Page 94 - Inside the Film Factory New Approaches to Russian and Soviet Cinema

INSIDE THE FILM FACTORY 75
the government under NEP leasing plans and so needed to realise sizeable profits
to meet their annual lease payments. As a result scores of theatres closed during
1923 and early 1924. Moscow had only half as many theatres open in 1924 as
1917, and the drop was even greater in some outlying areas where middleman
trading was in effect. 39
This theatre crisis jeopardised the industry’s entire development since plans
hinged on the exhibition of foreign films in commercial theatres. The government
responded by initiating an investigation which centred on Goskino’s organisation
and activity. A government commission originally recommended legislation to limit
national and local taxes on movie tickets to 10 per cent. After further deliberation,
the commission called for the dissolution of the Goskino trust and for its
replacement by a stock company which would be sufficiently well capitalised to
realise the distribution monopoly which had previously existed only as Goskino’s
ambition. Goskino was duly disbanded in 1924 and replaced by the stock company
Sovkino. Goskino’s 3.5 million roubles in assets were transferred to Sovkino and
the new company was authorised to sell 1 million roubles’ worth of stock to raise
additional capital. The eventual buyers in this stock issue were not private citizens
but the government agencies which had official links with cinema: the
Commissariat of Enlightenment purchased 55 per cent of the stock, the
Commissariat of Foreign Trade 30 per cent. The investments represented
formalisation of the administrative authority these agencies had already assumed vis-
à-vis the film industry, and since there were no private stockholders to demand
dividends on their shares, the agencies could reinvest their gains in Sovkino’s
operation. Despite its earlier stated opposition to film industry subvention, the
government had finally invested in cinema, and the windfall helped Sovkino
assume its eventual position of industry dominance. 40
The 1924 industry reorganisation also reduced the number of private firms with
which Sovkino had to compete. Sovkino was ordered to buy out the smaller
distribution firms which had operated simultaneously with Goskino and through
such acquisition Sovkino established a genuine distribution monopoly which
extended throughout Soviet Russia. Large, well-financed organisations such as
Sevzapkino and Mezhrabpom continued to compete with Sovkino in the area of
production, but Sovkino contracted to distribute their films. This consolidation of
commercial cinema activity within Soviet Russia coincided with a major
administrative reorganisation of the entire Soviet federal political system. Between
1922 and 1924 the empire was organised into first four and then six federal
republics: Russia, Ukraine, Belorussia, Georgia, Armenia and Azerbaidzhan. By
the time of the film industry’s consolidation in 1924, the non-Russian republics had
established film companies which were tied to the government of each republic. Each
such studio became that republic’s sanctioned national film company in 1924.
Sovkino’s distribution monopoly extended only to the borders of Soviet Russia;
each national studio won a similar monopoly within its republic. These mutually
exclusive monopolies proved beneficial to both Sovkino and the national studios.
The national studios could, and constantly did, buy films from Sovkino for