Industry Report: Market trends
The rise of the international box office
by Phil Hoad
17/10/2011 - The Motion Picture Association of America (MPAA), the organisation that promotes the studios' interests home and abroad, never used to mention international box office in its annual report. What happened in 2004 swatted away that complacency: since the late 90s, US domestic box office and international had been running virtually neck-and-neck (see pages 4-5 in this report), somewhere around $9-10bn each. In 2004, international box office exploded by an incredible 44%, to $15.7bn, leaving the US standing. It has continued on its strong upwards trajectory since, climbing to $21.2bn in 2010, with growth in the US (2010: $10.6bn) holding up about as well as Bruce Willis's hairline.
The shift, even if the studios weren't keen to shout about it, had been a long time coming: by the late 90s, the US cinema market was saturated, where emerging economies all over the world were building multiplexes for newly moneyed middle classes to explore their leisure options. But it looked like Hollywood, with its legendary nose for a business opening, was ready. It rolled out global operations at both blitzkrieg and guerrilla levels in the noughties: aggressively carpet-bombing its blockbusters across national borders with simultaneous worldwide releases (2003's The Matrix Revolutions was the first), while engaging also in subtler tactics. As the studios shut their specialty arthouse divisions in the second half of the decade, they were setting up international arms to produce local-language hits in individual countries: Warner, an early overseas player, was making 40 films a year for these markets by 2009. The double-front offensive seemed to be working: last year, American films still took nearly 60% of international box-office.
But 2004's freak box-office surge was dynamic and unpredictable, and it's worth paying attention to the under-currents that year. Apart from the expected box-office growth in countries like China, Russia and India, western Europe also performed strongly, increasing from about $6bn to $7bn. This renewed appetite for film in countries with long-established cinema traditions didn't just benefit Hollywood: local films topped 2004's box office in both France ( Les Choristes [trailer]) and Germany ((T) Raumschiff Surprise). Even the supposedly cinephile-resistant UK saw a bumper, high-grossing crop of foreign-language releases that year, including Hero, The House of Flying Daggers and The Motorcycle Diaries [trailer].
Nations were keen to tell their own stories in their own way, and other nations were eager to watch the results. Another telling statistic: only nine subtitled films grossed more than £1m in the UK in the 90s; 49 made it over that line in the noughties, a huge increase even with inflation. There was a growing audience hungry for alternatives to the usual Hollywood product: a sharper reflection of the globalised world that was coming into being. The film-makers, of course, were among them, and displayed increasing levels of commercial savvy: there were much-heralded clusters of activity in Latin America, South Korea, Russia, Germany and Romania; not quite the "new waves" they were heralded as, but collectively a striking decade's worth of cinema. And that's even before the building noise from the Bollywood and Chinese juggernauts film really began to register. Hollywood, to put it bluntly, has a fight on its hands. International box-office is proving exactly that: international.
It's time to question what shape the champ is in for the scrap. The noughties weren't exactly a creative peak for Hollywood, and its greatest asset, the star system, was malfunctioning. Something was amiss deep-down. Maybe the most telling factor about the 2004 anomaly had nothing to do with cinema: one reason international box-office growth was so high was because the US dollar lost about a third of its value since 2001, pumping up the relative value of other cinema markets. The dollar drop was connected with the US's growing trade deficit, which was connected to the eastwards-shifting balance of power. There didn't seem to be much Hollywood, that great pep-me-up for the American soul, could do against this gloomy backdrop of fiscal backsliding and foreign wars: just keep trotting out the superhero flicks and the remakes, those pop-cultural comfort blankets. No wonder US audiences ebbed away: as David Thomson pointed in a recent essay on Tinseltown malaise, 2010 saw 1.37bn ticket sales in the US, an 8% drop since 2002; only ticket-price increases created the impression of tepid growth.
Waking up to the rest of the world is what Hollywood needs to recover its mojo. Showering the Slumdog Millionaire [trailer, film focus] phenomena in Oscars showed that it could overhaul its idea of narrative perspective as well as its business models; do that, and entertainment takes care of itself. It has every incentive: the Russians are coming, not to mention the South Koreans, the Arabs, the South Africans, the Nigerians… Even the British, when we're not clinging to the idea Harry Potter is a "UK production", are still in with a shout.