The fast-growing Russian film industry looked like it had hit a bump in first half 2009 as the financial crisis bit and piracy undermined key growth areas. But full-year figures for 2009 and data for first half 2010 show the industry getting back on track. These are the findings of The Film Industry in the Russian Federation the latest report commissioned by the European Audiovisual Observatory from research company Nevafilm with contributions from RFilms and Groteck Business Media. The report outlines developments in the following areas: Feature production investment showed signs of revival in 2010 with consolidation among major players and restructured state investment though the TV production sector remained sluggish. Russian cinema admissions continue to grow by on average 14 percent per year. The continued growth is largely down to the increasing number of 3D films in circulation – 15 in 2009 and around 40 in 2010 - and the growth in the number of digital screens. For the same reasons local currency box office revenues grew by 13 percent in 2009 though in dollar terms revenues fell due to ruble devaluation during the crisis. National market share fell back slightly from 26 to 24 percent in 2009 but nevertheless remained strong. Popular national titles tended to fare poorly outside Russia with European audiences preferring arthouse films which went on limited release or even straight to video on the Russian market. Screen growth slowed significantly in 2009 as the financial crisis hit the property sector. 3D was the main motor for growth in digital projection facilities with 100 new screens added in late 2009 for the launch of Avatar and a further 80 for Shrek Forever After bringing overall digital penetration of modern screens in Russia to 23 percent in July 2010. Plagued by piracy the Russian home video sector has traditionally been weak. However a resurgence in sales volume for licensed DVDs in early 2010 would appear to indicate that the slump which had touched the sector in 2009 may now be over. VoD services have also promised new revenue streams for Russian content providers. After a first wave of services on cable and IPTV networks in 2007-2008 mid-2009 saw the arrival of the first Internet-based services with numerous new entrants on the market during the second and third quarters 2010. Hampered by a limited content offer the market remains embryonic while increasing penetration of broadband internet across Russia’s regions has tended to exacerbate the principle challenge: unauthorised file-sharing across peer-to-peer networks.