Just about every Hollywood studio is engaged in local productions in overseas markets. Here’s a sampling of what some of them are doing.
When the Chinese government selected Disney’s first local co-production “The Magic Gourd” as one of the three movies that every elementary school child should see in 2007, it was akin to garnering an Oscar nomination.
China has a huge strategic importance for the Walt Disney Co., which is launching its brand aggressively into the world’s most populous country via merchandise outlets, TV shows, stage productions and movies.
Making indigenous films with local partners is one of the most potent weapons in Disney’s diplomatic arsenal. The seal of approval for “Magic Gourd,” a co-production with China Film and Hong Kong’s Centro, based on a classic Chinese novel of the 1950s, was a vindication of that strategy.
“It’s been very successful, not only financially but in terms of spreading a message that we want to be making top-quality films that appeal to the values people in China cherish,” says Larry Kaplan, executive vice president and general manager of Walt Disney Studios Motion Pictures Intl. “It got a good deal of press attention in China, and that’s more important to us than anything else.”
The studio has spent the past decade co-producing or acquiring local pics in Europe, Asia and Latin America, typically driven by the enthusiasm of individual territory managers. But in 2007 the studio took a much more deliberate decision to enter production in the big three emerging markets — China, Russia and India — in a concerted way.
But building talent relationships and navigating China’s rigid bureaucracy is a time-consuming business, and the countless hours spent setting up the next couple of deals have yet to be rewarded.
India and Russia, where Disney is developing three or four projects apiece but has yet to greenlight its first live-action movie, present contrasting challenges. India is a fanatical cinema culture where movies infuse every aspect of daily life, and the arrival of several U.S. studios in the market has resulted in a gold-rush fever, with budgets and talent prices starting to skyrocket. Disney is already co-producing an animated pic, “Roadside Romeo,” with local major Yash Raj.
Russia is a regulatory free-for-all, where the cinema infrastructure is booming, but the creative community remains chronically under-developed after a couple of decades of financial starvation.
Disney plans to be constantly in production in China, Russia, India and also Brazil, where government tax breaks make local production almost a no-lose deal for all the U.S. studios. Between them, those four countries account for nearly half of the world’s population.
Elsewhere, Disney’s local managers have enjoyed solid returns over the past decade. Til Schweiger’s German comedy hit “Knockin’ on Heaven’s Door” was the studio’s first ever local production in 1997; Schweiger also delivered a solid return in 2005 with “Barefoot.” Disney also backs the hugely popular “Wild Soccer Bunch” franchise, with a fifth installment due for release next February.
In Argentina, where Disney owns one-third of local outfit Patagonik, “Son of the Bride” and “Nine Queens” both won kudos. In Brazil, the studio co-produced this year’s Oscar entry, “The Year My Parents Went on Vacation,” and the local hit “My Cousin Basilio.”
Out of France came the unexpected worldwide smash of “March of the Penguins,” which Disney co-financed for a share of global profits. That led to the launch of Paris-based Disney Nature, a division responsible for spearheading the studio’s wildlife movie slate around the world.
Overall, Kaplan explains, “there isn’t a number of movies we need to make or are told to make. There’s no amount of money we are told to spend. We have an open view towards opportunity — if the opportunity is there, the money is there, which we think is a better way.”
Can a Hollywood studio help soothe Mideast tensions?
One of Warner Bros.’ ambitions in its recent megadeal in Abu Dhabi is to make Arab movies for Arab audiences. “There’s a huge population of Arabic-speaking youth that needs to have their voice in cinema, and their own heroes,” says Richard Fox, Warner’s exec veepee of international.
The thinking is that if a U.S. studio can help young Arabs to express themselves on the big screen, it could somehow help diminish the sense of disenfranchisement that fans the flames of extremism in the Mideast.
It might seem ludicrous to ascribe such lofty ideals to a money-making machine like a Hollywood studio. Yet the U.S. majors have become remarkably sophisticated in knowing how their commercial interests are served by promoting local cultures, rather than barging into foreign countries like an occupying power and imposing the American Way.
“This is a marathon,” says Fox. “We are American, there is always a suspicion of our motives, in the last five or six years you can imagine it hasn’t always been easy. We have to win their confidence, not try to control them and deny them their voice. We want to listen to them, because it helps us with our American movies, the closer we can get to that local audience, the better it is for us.”
Under Fox, Warner has invested in growing volumes of local production and acquisition across a dozen territories for the past seven years.
Its low-key approach has resulted in remarkably little friction, with one spectacular exception — the row that blew up in France over Jean-Pierre Jeunet’s “A Very Long Engagement,” one of the very few times Warner made a big-budget local-language film with the explicit intention to distribute it beyond its country of origin.
Jeunet’s pic fell foul of the powerful Gallic majors, who objected to French subsidies going to support a film backed by a U.S. studio. It was a situation that demanded all of Fox’s considerable diplomatic skills.
