Soviet cinema was once renowned for producing great works that followed a loyally Communist script. Drama and propaganda were combined in memorable features such as Sergei Eisenstein's Battleship Potemkin, which was named the best film of all time at the 1958 World's Fair, the first held after World War II.

Cinematography in the Soviet Union was tightly linked to the state's political reality. Vladimir Lenin, the USSR's first head of state, once said: "The cinema is for us the most important of all the arts." The government saw the medium as an ideal propaganda tool and promoted it from the outset, building thousands of cinemas in urban and rural areas. Consequently, Russian filmmaking flourished. Films such as Dziga Vertov's Man with a Movie Camera, Aleksandr Dovzhenko's Ukraine Trilogy and the epics of Eisenstein earned the Soviet Union a glittering reputation in the cultural world.

These days, though, Russian filmmakers say the industry is on its knees, despite soaring box office profits. American films account for about two-thirds of those shown in Russia – and a similar proportion of last year's annual profits of $700m (£430m). Meanwhile, the 7,000 Soviet-era movie screens have diminished to about 2,000 screens at 800 sites.

Half-finished

The Ministry of Culture, the major investor in local production, did not invest in any new projects in 2009. And according to local filmmakers, without state funding it is very hard make a film.

Actor Yuri Vyazovsky signed a contract for a film, with the working title Two Days of One War, last March. But halfway through, production stopped because the crew ran out of money. "The director didn't ask for government funding because he knew he was not going to get it anyway, as he's still relatively unknown," said Mr. Vyazovsky. "We shot half of the film and we don't know if and when we'll finish it."

But the lack of government aid seems to be only part of the problem. Even if a movie is made, it is not likely to make much profit, says Pavel Ogurchikov, the director of a producer's faculty at Russia's most prestigious film school, VGIK. "There are very few private investors in Russian cinema because the proceeds won't be received right away and most of the films are unprofitable," said Mr. Ogurchikov. "In 2008, only three or four films made a profit."

The classrooms at VGIK – where Sergei Eisenstein himself once taught – are full of students. Whether or not they ever get to work on Russian productions depends on whether the government fulfils its promise to increase funding for new film projects in 2010 – and on people's willingness to go and see them.

"Mere copies"

"Our government doesn't give a lot of money to make films, and I don't know why – I believe it's important to show interesting films to our audiences," said Artyom, a final-year student at the producer's faculty. Mr. Ogurchikov agreed. "Russian films are just attempts to imitate US blockbusters. They are poorly made copies and that explains people's preferences," he said.

The recent decline in domestic production has also been difficult for Russian film stars. "I haven't played in a real film for the past three years," said Yevgeny Mironov, an actor who, despite winning many awards at international film festivals, now prefers working in theater. "There wasn't a single film that came out that left me feeling sorry not to be in it."

He, too, thinks that people are simply not interested in Russian films any more. "Everything has been ruined, the Soviet system is dead," he said. "There are lots of great stories, but we can't film them because those people who do go to the movies today wouldn't want to see them."

"Popcorn generation"

Certainly, in terms of technological advances and special effects, Russian films lag far behind Hollywood. But according to acclaimed director Sergey Solovyov, who has just toured the world with his latest adaptation of Leo Tolstoy's Anna Karenina, there are still many talented people in Russian cinematography.

"I believe that in terms of artistic quality, Russian cinema is one of the best, if not the best in the world," he said. "There are a number of young directors in Russia who produce great films, Bertolucci-style films." But because few people see them, he says, it sometimes seems like they're making them "purely for their own satisfaction".

And for that, he does not blame the people, but the poor structure of Russia's film distribution system. "When we started reforming our cinema structure after the fall of the Soviet Union, it was all about reforming film production – to make sure there's no censorship, that anybody can film anything and that there are a lot of production studios," said Mr. Solovyov. "But doing that, we forgot about the distribution, the main economic value of Soviet cinematography. "Now there are a lot less cinemas than before, and they are all popcorn-oriented, where young people go to show that they're of a new, market generation, where they all eat popcorn and talk on their mobiles during films."