As new media companies diversify into other areas to counteract a downturn in advertising spend, Russia’s third-biggest internet company Mail.ru has come up with a novel idea: financing movies. The company is investing $5 million (£3.06 million) in forthcoming Russian horror film Viy, around a quarter of its production costs, in return for a share of box office takings according to Kommersant.ru (via Yakov). The film, based on the book of the same name, is made by the ROSPO film group and comes out in Q409.

SEE ALSO: ‘What Downturn?’ Russian ‘08 Web Ad Spend Could Reach $1.5 Billion: Forecast

Russia is experiencing better growth in online advertising than most western markets—it may have reached $1.5 billion (£920 million) last year. But Russian new media businesses have been hit by regulatory problems and one of the country’s biggest sites, Rambler.ru, was forced to lay off half its staff after anti-trust authorities blocked Google’s bid for contextual ad firm Begun, in which Rambler has a 50.1 percent stake. At the movies, Russia is booming: the country’s box office reached $830 million (£509 million) in 2008, up 47 percent on 2007. Especially if there are content synergies to be gained through investing millions in movies, Russian online media companies are now thinking: why not?