Kazakh Cinema Surpasses Hollywood at the Box Office

Kazakh cinema is now outperforming Hollywood blockbusters in terms of box office revenue. The COVID-19 pandemic and the writers’ strikes in the United States have significantly slowed film production, resulting in fewer Hollywood premieres—a situation that Kazakhstan has turned to its advantage.

Over the past four years, Kazakhstan’s creative sector has grown by 40% annually, largely driven by the film industry. Local filmmakers are thrilled: Kazakh films are now outgrossing Hollywood blockbusters. For the first time in the country’s history, a Kazakh film, Dastur, achieved a record-breaking 2 billion tenge in box office revenue. This achievement not only highlights the commercial appeal of creative projects but also gives investors newfound confidence in the industry.

Profitable Holidays

A remarkable example of Kazakhstan’s success is the family film franchise Kanikuly Off-line (Offline Holidays), which follows city children sent to an ethnic camp in a Kazakh village to experience rural life and national traditions. In a dramatic twist, the children are stripped of their smartphones and tablets.

The family film genre is traditionally profitable, but Offline Holidays has far exceeded expectations. Producer and director Ernur Kurmashev revealed that the budget for the first film was only $60,000. “The set was my grandfather’s house. The cast and crew lived and worked there for free, and local villagers were recruited to participate,” he said.

The film grossed $600,000, earning $300,000 in net profit after theater cuts. Its success paved the way for sequels with larger budgets, increasing to $200,000 per film. Each installment generated significant profits, turning the franchise into a “golden goose” for Astana Film Fund.

The franchise even transcended the screen. The very house used for filming now operates as a children’s camp, hosting hundreds of visitors each season. “We followed the Hollywood model,” Kurmashev explained. “It’s a venture business: you invest in ten projects, knowing that two or three hits will cover the losses of the others. From those hits, you build franchises. That’s exactly what we did.”

Kazakh Cinema Overtakes American Films

Film production in Kazakhstan is experiencing unprecedented growth, with annual production volumes increasing by 50%. While Kazakh films account for only 20% of all movies screened in theaters, they generate over 40% of total box office revenue, often outperforming American blockbusters.

Producer Ernur Kurmashev attributes this success to a cultural shift: “Kazakh audiences are growing tired of Western films. People want to see stories about themselves.”

A recent example is Dastur, a horror film tackling the themes of domestic violence and forced marriage. Released in late 2023, the film struck a chord with audiences and grossed over 1 billion tenge within weeks of its release. By the end of its theatrical run, it had doubled that figure, setting a new record in Kazakhstan’s film industry.

Despite such successes, many films fail to achieve commercial viability. Kurmashev noted that these failures discourage investors. “Right now, investments in the Kazakh film industry are chaotic and unstructured. Decisions are often driven by emotion, which is not a sustainable approach,” he said.

Building a Creative State

The potential of Kazakhstan’s creative economy was a central topic at the Astana Finance Days conference. Both business leaders and creatives agreed that the sector holds immense potential, with opportunities for all participants—creators and commercial enterprises alike. However, establishing clear conditions for collaboration remains crucial.

The government has shown a keen interest in this sector. In 2021, President Kassym-Jomart Tokayev tasked the government with developing mechanisms to support creative industries, describing them as sectors of the economy based on intellectual labor. These include art, culture, media, education, design, fashion, and technology—essentially, everything people read, watch, listen to, wear, or use for entertainment.

In the same year, the President announced the establishment of a Creative Industries Support Fund. However, by 2023, the sector’s contribution to Kazakhstan’s GDP remained low—at just 1%, compared to 10% in developed countries. To address this, the government introduced a comprehensive legislative package aimed at fostering the creative economy. This bill, currently under parliamentary review, is expected to be adopted by the end of 2024.

Vice Minister of Culture and Information Yevgeny Kochetov stated at the Astana Finance Days conference: “After the adoption of this bill, Kazakhstan will have a law defining the entire framework for the creative industry.”

Some infrastructure for this initiative is already in place. Ten creative hubs have been established across the country, inspired by international practices, including Azerbaijan’s. These hubs are being developed in collaboration with the government, Samruk-Kazyna, and KazPost. Two more hubs are planned for Petropavlovsk and Oral by the end of the year.

In August 2024, Kazakhstan’s first Creative Industries Park opened in Kaskelen, Almaty Region. The park focuses on film production and includes facilities for the New York Film Academy. Kochetov explained: “The Almaty Region was chosen because it offers everything from a landscape perspective—you could shoot a new Mad Max film here. In IT, we have Astana Hub; now, for creative industries, we will have our Creative Hub. Importantly, this organization will not rely on state funding; its financial sources will be private.”

Funding Cinema Projects

Darmin Sadvakasov, managing partner at Dasco Consulting Group, believes that large investors will soon take notice of Kazakhstan’s creative sector.