“If you’re producing a film in another country, you’ve got to be very careful,” Fox says. “The greatest problem is when there are powerful local players. We’ve always made an effort to meet with local studios in Italy, Spain, Japan and even in France, and partner with them. The French government has been very supportive, and now that the ruling has been made (about our ability to access subsidies), we’re going to go back in French production. I don’t think you can be in the business of producing local films outside the U.S. and not be in France.”
Warner will either produce or acquire 35 local pics in 2007, an increase of about a third over its level of three years ago. Starting in France and Germany, it has branched out with varying degrees of success into Italy, Spain, the Netherlands, Brazil, Mexico and most recently China, India (where its first pic, the $12 million actioner “Made in China,” will open in 2008) and Japan, where it has hired a local exec to ramp up the slate. Next year Warner will move into Russian pic with its local exhib-distrib partner Karo.
“Our premise of local production activity in every major country has been to first make a hit in that country. Make a film that culturally connects to that country in the language,” Fox says. “If something has the potential to travel further, that’s great, but we don’t expect it to.”
Typically Warner has a production exec, with a lawyer and a financial exec, in each country where it’s active. “The amount of time you need to spend with a local filmmaker is really a lot. It does place a strain on our system. The last thing you want to do is under-deliver,” Fox comments. “We’ve had forays into local language production, maybe with an American executive who did one or two films but didn’t have a feel for the cultural sensitivities.”
“On the creative side, we have a lot of interaction on development. One of the things we bring is the whole way scripts are developed – let’s get one more rewrite, let’s refine this movie. But we’re an American company, we don’t want to force our way of doing things on anyone. The cultural diversity is very important. All of these stories come out of the country, and certain things, like the humor, unless our people are very attuned to it, it’s hard to force it.”
Gareth Wigan, the elegant, understated Brit who serves as vice chairman of Sony, is the eminence grise of studio production overseas, having started local production operations for Sony a decade ago.
Earlier this year he brought on Deborah Schindler to share the increasing load, as Sony expands its activities into Russia and India, to add to its longer-standing operations in China, Mexico, Spain, France and Germany.
But volume has never been Wigan’s game. Experience has taught him that it’s easy to talk about making lots of films in other languages, but much harder to do it.
“The problem about saying you are going to do three films a year in a particular country is that when you get to July and you’ve only done two, you end up greenlighting a third that you perhaps shouldn’t.”
“We’ve done 35 films in 10 years, by which we mean that we finance and produce them ourselves. Acquisitions are separate,” Wigan explains. “Certain principles are universal — all the final greenlighting is done in Los Angeles, by the two of us with Amy Pascal and Michael Lynton. We almost invariably work with local co-producers, who may or may not put up part of the finance, but customarily we are very much directly involved with the productions.”
For Sony, it’s all about the quality of the individual project, not filling gaps in a distribution pipeline.
“One of the things that differentiates us from some other studios is that our operation is run by production executives, where in other studios it’s run by the distribution and marketing group. That’s symbolic of where our emphasis is,” Wigan says.
With its longtime Asian exec Barbara Robinson in Hong Kong, Sony was an early entrant into the Chinese market, and enjoyed notable hits, including “Crouching Tiger, Hidden Dragon,” “The Road Home” and most recently, “Kung Fu Hustle.” But the latter was two years ago, and there’s been nothing since, though Sony expects to greenlight two more Chinese projects in 2008. It has struck a multi-pic pact with producer Stephen Chow, starting next year with Stephen Fung’s “Jump.”
“There’s been a lot going on in China, just not a lot of movies made,” says Schindler. “We’ve been identifying and establishing relationships with new filmmakers. It’s about identifying the territories where we want to be in business, and making the investment, not of money but of time.”
In common with many of the other studios, Wigan and Schindler have spent recent months in a concerted focus on Russia and India. Sony has a Russian joint venture with Monumental Pictures, whose first two films shot this year.
Sanjay Leela Bhansali has completed Sony’s first Indian pic, “Saarwariya,” but it was a painstaking process. “It’s very easy to say we’re going to do a lot of stuff in India, but it’s taken us two years to get one film made, and we shot for 160 days,” Schindler says. Sony’s recently-announced production and distribution alliance with Eros should bring a rapid acceleration, however: The pair plan to make six to eight movies together in the next couple of years, with roughly half of them targeted at the international market.
Aside from Russia and India, Sony’s 2007 slate includes one film in Mexico, “Casi Divas,” and one in Spain, “Salir Pitando.” Sony’s previous film with “Casi Divas” helmer Issa Lopez was a smash hit, so hopes are high for the follow-up. But local pics are struggling badly in Spain, and “Salir Pitando” was no exception when it opened earlier this month, coinciding with the exit of the studio’s local production topper Iona de Macedo. Wigan suggests that Sony will take a timeout in Spanish production until the market recovers.
Europe has generally proved to be tough sledding for Sony. The studio got into Germany early, enjoyed one hit followed by three flops, and quit the market when crash of the Kirch TV empire caused the bottom to fall out of the showbiz economy. But the recent creative rebound of German cinema means Sony plans to relaunch its production activities there next year.
Fox Intl. co-presidents Paul Hanneman and Tomas Jegeus have been studying a move into local production for the past eight months, analyzing the markets in Europe, Asia and Latin America.
