This year was dominated by the boom in Russian film-making.Some 120 features have been shot in 2004 and every week Moscow sees thepremiere of at least one or two new local titles.

The big winner on both the production and distributionfronts was Timur Bekmambetov's Night Watch, which broke all box-office records in post-Soviet Russia with a $16mgross. The second instalment in the trilogy is due out in early 2005. FoxSearchlight has snapped up the rights to the trilogy which may be shot inEnglish.

Overheard this year

'This is not a one-film show. This is just thebeginning. Two years ago we realised the market was ready for the first Russianblockbuster. We decided to produce five films a year for theatrical release. NightWatch was the first.' KonstantinErnst, producer.

'It's time for us to forge closer co-operationwith foreign producers. We are ready. We have been investing $10m a year forthe past five years and now have the highest level of technical capabilities ofany film studio in Europe. But more important, we have the professionalspecialists needed to shoot a film. It's people, not just computers, thatmake a film studio.' Karen Shakhnazarov, film-maker and general directorat Mosfilm Studios.

'This is the first year that we have distributedRussian product. We were always looking but there was no Russian commercialproduct being produced. This is a new generation of Russian directors who havecome from advertising and they know how to connect with an audience.' Michael Schlicht, general director atGemini Film

Breakthrough talent

Festival audiences know Konstanin Khabensky from his role asthe unbelievably hip Moscow journalist in Filip Yankovsky's Moving, butit is his lead role in Night Watch which has made him a megastar in Russia.

The year ahead

'We are going to see more multiplexes, better-qualitycinemas and new audiences as the standard of living, along with people'sdisposable income, continues to rise. It's the right time for Russianfilm production and to market Russian talent abroad. The future isbright.' Michael Schlicht, Gemini Film.

'I see the Russian market developing along the linesof the Japanese market, rather than the European model. Like Japan, 30%-40% ofthe market will be locally-produced releases. The Russian economy is growingand it is going to continue to grow. Russian audiences want to see big budgetRussian films and this is the kind of film we are going to see produced. Forfive years Russian audiences wanted to see American TV programmes but afterseven years we began to produce our own. Now we are going to see the same withfilms.' Konstantin Ernst, producer.

Box office snapshot

Highest-grossing film: Night Watch (Gemini) $16m

Highest-grossing arthouse film: Girl With A Pearl Earring (CP Classic) $102, 696

Highest-grossing international film: Harry Potter And ThePrisoner Of Azkaban (Warner Bros) $12.1m