“When films are financed by the state, there’s often a temptation for officials to interfere in the creative process, insisting that certain positions go to their acquaintances or relatives. With private investments, there’s significant risk but also a strong motivation to ensure profitability. This will lead to a race for talent, which will ultimately drive the market and increase the earnings of creatives,” Sadvakasov explained.

The economic potential of the creative economy—and cinema in particular—is backed by numbers. In 2024, five films grossed between 1 billion and 2 billion tenge each. Sadvakasov highlighted Dastur as a groundbreaking film that shifted audience attention away from traditional action and comedy genres toward serious cinema.

“There’s reason to believe this trend will continue,” he said. According to distribution forecasts and data from Rentrak, 30 locally produced films are set to premiere by the end of the year, with total box office revenues expected to exceed 20 billion tenge. Experts predict this will increase the market share of Kazakh cinema to 50%.

Currently, most funding in the creative sector comes from venture capital funds, following global practices. One such fund is the Creative Capital Fund, based at the Astana International Financial Center. With a capacity of $50 million, the fund aims to launch multiple commercial films across different genres.

Diversification: The Key to Success

Investing in multiple projects rather than focusing on a single one is a safer approach in the creative industry, explained Tahir Aslyaliyev, partner at Dasco Strategy.

“When you invest in a single project, even if you believe in it wholeheartedly, you risk losing everything. Diversifying into 10 projects, even with an average budget of $400,000 each, is far more effective. This is where venture funds come into play,” he said.

The venture approach relies on a portfolio strategy, where some projects fail, but the successful ones more than compensate for the losses.

“Cinema, as an industry, has a relatively short cycle compared to traditional sectors. Writing a screenplay, filming, and releasing a movie often takes just one year. Investors can quickly determine whether a project is profitable or not,” added Sadvakasov.

The government is also introducing incentives for private investors. A proposed legislative package includes tax rebates of 20–30% on production costs for foreign film companies, as well as a VAT refund mechanism for domestic producers. However, Vice Minister Kochetov admitted these mechanisms are still in their infancy.

South Korea’s Influence on Kazakhstan

Kazakhstan’s Creative Industries Support Fund draws inspiration from South Korea, where the creative economy generates over $12 billion in annual exports. A significant contributor to this success is the global popularity of “dorama” dramas, a hallmark of South Korean cinema.

In 2023, Netflix announced a $2.5 billion investment in South Korean content, spurred by the success of Squid Game, which reached over 130 million viewers in 90 countries.

“When South Korea began producing high-quality dramas, its Ministry of Foreign Affairs approached embassies in Hong Kong, asking them to place these dramas on local television. They also enlisted corporations like Samsung and Hyundai to sponsor advertising slots during broadcasts. Within a month, South Korean dramas became the most-watched shows in Hong Kong, and within three years, they gained global recognition,” said producer Ernur Kurmashev.

Kurmashev believes Kazakhstan can replicate this strategy by involving major corporations in promoting its films internationally. “When you export cinema, you export culture as well. This enhances the country’s image and indirectly benefits local businesses,” he noted.

Infrastructure Challenges

Despite Kazakhstan’s unique landscapes and potential as a filming destination, the lack of modern infrastructure remains a barrier.

“We once met with the president of Warner Bros., and he told us: ‘If you want us to shoot in Kazakhstan, you need to build the infrastructure, ensure security, and establish direct flights from the U.S.,’” said Kurmashev.

Vice Minister Kochetov confirmed ongoing discussions with major American studios and revealed that actor Tom Hardy recently spent several months in Astana, working on an undisclosed project supported by the government.

From Borat to Authentic Representation

Kazakhstan’s image in global cinema has remained largely shaped by Borat. However, there is growing interest in authentic cultural narratives, provided they resonate with universal themes.

Global hits like Game of Thrones and Parasite succeeded because they addressed issues of power, inequality, and human connection—stories that transcend cultural boundaries.

“Our stories need to touch on universal emotions while maintaining their authenticity,” said Aslyaliyev. “Overly ideological narratives often fail. The ones that resonate on a human level tend to succeed.”

The Emerging Creative Workforce

Since February 2024, Kazakhstan has seen the emergence of 6,500 creative enterprises employing around 320,000 people. Most of these businesses are based in major cities like Almaty and Astana.

The government has prioritized six key sectors for development: traditional crafts, fashion and design, cinema and animation, digital art, music, and other creative fields. These areas are expected to generate quicker returns compared to traditional industries, making them attractive to investors.

“Traditional industries, especially those requiring long-term investment, struggle in the current high-interest-rate environment. Creative industries, by contrast, offer shorter cycles and quicker returns,” said Sadvakasov.

Future Prospects

Kazakhstan’s creative economy is poised to become a significant driver of national growth. By fostering talent, building infrastructure, and creating an international presence, the country can establish itself as a global player in cinema and other creative sectors.

As the sector grows, it promises to create hundreds of thousands of new jobs and diversify the economy. With the right investments and strategies, Kazakhstan can redefine its image on the global stage and emerge as a creative powerhouse.