“We’re very close. We’ve pitched several times to senior management about multiple markets, and we’re going to pitch some more,” says Hanneman.
The studio has been active in local acquisitions, notably in the major European territories.
Fox Searchlight distributed Timor Bekmambetov’s debut “Night Watch” and co-produced the sequel “Day Watch,” and Fox Germany and Teuton production outfit Claussen + Woebkem made a five-picture pact.
But Fox has been cautious about production. That’s one reason why Euro exec VP Christian Grass ended up leaving for Universal, after spending a couple of years beating on the door of studio toppers to let him seize the opportunities he saw under his nose.
Hanneman, Jegeus and acquisitions topper Tony Safford have spent much of this year drawing up a fresh and more expansive strategy.
“We’ve been challenged to look at additional revenue streams,” says Hanneman. He points out that Fox was the world’s number one distrib last year, so it hasn’t been under as much pressure as its rival to find extra pics to fill its pipeline.
“There’s not much advantage in rushing into anything,” he adds, suggesting that Fox has been happy to watch the experiments of other studios and learn from them, without incurring the financial risk itself.
“One of the reasons why we haven’t done much before is that what we do as an international distributor is such a completely different business from making local films,” says Jegeus. “Very few films travel outside their own country.”
One issue to be resolved is the balance of decision-making between Hanneman and Jegeus in Los Angeles, and local managers. “Local expertise is very important. Doing it from the home office environment is really steering from 30,000 feet,” Jegeus says.
After the break-up of UIP and the launch of the studio’s own London-based international distribution arm under prexy Andrew Cripps, the studio is gearing up a team of execs to scout opportunities for local pics to supplement its Hollywood slate.
“We’ve got an infrastructure in the office, the question is how do you fully offset that cost,” Cripps says. “I reckon we’re getting 22 to 24 films a year from Paramount, Paramount Vantage, DreamWorks and DreamWorks Animation, plus our Marvel deal, but in the ideal world we would be looking at close to 30 films a year.”
Cripps plans local acquisitions and one or two co-productions in each large territory. He has hired former BBC exec Alexei Boltho to spearhead the international quest from London, reporting to Ellen Pittleman in Los Angeles. He’s tapped French producer Karen Adler in Paris to come up with three to five Gallic pics a year — Par has just committed to its first French co-pro “Magique” — and is hiring in Brazil and Mexico, where Par has taken over the old UIP offices.
None of this would have been possible in the (recent) old days, when Par didn’t have its own direct presence in key territories.
Cripps expects to open his operations in Germany and Italy next summer, followed by Spain and Benelux in 2009.
Because of its history with UIP, Par is coming from further back than the other studios, and it won’t gamble too much coin until it has the necessary local infrastructure and expertise to spend it. “There is money allocated (for production), but how we spend it is not fixed,” Cripps says. “In the short term, we won’t put money into development. That’s a slippery slope, and it has to do with the personnel we have on the ground.”
Of all the majors approaching the foreign-language production biz, none has a more ambitious strategy than Universal. U poached German-born exec Christian Grass to head what it calls its “international studio,” based in London, with 20 to 30 staffers. U has studied the successes and failures of its rivals, and is putting those lessons into practise.
U’s strategy is to identify those territories with a strong enough creative base to generate three to four films a year for the studio, and a strong enough market to make them pay.
“We believe strongly that it is important to have a strong, consistent presence in each country that we will be working in — whether through a Universal executive or with an existing production entity,” says U co-chair David Linde. “We do not believe in a piecemeal approach but that that filmmakers will respond to the understanding that we have constructed a strong, ongoing presence in their production community.”
Plans have been slightly hampered by the fact that Fox would not release Grass to start his new job until Oct. 15. Meanwhile, Linde and his team, including London-based international prexy David Kosse, have been forging key creative relationships. U struck a co-production deal with Timur Bekhmambetov’s production entity in Russia; a $100 million deal to finance five movies produced by Cha Cha Cha, the venture set up by Mexican helmers Guillermo del Toro, Alfonso Cuaron and Alejandro Gonzales Inarritu; and a deal with O2 Filmes, the shingle of helmer-producer Fernando Meirelles, in Brazil.
It also has production execs stationed in Germany, where it has already enjoyed big successes with the “Seven Dwarves” franchise, and in Japan. It has a long-standing partnership with producer Bill Kong for distribution and co-production in China and Hong Kong.
Linde believes that with access to the U.S. and international operations of U and Focus Features, the studio has a competitive advantage over other studios in attracting foreign filmmakers because it can offer “the maximum amount of distribution exposure.”
“Every one of these people — Fernando, Timur, our friends from Mexico, everyone — will get a unique level of support from the studio,” Linde says. “The most important thing is the relationship, and the relationship only works if there’s a real-life perception that the filmmaker has the support and personal recognition of the studio’s executives — the moment they don’t feel that, they might as well be working for a local independent.”
(John Hopewell in Spain, Ed Meza in Germany, Michael O’Boyle in Mexico and Charles Newbery in Argentina contributed to this report.)