Studios compete, work with local productions

As America’s reputation abroad has hit an all-time low, Hollywood is attempting to expand its global grip.

Locally made movies offer increasingly robust competition to studio fare, so the U.S. majors are quietly insinuating themselves more and more into resident filmmaking. They have committed hundreds of millions of dollars to ramp up production slates in Hindi, Russian, Chinese, Portuguese, German, et al. This puts Hollywood in the unique position of both working with and competing against local production.

But do the studios know what they are doing, or are they stumbling around in languages and cultures they don’t understand?

Returns, so far, are mixed. On the Oct. 11-14 weekend, for example, Warner grossed $8.3 million with “El Orfanato” (The Orphanage) in Spain, the second-best opening ever for a local film in that country. So Warner Bros. may crow, but in fact, it had no money in the film’s production. A couple of weeks earlier, the failure of Sony’s “Salir pitando” led to the exit of its Spanish production topper Iona de Macedo.

For all their deep pockets and vaunted expertise, the Hollywood majors haven’t proven any more consistent than local indies in seducing foreign audiences with movies in their own tongue, nor in exporting those pics beyond their home countries.

Sony vice chair Gareth Wigan admits the studio has encountered “profound suspicion” about its motives in every territory it has entered. Warner Bros. famously ran into the power of the French majors, which objected to the studio tapping into local subsidies for Jean-Pierre Jeunet’s “A Very Long Engagement.”

But neither political resistance nor box office setbacks have stopped the studios.

In the past month alone, Sony announced a co-production pact with Indian major Eros, while Warner Bros. unveiled a multibillion-dollar media deal in Abu Dhabi that includes a small side pact to make Arab films. The studio also announced a Spanish partnership with Pedro and Agustin Almodovar.

Universal finally launched its “international studio” in London, dedicated to overseas production, when former Fox exec Christian Grass arrived as president Oct. 15.

Paramount is hiring local production execs in France, Brazil and Mexico. Disney has targeted China, India and Russia for a big strategic push into production. Even Fox, the most skeptical studio when it comes to foreign-language production, is formulating a new global strategy likely to be announced in the coming weeks.

And while Sony, which pioneered the movement a decade ago, has rarely made more than two movies in any one country, Universal is an example of the new gung-ho spirit, planning three or four in each territory.

With huge growth potential, international box office has gained in importance for the U.S. majors. As local auds have shown an increasing appetite for their own movies alongside U.S. blockbusters, the studios have responded by adding a more cosmopolitan flavor to their slates — whether that means hiring foreign helmers to bring a different taste to Hollywood movies, or making local pics intended purely for local auds.

Studios have quickly discovered that their efforts require a degree of humility, deference, diplomacy and patience.

“It’s not like the old days when American companies would come in and say, ‘This is how you do it,’ ” says Richard Fox, president of Warner Bros. Intl. “We’ve learned a lot from foreign filmmakers we work with; we’re building these businesses in these countries. You can’t force it from the outside.”

One of the initial challenges has been the development process. In many territories, the idea of multiple script drafts and notes is alien to filmmakers who are used to shooting whatever they see fit. But the studios say they are just trying to help the filmmakers tell their own stories more effectively.

“It’s not our goal to dictate to people in some tyrannical way,” says Disney Intl.’s exec VP and general manager Larry Kaplan. “We’re concerned about the story first and foremost, and how the film would be accepted by the local audience. Every project we’ve been involved in has been a mutual learning process. The added focus on story consultation has been really welcomed. Not to rush into production is a luxury that everyone appreciates.”

Some locals, however, object that this Hollywood influence is making their indigenous cinema more “formulaic.” The studios certainly tend to gravitate toward broad comedies, family fare and action movies, rather than edgy social dramas — but that, of course, is because these are typically the most popular local genres.

With the Bush era marking a low point in America’s reputation abroad, U.S. studios have countered (consciously or otherwise) with a soft approach to global diplomacy. They want to convince the natives they will join, strengthen and promote local culture, rather than impose the U.S. worldview.

As Deborah Schindler, Sony president of the Intl. Motion Picture Production Dept., puts it, “What we bring is not so much a cultural point of view, but a formula to help bring the best out of their culture.”

That strategic shift is being driven both from the top down and the bottom up. These days, the U.S. majors are owned by global conglomerates whose toppers, such as Jeff Zucker at NBC Universal or Bob Iger at Disney, are urging L.A. employees toward a less Hollywood-centric view of the world.

In part, that reflects the long evolution of the majors from predominantly American businesses to the content arms of global conglomerates with strategic interests in every corner of the world.

