Tentpoles send int'l B.O. soaring, but distribs fret over smaller pix
In the world of box office, the U.S. used to be the main event — but it’s now one step closer to becoming just another major territory.
In the first three quarters of 2006, domestic box office is up 5%. That’s not bad. But overseas, biz on Hollywood exports this year has risen 19% over the same period.
The international success is thanks in large part to a raft of overperforming tentpole hits including “Pirates of the Caribbean: Dead Man’s Chest,” “The Da Vinci Code” and sequels in the “X-Men” and “Ice Age” franchises.
But even with such good news, studio distribution and marketing execs point to some major concerns: The boffo numbers driving the overseas biz are coming from only a small number of films with higher international appeal than usual.
The 19% number also takes into account revenue, not admissions, so it could be inflated by exchange rates.
(“Perhaps the Euro is a bit different this year,” says one international distrib pro. “And since European business makes up 55% of international, a few points in the exchange rate can give you a big jump.”)
For each “Pirates” and “Da Vinci” — pics with clear international appeal in their casting choices and themes — the playing field is littered with causalties pegged as too American or low on star-power, including “Poseidon” or “Superman Returns.”
And while midlevel pics with international marketing hooks have thrown off some heat overseas — from the Asia-centric “The Fast and the Furious: Tokyo Drift” to fashionista fable “The Devil Wears Prada,” such films haven’t made as proportionally large a dent abroad as they have here.
International territories already have their own local midlevel productions — from Germany’s “Perfume” to Spain’s “Torrente 3: El protector” and France’s “Les Bronzes” — that keep sneaking biz away from Hollywood. At least eight local titles have hit more than $50 million this year; last year there were none.
Studio pros say that because of the encroaching midlevel films, the rest of the world still craves what their own film centers cannot create: megabudget, star-studded entertainment.
“Films like ‘Pirates’ and ‘Da Vinci’ have a real international flavor, and animated fare like ‘Ice Age’ can be customized for the international market,” says Sony international prexy Mark Zucker of the spike this year. “And the films at the top this year are getting better multiples than they have in the past.”
Adding to the bulging numbers this year so far are fast-growing emerging markets, particularly Russia and China, which are now pumping profits at the same time the importance of the U.S. as a world territory diminishes. Russia looks set to soon break into the top 10 overseas territories, vaulting over Italy in the world marketplace.
As a result, studio distribution and marketing staffs are testing some pics slowly — scaling back on day-and-date releases — to be able to change gears when box office doesn’t take off.
“Tentpoles work best overseas because they are not the movies (international territories) can make,” says Nadia Bronson, head of consultancy the Bronson Group and former foreign distrib head at Universal. “But these movies are not working across the board. To be profitable, you must make movies that attract the entire world.”
Adds one distribution pro: “China is growing and going to keep going. The U.S. will end up being just another major territory as movies are becoming more focused on international audiences.”
The spike has arrived even as Hollywood continues having trouble holding on to younger auds, whose attention is diverted by the Internet and vidgames, and baby boomers who’d rather stay home and watch movies on their home entertainment systems.
It’s also come even after dire predictions that the World Cup would make a serious dent in international viewing habits. But Hollywood’s strategy for coping with the Cup — by either avoiding day-and-date releases that would go up against soccer, or counterprogramming to auds that don’t love sports — seems to have worked.
If the current pace keeps up, the year could eclipse the all-time record of $8.5 billion set in 2004 for Hollywood films distributed by the five major distribs — BVI, Fox, Sony, UIP and Warner Bros.
So far, combined foreign cume for the Big Five is $6.8 billion. That’s a huge jump from last year’s $5.7 billion and is even 5% ahead of 2004’s $6.5 billion for the first nine months.
Figures are even more impressive considering the month-long chill the World Cup gave to the global box office.
BVI leads the pack so far with $1.62 billion as of Oct. 1, thanks largely to “Pirates of the Caribbean: Dead Man’s Chest” ($630 million) and “Cars” ($210 million).
Runner-up, with $1.42 billion, is Fox Intl., whose “Ice Age: The Meltdown” earned $430 million.
In third is UIP with $1.38 billion. Universal’s share is $842 million and Paramount’s amounts to $537 million. (UIP is due to be broken up in January.)
Sony’s taken in $1.1 billion, nearly half of that from “The Da Vinci Code.”
Warner Bros., which has seen disappointing results all year, is at the back of the pack, with about $900 million.
Distribution execs believe there’s enough gas in the tank to top the 2004 record, which didn’t include the $240 million overseas from “The Passion of the Christ,” since that pic was handled by a variety of local outfits.
Best prospects to drive biz at foreign plexes before the year’s out include Sony’s “Casino Royale” and “Open Season”; Fox’s “Eragon,” “Borat” and “The Devil Wears Prada”; UIP’s “Flushed Away”; BVI’s “Deja Vu” and “The Guardian”; and Warner’s “Happy Feet” and “Flags of Our Fathers.”
Fox’s “A Night at the Museum” and UIP’s “Charlotte’s Web” will hit only a few markets before the end of the year.
Execs regard “Casino Royale” as the most likely to succeed, based on the solid foreign performance of previous James Bond films. In 2002, “Die Another Day” grossed $271 million overseas — nearly two-thirds of its $432 million worldwide total.