The short film was originally intended to be just a small scene in the unfinished feature film "The Tale of the Priest and of His Workman Balda" by the husband-and-wife team of Mikhail Tsekhanovsky and Vera Tsekhanovskaya. Production started in 1932 but ceased in 1936, due to financial problems and lack of support from the Soviet authorities. Only about 40 minutes of film footage were completed. Most of the footage were destroyed during the Siege of Leningrad (1941-1944), when their storage facility was bombed. Vera Tsekhanovskaya only managed to rescue "Bazar" from the destruction.
The film was based on the fairy tale "The Tale of the Priest and of His Workman Balda" (1830) by Alexander Pushkin (1799-1837). In the tale a cheapskate priest hires the worker Balda, with the agreement that the worker will receive no payment and only meager food for a year. All Balda wants in return is to be allowed to strike the priest three times on his forehead. Once the priest realizes that Balda is extremely strong, he tries to find a way to renege on their deal. He fails to do so, and Balda's strikes cause permanent damage to the priest's brain.
The film was intended to be an animated opera with original music. The young composer Dmitri Shostakovich (26-years-old when production began) was hired to compose the music to which all the scenes would be based on. He worked on the film for 4 years, composing an entire 50-minutes long symphony. In 1936, Shostakovich fell out of favor with Soviet leader Joseph Stalin and his works were denounced. His music could not be used for the film, which was shelved. Shostakovich kept his score for the film in his private papers. It was posthumously publicized by his family, first published in book form in 2005, and first performed in 2006.
While the lyrics of the film were supposed to closely follow the language of Alexander Pushkin's original work, the filmmakers felt that additional dialogue and lyrics were needed for a full-length film. The Futurist poet Alexander Vvedensky (1904-1941) was reputedly hired to write the additions. While considered brilliant as a poet, Vvedensky was repeatedly arrested by Soviet authorities for his anti-revolutionary ideas. He died of pleuritis in 1941, while in prison custody. Most of his works were destroyed, though enough poems for a two-volume edition were discovered in the 1990s.
The animation of the film used the so-called "album method" of animation, with characters drawn on paper instead of celluloid. The method was soon abandoned by Soviet animators.