As well as holding the potential for great financial return, film is a potent diplomatic weapon to open lucrative markets for a much wider range of business activities — which is why all the studios are being urged by parent companies to get into China, Russia and India as fast as they can.

The growing significance of international revenues has given local execs a louder voice within the studios, and there’s more inclination from the L.A. toppers to give their territory managers leeway to invest in their own countries and cultures — partly because it might make the studio some money, but also because it’s a way of attracting and keeping the most talented local execs.

Clearly, the U.S. majors are no longer content with merely the global box office of Hollywood movies. They want a shot at the rest, too.

Cynics may call such efforts brazen attempts to gobble up the small part of the world’s cinematic resources studios don’t already control. But it also can be promoted as a means to give local filmmakers a bigger platform with which to express their own culture.

Of course, that means the studios have to understand what these filmmakers are trying to say.

Whatever the case, studios often must overcome a chief source of skepticism: Do they know what they are doing, or are they simply foreign strangers?

For example, one studio sent a junior exec to its Hamburg test screening of a Teutonic comedy. He was expected to report whether the jokes were working — even though he spoke no German and the print had no subtitles.

It’s hard enough for a studio exec to keep tabs on a willful director shooting in Louisiana or Canada. But the studio’s traditional methods are really put to the test when execs wrangle with movies simultaneously shot in several different languages and continents. The execs responsible for these activities are rarely off planes, and as Sony’s Wigan jokes, they exist in their own personal time zones.

The studios say their primary goal is, not surprisingly, to earn their money back or make a profit with the local movies. So a key challenge for a studio is how to balance its own quality and financial control with a willingness to defer to its local managers and partners — who may have a surer grasp of what works with their own auds than a studio topper in Los Angeles.

Perhaps that’s why Sony has made “only” 35 movies in a decade across 10 territories — and has managed no more than two in any individual country apart from China and Germany.

“We’d rather do nothing … unless it’s something we passionately believe in,” explains Wigan, who greenlights such pics from Los Angeles, with Schindler and studio toppers Amy Pascal and Michael Lynton. “We’ve made some mistakes and had some hits, but overall we are profitable for the studio, and for us, success is more important than volume.”

Universal, on the other hand, is planning to plunge into foreign production with a radical decentralized structure and a strategy to make three or four films a year in every territory it enters.

“In going out overseas, you have to adapt your perspective to the local country,” says U co-chair David Linde. “Our international production is not based in Los Angeles or in New York, it’s based in London, and it’s run by a German with a long history of being involved not just in overseas distribution but also in local production. Our imperative is to further empower the overseas operation to make additional decisions based on their specific business, not just the business driven out of the U.S.”

U has already struck alliances with Fernando Meirelles and his O2 Filmes shingle in Brazil; with the chachacha venture of Mexican amigos Alfonso Cuaron, Guillermo del Toro and Alejandro Gonzalez Inarritu; and with Russian helmer Timur Bekmambetov.

“People always ask, ‘What do they want?’ But it’s not what we want, it’s what we bring,” Wigan says. “That’s not money — anyone with a reasonable amount of confidence and drive can raise money for a movie — it’s the ability to get people to see a movie. In other words, it’s distribution.”

That means distribution in a film’s country of origin. In many territories, the U.S. majors can offer no particular advantage over distribution via a strong local indie. What they do provide is the potential to take a movie further abroad.

Yet pics such as “Crouching Tiger, Hidden Dragon” or “Kung Fu Hustle” are the exception, not the rule. Most local movies co-produced by the U.S. majors over the past decade have not travelled beyond their own borders any better than indie pics.

“One of the reasons why we haven’t done much local production before is that what we do as an international distributor is such a completely different business from making local films,” says Fox Intl. co-president Tomas Jegeus. “Very few films travel outside their own country.”

There are also surprisingly few examples of filmmakers who have started out making local-language movies for a studio, then being “promoted” onto bigger English-language pics. In fact, the impetus seems to be in the other direction: U did local production deals with Meirelles, Cuaron and Bekmambetov after working with them on international films. It’s more a case of the studio regarding local production as a way of deepening their relationship with a top foreign auteur than of using local production as a development program for new talent.

“It’s about giving the company even more access to the most exciting and forward-thinking filmmakers anywhere in the world,” Linde says. “Focus makes more films with international filmmakers than with domestic ones. The head of production at Universal, Donna Langley, is English. Well over 95% of the people who work for us overseas are not American.

“This is not lip service, this is a global company.”

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