Why America Doesn’t Count at the Box Office Anymore

The Wrap
July 28, 2011

Hollywood is on global expansion overdrive, with the international box office racking up a larger percentage of overall film revenues than ever before.

The reason for all this continent-spanning success is a recipe that combines three critical ingredients:

For one, modern-day exhibition is paving new roads in far-flung markets like Guangzhou, China and Kaliningrad, Russia.

Also read: $476! ‘Harry Potter’ Shatters Global Box Office Record

Second, filmmakers are crafting their product for the international market like never before, spinning out superhero films and  3D spectacles that often play better in foreign climes than they do in this country.

Third, international performance has become more carefully strategized, with day-and-date releases increasingly becoming the rule for major films.

By now it’s no secret that foreign markets are the one bright spot of growth in the movie business. Last year, according to the Motion Picture Assn. of America, revenue was flat in the U.S. and Canada at around $10.6 billion while the global market reached a record $31.8 billion, driven by a record $21.2 billion overall international grosses.

The foreign box office accounted for a record-high 67 percent of all revenue. And in 2011, there’s every indication that percentage will go up. (See chart below)

Also read: Why the Foreign Box Office Leads: ‘Fast Five,’ ‘Thor’ Open Overseas First

“We’ve been engaged with this since the late 1980s,” Jeff Kleeman, executive producer of “The Change-Up,” told TheWrap. “I just think it takes the town a long time to shift paradigms. It’s hard for us to relearn the rules.”

It’s no longer a question of if, and how many, tickets a movie will sell in Duluth, but how it will play in Krasnodar. (That’s in Russia.)

Hollywood has made no secret of its global appetites, but this summer, the impact of its rabid focus on the worldwide markets is particularly pronounced.

In May, Disney’s “Pirates of the Caribbean: On Stranger Tides” set a new foreign-opening record, capturing $260.4 million in one weekend. That record was soon shattered by “Harry Potter and the Deathly Hallows: Part 2,” which opened to $314 million abroad.

“It’s the one area of the business that is continuing to grow,” Ashok Amritraj, CEO of Hyde Park Entertainment, told TheWrap. “The digital space hasn’t grown as fast as we would like. Global markets haven’t reached their peak. There are more theaters being built and more territories coming on line.”

Though industry trades dutifully focus on domestic opening weekends, the real story is the enormous grosses this summer’s slate of tentpole films has been racking up abroad.

From “Pirates of the Caribbean: On Stranger Tides” to “Kung Fu Panda 2,” films that have underwhelmed domestically, are racking up monster numbers overseas. “Pirates” grossed a so-so $238 million in the United States with a whopping 76 percent of its more than $1 billion take coming from abroad.