo Premier (Warner Bros) - but not so good for others like West, Central Partnership, Pyramid/Paradis, Intercinema Art that account for the rest of Russia's estimated 260 releases a year.

"The main reason for the growth over the past few years is that a lot of money has been invested in new cinemas or refurbishing old cinemas," said Michael Schlicht president of Gemini. "This is just the beginning. Moscow now has only 100 screens, just to reach the same number of screens per capita that they have in Germany we need another 500 screens. If we compare this to the USA we need 1,000 screens in Moscow." Schlicht said that Gemini was looking at going into exhibition and was looking for a major western partner.

Earlier this year Alexander Timofeyev, co-founder of Investkinoproyekt, said he and his partner Vladimir Murov were seeking investor capital of between $5m-$8m per cinema for a planned multiplex cinema circuit they claim will control 30% of a market that could be worth $1bn within eight years. Another Russian operator Rising Star Media is building an 11-screen multiplex in Moscow and plans to build six or seven more across the country.

And tomorrow (April 4) sees the opening of Moscow's first IMAX cinema, operated by The UK's BFC Media, via its wholly-owned Russian subsidiary BFC Cinemas.

But while the major's Moscow future looks sunny, independents are facing bleaker prospects. "Yes, there's been a big increase in the Russian box office over the past year," says Peter Kartsev, head of acquisitions for Central Partnership, one of the largest independent distributors in Russia. "But the second instalments of Harry Potter (over $6m) and Lord Of The Rings (over $8m) accounted for much of that increase."

Kartsev says production costs for locally-shot films have increased over the past year, while the amount that independent and non-English language films can earn at the Russian box office has not kept pace.

"Prices for big studio-level films may have doubled but prices for smaller films have tripled or quadrupled. A film that cost say $15,000 last year, now costs $50,000 or more. Such amounts cannot be recouped theatrically, and the money you can make from video or TV sales is still quite limited here." An average wide release in Russia makes about $300,000 to $1m according to Kartsev compared to say the $3.5m that XXX grossed.

One of the forces fuelling rises in costs is the entry of new players into the market like Cinema Park, a company formed by Russian financial and metals conglomerate Interros Group, Nikita Mikhalkov's production company Three T and Andrei Konchalovsky's DVD distributor Movie Stream. The company closed its first major acquisition deals at AFM this year with films that included Seven Arts Signature International's $60m animated feature Foodfight!.