Film Fund-amentals: The Global Agenda

Like Napoleon playing with a map of Europe, Hollywood is toying with the globe. At least that is the gist of a recent New York Times story. In a report on the upcoming ScreenSingapore 2011 festival, the Times finds that the foreign market is becoming extremely important to American films.

Actually, the foreign market is more than important. It has become the lifeblood of the Hollywood industry. Take for example the recent release of Thor. In the US, the thunder god has achieved a respectable but basic take of $145.4 million. But globally, it has roared in at $225 million. According to the Motion Picture Association of America, the foreign box office currently represents about 67 percent of the take. But in the case of Thor, the figure is close to double.

Either way, times have changed. The foreign market has always been important to Hollywood. In the old days, studio moguls worked very hard at controlling the European market with ruthless efficiency. Later, Jack Valenti (as head of the MPAA) would stroke, smooch and, when needed, bully European compliance with Hollywood’s wants. It was a one-way street, and the overseas market was often viewed as a necessary nuisance.

This was also back in the days when the US had global domination of the marketplace. Of course, this was also the time when gasoline was 30 cents a gallon and two dollars went a long way toward a triple feature with snacks at the local bijou. Hollywood movies were the main fare in Europe, and the major American studios pretty much controlled the commercial scene (directly and indirectly) for distribution and production. Sure, during a period from the 1950s through the 1970s, various major European film movements and filmmakers would emerge. But mostly, they had to work around Hollywood control. For example, almost all the key movies of the New German cinema of the 1970s were actually produced by German television. By and large, they were not getting financed by the German film industry (in fact, the German film industry was trying to do business a la Hollywood).

But during the 1990s, a series of changes began to take place. A good guide to this period can be found in the National Reports on the Film Industry from the European Audiovisual Observatory. Hollywood films still dominated, thanks in large measure to a strong control of distribution, but many European countries were also looking for an increasingly diverse approach to production financing. A renewed difference in viewer sensibility would also become apparent. For example, in the United Kingdom in 1997, the top ten films would be a pretty straightforward run of major American movies like The Lost World and Men in Black. But the number one movie that year in Britain was The Full Monty, which aced out Men in Black by about 5 million pounds.

Unfortunately, this was before the global economic deluge. The financial meltdown started in Europe (though thanks in large measure to European investment in American subprime mortgages), resulting in the current fight over austerity measures in Britain, Germany and France to extensive economic collapse in Iceland, Ireland and Greece. On paper, it can be argued that the Europeans are in pretty much the same boat as us Yanks. But in some crucial ways, they are not.

Ironically, one major example of this is the current box office difference. American theater attendance has been in decline for the past several years, and 2011 continues to show a sharp drop (over 30 percent so far). The European box office has been increasing. Why this is happening is not really clear. The news reports seesaw back and forth between stories about how the European Union is providing a workable forum for dealing with the crisis (though this is mostly a theory proposed by the EU) to nearly hysterical accounts of the Chicken Little variety that leave a person convinced that it is time to sell the villa and split for Argentine.

Most likely, the truth is a little bit of both. Either way, the average European is buying more movie tickets than the average American. Undoubtedly, there are many reasons for this (though I am personally inclined toward some of the views expressed in a recent article by David Coates). More information needs to be examined, but the basic fact remains that the film market is shifting overseas.

Which is half OK. After all, it is still a market. A euro is still a euro (which at the moment is slightly better than a dollar), and a paying customer is what you want no matter what language they speak. Hollywood is banking heavily on this increase, and it is working hard to promote products (and influence) in both the European and Asian sphere. The hope is to control and dominate these markets.

But the reality suggests that Hollywood is now entering a contentious new playing field. The more important the foreign market becomes, the more likely the foreign players will want to make moves into the business. Pathe International has just cut deals for more than 70 titles at Cannes, many of them English language productions. It is no secret that Pathe is extremely interested in moving more aggressively into the American market, and this is part of that effort. It will probably fail (after all, it is so far following a model that hasn’t worked before), but it is not alone in this interest.

India is a boom market that staggers the imagination. It also has a long history of movie production that rivals Hollywood. Disney (among others) is seeking ways to exploit this system (OK, technically, the mouse is looking to “help” expand the Indian system under Disney control). But a lot of Bollywood producers are looking to move into American productions. China is another boom market. China is also very particular about the content of its movies. When the Chinese are not pleased about something in a movie, they have the ability to get changes made. Just ask the nitwits who thought it was a swell idea to make Chinese the villains in the Red Dawn redo (but don’t ask them now; they’re busy doing major CGI on lots of uniforms).

So yes, Hollywood is eying the globe. But this time, the globe is eying it back. The international market is a two-way street and Hollywood may — or may not — be playing with any clues.