Even Cup can't stop H'wood rebound

Last year’s box office slump has ended — and overseas markets have helped shore up the figures substantially.

After nearly six months, the international box office is tracking well ahead of the all-time records set in 2004 for Hollywood films. And though the biz obsesses over domestic grosses, it’s the foreign campaigns that have become the bigger area of growth.

However, the World Cup, which runs through July 9, is taking its toll.

In Germany, home to the tourney, box office plunged 69% as Teutons across the country remained glued to TV screens. Overall biz was down 29% in Blighty as compared with the previous frame, and off 32% from the same weekend last year. And B.O. also took significant hits in France, Spain and Italy, where revs dropped a whopping 59% from the previous weekend.

Hot weather has also become a factor, as Euros tend to look at outdoor activities as preferable to darkened movie theaters. With distribs trying to stay out of soccer’s way, “The Da Vinci” code has been able to continue a strong run overseas and hold up without many alternatives.

But some Asian numbers held steady: Japan is one territory that analysts say is not being kicked hard by soccer.

Besides any competish with the Cup, the outlook this year overall has been quite sunny for Hollywood.

Recent developments underline how potent the foreign box office has become:

Fox Intl. crossed the $1 billion mark in international grosses on June 9, the earliest ever for a studio to reach that milestone.

International grosses for the five MPAA companies (BVI, Fox, Sony, UIP, Warner Bros.) are projected to finish 2006 at $8.7 billion, 10% above last year.

It’s becoming routine for major releases like “Mission: Impossible 3″ to take in more than 60% of worldwide gross outside the U.S.

“Ice Age: The Meltdown” has collected nearly 70% of its total internationally and “The Da Vinci Code” has 71% from foreign markets.

Warner Bros. is hoping to salvage a disappointing domestic performance for “Poseidon,” now at $57 million, with more than $150 million from foreign markets.

With foreign grosses for “Cars,” “Pirates of the Caribbean: Dead Man’s Chest” and “Superman Returns” expected to far exceed the domestic take, foreign distribution execs now believe the 2005 slump wasn’t because of any fundamental problem with the business. Rather, they see the downturn as being largely due to a singularly strong performance in 2004, when seven films topped $300 million in foreign grosses compared with four last year.

It’s been typical for U.S. tentpole films to take in well over half of their worldwide gross in overseas markets. The top grosser in 2003, “The Lord of the Rings: The Return of the King” took in 66% of its gross internationally; in 2004, “Spider-Man 2″ grossed 52% of its total outside the U.S.; and in 2005, “Star Wars: Episode III” accounted for 55% of its total gross from foreign markets.

But the foreign box office has started showing even more power this year, most notably via “The Da Vinci Code.” When it becomes the 22nd film to gross $700 million combined, it will have done so with about $200 million domestically (a mark achieved by 68 other films) and $500 million foreign (achieved by only 11 others).

The overseas traction for “Da Vinci” and “Ice Age: The Meltdown” also underline another trend — the expanding foreign appetite for all kinds of Hollywood films.

In the past, the only other Hollywood pics to gross more than 70% abroad tended to be those with a broad historical canvas, set outside the United States: “The Last Samurai,” “Troy,” “Alexander,” “King Arthur,” “Schindler’s List” and “Kingdom of Heaven.”

Many overseas hits shared the characteristics of being shot abroad, using foreign actors in foreign settings and appealing to audiences seeking classic escapist entertainment.

There are still plenty of Hollywood films that don’t work particularly well overseas — romantic comedies, horror films, gritty inner-city dramas or stories about American sports. Some seemingly successful films showed only modest foreign traction, partly because distributors knew there wouldn’t be much of an audience overseas — “Wedding Crashers” (27%), “Training Day” (27%), “Four Brothers” (19%) and “The Longest Yard” (17%).

But, with overseas markets growing at a faster pace than the United States, the pressure’s growing for films that can perform internationally. And the list of foreign over-performers is becoming harder to categorize, since it now includes last summer’s oddball international success “The Island,” Woody Allen’s black comedy “Match Point” and this year’s domestic flop “Basic Instinct 2.”

That trio has joined an already eclectic group — “Die Hard: With a Vengeance,” “Mary Shelley’s Frankenstein,” “The Fifth Element,” “The Beach,” “Reservoir Dogs,” “Sliding Doors” — as films that have hauled in at least 70% of their total box office take in foreign markets. Such a list could also include studio films produced outside the U.S. such as “Wallace & Gromit,” “The Name of the Rose,” “Babe,” “Bean,” “Love Actually” and the two “Bridget Jones” films.

That’s not to say it’s any picnic for studios in executing foreign campaigns. There’s now less and less time to plan; because of the growth of piracy, studios are under more pressure to open films close to the U.S. release.

Craig Dehmel, Fox Intl. VP of sales and strategy, noted that he faced some trepidation in going day-and-date overseas with “X-Men: The Last Stand” on more than 8,000 foreign screens only a week after the opening of “Da Vinci.”

“It’s a little scary being that close to ‘The Da Vinci Code,’ but we think our movie has enough of a four-quadrant appeal to be a good alternative in foreign markets,” he says.

Dehmel also cited piracy. “This film plays to those who know how to download; we know it’s not optimal in some markets to go day and date but (piracy is) a big motivation.”

The increased reliance on foreign markets has been underscored by Paramount and Universal undoing their two-decades-long distribution alliance, UIP, in 15 major markets. The creation of separate foreign distribution operations, which goes into effect in January, shows that both studios see foreign markets as far too valuable to be shared with a rival.

Particularly tricky for studios is that the exhibition biz is seeing its major growth from unexpected markets like South Korea, which produced the biggest grosses of any foreign territory for both “The Island” and “Mission: Impossible 3.”

As counterintuitive as it seems, it’s places like Seoul that are paying the tab these days. So studios may be asking themselves more and more how they can sell tickets in expanding markets like Russia, the Ukraine, Poland, Turkey, the UAE and Venezuela.

(Ian Mohr in New York, Sheri Jennings in Rome, Patrick Frater in Hong Kong, Mark Schilling in Tokyo, Ed Meza in Berlin, Liza Klaussmann in Paris and Esther de Prado in Madrid contributed to this report.)

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