R5, in the film business, is a DVD of a movie sold in Russia very soon after the first screening in cinema, at reduced wholesale prices. It is made with a telecine machine from an analog source and is typically of a lower quality than other retail releases.
Telecine (TK) is the digitization performed by the studio itself with very professional (and expensive) equipment and usually from the original source. The purpose of it is to create a high quality digital copy (usually for a later DVD release). But unlike a DVD, an R5 is released before the digital post-processing is finished. The quality of the rips can widely differ, but an R5 can be almost indistinguishable from a DVD rip since many unauthorized film copies are published onto DVD with minimal editing. Cyrillic letters can be seen in the movie picture when text is replaced by Russian.
This digital post-processing is an important step, and provides many qualitative benefits to the finished conversion and should not be under-appreciated. From color correction to grain removal/reduction there are many steps that improve the transfer that generally the R5 does not have, even if done by the originating studio.
The name R5 refers to DVD Region 5. In an effort to compete with copyright infringement in these areas, the movie industry chose to create a new format for DVD releases that could be produced more quickly and less expensively than traditional DVD releases. R5 releases differ from normal releases in that they often lack both the image post-processing and special features that are common on DVD releases. This allows the film to be released for sale at the same time that DVD screeners are released. Since these screeners are the chief source of high-quality pre-DVD release unauthorized film copies (in comparison to cam or telesync, mostly), this allows the movie studios to beat the infringers to market. Bootlegged copies of these releases are often distributed on the internet and in some cases, R5 DVDs may be released without an English audio track, requiring the encoder to use the direct line audio from the film's theatrical release. In this case, the unauthorized release will be tagged with "LiNE" to distinguish it from a release with a DVD audio track. Before PUKKA/DREAMLiGHT introduced the R5 tag to the warez scene, the R5 releases were tagged as TC, DVDSCR or DVDRip.
The image quality of an R5 release is generally comparable to a DVD Screener release, except without the added scrolling text and black and white scenes that serve to distinguish screeners from commercial DVD releases. R5 quality can be somewhat better than transfers produced by movie bootleggers because the transfer is performed using professional-grade film scanning equipment.
During the autumn of 2005 the Hollywood majors Warner Home Video and Universal Pictures International announced their readiness to place special DVD releases on the Russian market at reduced wholesale prices. [...] Simultaneously, the national representatives of the US studios shrank the window for release to video of new films on distribution (special Russian editions were released just four weeks after the first screening in cinemas)."Archived copy" . Archived from the original on 2009-12-22. Retrieved 2010-01-21.CS1 maint: archived copy as title (link)
We agree with Pukka and will be tagging future releases with R5 if it's Russian retail source. Everybody should be able to see the quality of the release in the dir tag, so please stop fake tagging.
An 'R5' tagged release from the scene is a studio-produced unmastered telecine, put out quickly and cheaply to compete against telecine piracy in Russia. Mostly they are released with Russian audio only, so scene groups have to source direct English audio. Not all studios are on board for this and so do not release them, Paramount is one of them.
Both releases did not take the time to "sub" the scenes where various parts of the film (the ATM) have been changed to Russian.
"A positive role was played by distributing releases with a short window (the difference between film premieres and the release on DVD) and the reduction of prices on wheels" - said Trushin. Four weeks after the premiere of a movie on DVD now appear movie studios Universal and 20th Century Fox, explains Dobychin and added that the recommended retail price of a DVD with movies of these studios, as well as Sony Pictures and Russian producers decreased from 299 to 149 rubles. Prices for DVD studios Disney and Warner Bros. did not decrease.Same article, other source:  Translated: 
This is fairly new movie format. Basically the same as DVD Screener – this kind of release is legal DVD released in Russia to decrease the level of pirated movies in this country. Retail is rushed out by the studio, so there is little to no cleanup of the film after the telecine process. As a result, you can see some scratches, hairs or other mess on the picture, but you will hardly notice it while watching. External English audio is often used, as these are supplied with Russian sound by default.
Video from Russian DVDSCR with Eng Audio supplied by Saosin