Hollywood seeks action overseas: in China, India, Mexico, Russia, Brazil, South Korea, Estonia, Hong Kong and Taiwan

Chinese-language action-comedy directed by the actor Stephen Chow, "Kung Fu Hustle", was a blockbuster in Asia in 2004, bringing in $67 million at the box office there, and $34 million more elsewhere, including the United States. ●It is a fact that Chinese films top Hollywood's at mainland Box Office. China has not only survived what it once described as the cultural invasion of Hollywood, but it apparently is eminently holding its own. Daily Variety reported today (Wednesday) that six of the top-10-grossing films in China last year were locally produced, marking the first time local films outgrossed imports since China began allowing foreign films to be shown in 1994. The biggest earner was also China's costliest ($30-40 million), Chen Kaige's The Promise, which took in $18 million in China and is set to be released in the U.S. on May 5. The No. 2 film was Harry Potter and the Goblet of Fire, with $11.5 million. ●… Hollywood studios are looking to the burgeoning market for local-language films as a relatively bright spot in a ho-hum business. ●Last year, Walt Disney entered into a joint venture to make its first Chinese-language film, which will be released there this year. In January, Twentieth Century Fox, a unit of News Corp., scored a major hit in Brazil with the Portuguese-language body-switching comedy "If I Were You." ●Sony, along with Warner Brothers Entertainment, is a leader in local language production and is making films in India, Russia and Mexico in 2006. And recently, Tom Freston, chief executive of Viacom, which owns Paramount Pictures, said he, too, was eager to make movies in India. ●One reason the studios are looking overseas is because moviegoing is growing at a faster clip outside the United States than in it. In 2005, the worldwide box office tallied $23.24 billion, a decrease of 7.9 percent from 2004 but still a 46 percent increase since 2000, according to the Motion Picture Association of America, which tracks the box office performance of Hollywood's major studios. By contrast, the U.S. box office, which represented $8.99 billion, or 39 percent, of that $23.24 billion, has increased only 17 percent since 2000. ●"The template for popular culture comes from Hollywood, but the interest is becoming more local," said Tomas Jegeus, co-president of Twentieth Century Fox's international theatrical distribution division. "Either you say, 'We are going to protect what we know,' or you realize that the world is changing without you." ●Still, as more studios go native, there are significant challenges even for the most world-savvy. First, Hollywood studios have sought to acquire the rights to distribute foreign films largely to fill their vast distribution pipelines, which are expensive to maintain. And despite the influx of interest and money, the market is tiny. Most studios, in fact, will not finance a project unless they have a shot at breaking even at the box office. In the United States, most studios factor in DVD and television sales when calculating profit. ●Last year, 549 new movies were released in the United States alone, according to the Motion Picture Association of America. By contrast, the number of local-language films championed by Hollywood studios since 2000, either solely or jointly with a local production company, is barely a third of that amount, according to movie executives. ●Profits are slim, as well. Earning $3 million to $5 million on a film that costs about $1 million to make is "huge," said Richard Fox, executive vice president of international at Warner Brothers Entertainment, a unit of Time Warner. His studio has produced or co- produced 30 local-language films including "A Very Long Engagement" ("Un Long Dimanche de Fiançailles"), made in France and released in 2004. "It's distorting to compare most markets to the United States," he said. ●But what may be the biggest obstacle for studios is what they have the least control over: movie theaters. Many countries, including Russia, Brazil and South Korea, have a limited number of theaters, let alone 24-screen multiplexes, making an American-style wide release virtually impossible. ●Fox's "If I Were You" had a wide release in Brazil. It opened on 200 movie screens and has brought in $11.5 million at the box office, making it a big hit. By contrast, a blockbuster in the United States can open on as many as 3,700 screens and bring in as much as $65 million at the domestic box office in its first weekend. ●China, where many studios are seeking to expand, has about 5,000 movie theaters with 10,000 screens, according to movie executives. But most are antiquated, built in the post-World War II era with no air-conditioning. Because of this, Time Warner has invested in five air-conditioned theaters with about 45 screens in China, a spokesman said. ●Still, what studio executives are hoping to find is that rare gem that crosses local borders and becomes a hit in the United States or, better yet, worldwide, (be it made in Estonia or China). "What I do in talking with filmmakers is I work on the basis that I'm there to learn," said Wigan, who is vice chairman of the Columbia TriStar Motion Picture Group, a division of Sony Pictures Entertainment. "I'm there largely to ask questions." ●"Crouching Tiger, Hidden Dragon," the martial arts movie directed by Ang Lee in 2000, was one of those rare hits for Sony. It was distributed by Sony Pictures Classics in the United States and brought in $128 million at the U.S. box office. Over all, it garnered $209 million worldwide. ●Sony has either produced or co-produced 27 international films since 1998, Wigan said, including 8 in China, 4 in Hong Kong and Taiwan, 14 in Britain and Europe and 1 in Mexico. The company, like Warner Brothers and Fox, has been active in Brazil largely because of the tax breaks. Incentives on taxes collected to distribute movies in Brazil make it advantageous for studios to spend money there or forfeit the fees. ●While many companies are predicting that India will be next hot market - it already has a thriving local movie industry - most studios have fixed their sights on China right now. Almost all the major studios have stepped up the financing of projects there with the hope of attracting even a small fraction of China's 1.3 billion population to local movie theaters. One more reason they are investing locally is that the Chinese government restricts foreign imports to 20 movies a year. ●But entertainment analysts say that in bolstering local Chinese movie production, studios can also seek more favorable terms when negotiating with Chinese regulators who control not only what foreign movies are imported, but what shows end up on television and what DVDs are sold in stores. According to the Web site of the U.S. Embassy in Beijing, 95 percent of the films sold in China are pirated. ●Disney, a new player there that is making the Chinese-language film "The Secret of the Magic Gourd" this year, has discussed building a theme park on China's mainland as well as expanding its television offerings there. ●"We are not doing this to grease the political channels; we are doing it because some day we would like to make local-language, Disney-branded films," said Mark Zoradi, president of Disney's Buena Vista International distribution unit. ●Full story by Laura M. Holson The New York Times, MONDAY, APRIL 3, 2006 http://www.iht.com/articles/2006/04/02/yourmoney/movies03.php 2006-04-09 02:52:36
2006-04-09 03:28:07