More and more, international markets — particularly China, the largest film market outside the U.S. — are becoming a crucial factor in a film’s overall success.
In the case of a movie like “Pirates of the Caribbean: On Stranger Tides,” for example, of its $1 billion worldwide gross, about 77 percent ($802 million) came from foreign releases. Even movies that tank in the U.S., like “Battleship,” can now sometimes recoup their expenses overseas.
Because of this, Hollywood is developing a new global perspective, making decisions that will maximize films’ international appeal.
However, foreign box office doesn’t play by the same rules as domestic, making the numbers a lot less reliable.
As described in “The Hollywood Economist” by Edward Jay Epstein, only about 40 percent of the revenue from foreign releases goes to the studio. But after expenses, including tariffs for distribution, the studio might be lucky to ever see 15 percent of that.
Conglomerates like Time-Warner and Disney can occasionally snag better deals, according to David Mumpower of Box Office Prophets, but not always.
In other words, domestic box office frequently counts for more than foreign. Many of the movies that have crossed the $1 billion line thanks to huge international releases might not be nearly as profitable as they appear on paper.
A native of Utah Valley and a devoted cinephile, Jeff is currently studying humanities and history at Brigham Young University.
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