The strange trajectory of Hollywood movies: Fizzling in U.S. but skyrocketing overseas


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As Thomas Friedman famously put it in his 2005 bestseller, the world is flat. With the arrival of outsourcing, open-source software and Google-style search engine technology, great ideas, brainpower and money fly around the planet faster than ever, making historical and geographical divisions increasingly irrelevant in the global marketplace.

Except when it comes to Hollywood, where the world is hardly flat at all. In other arenas, quality is king, which is why we don’t see millions of Americans driving Yugos rather than Toyotas or millions of Japanese listening to music on Microsoft’s Zune instead of Apple’s iPod. But in the movie business, the world has a strange tilt on its axis. Each year there are a surprising number of movies that are thoroughly rejected by American consumers that go on to enormous success around the rest of the globe.


‘Gulliver’s Travels’ is a bomb in the U.S., struggling to reach the $40-million mark. But overseas, the 20th Century Fox film is a hit, on its way to grossing $170 million, four times what it’s done in the states. Sony has similarly high hopes for ‘The Tourist,’ which has made a little more than $65 million here. The studio projects that the film will eventually make another $160 million around the world. The same goes for last summer’s ‘Prince of Persia: The Sands of Time,’ which was written off as a costly flop after it made only $90 million in the U.S. But the film has gone on to make an amazing $244 million in the international marketplace.

What’s going on here? How is it possible that an American-made product can be rejected by its home-grown consumers, yet embraced by moviegoers elsewhere? Everyone has a theory about what’s going on, but it turns out that most of the films that adult moviegoers and critics in the U.S. view as depressing examples of the decline of American filmmaking--big 3-D action-adventure spectacles and clunky movie-star thrillers--are the very films that do best in the overseas market.

It turns out that Hollywood is taking advantage of its most compelling competitive advantage in world cinema. The epic scope of its Big Event movies can’t be achieved in other countries, which is why some of the most striking overseas box-office successes have been achieved by 3-D movies or special-effects driven animated films. When it comes to the riches available in the ever-expanding global market, there is no better example than the box-office trajectory of the ‘Ice Age’ series. The franchise has largely remained constant in the U.S.--with each of the three films making between $176 and $197 million--while the films have exploded around the globe, with the first film making $207 million overseas, the second one $457 million and the third one a whopping $690 million.

The potential for overseas box-office bullion is also driving the explosion in 3-D releases. 3-D movies have two distinct advantages overseas--they can’t be duplicated by local productions and, even better, they have a built-in safeguard against piracy, since the 3-D ingredient can be seen only in a theater. The real payoff came for horror films like the ‘Resident Evil’ series. When the franchise’s third installment was released, it did $50 million in the U.S., $96 million overseas. But the fourth film, ‘Resident Evil: Afterlife,’ released in 3-D, exploded when it was released last fall, making $60 million in the U.S. but an astounding $236 million overseas.

As Jeff Blake, Sony’s chairman of worldwide marketing and distribution, explains: ‘We’re increasingly having to compete with local product in each marketplace, so to get people’s attention away from the local product, you need something special. 3-D is the element that really makes the film stick.’

In fact, it’s because of the booming market overseas that studios have largely abandoned making dramas, since that’s exactly the kind of genre that has the most difficult time competing with locally produced product. It’s why even after two leading actors and an acclaimed filmmaker signed on to make ‘The Fighter,’ Paramount didn’t give the film the green light until it had outside financing--there’s no bonanza for such a uniquely American story overseas.


This phenomenon isn’t limited to the movie business. According to Andrew Kronfeld, the executive vice president of international marketing at Universal Music, some pop stars find little success outside of the U.S. while others are huge all around the globe. Before his death, Michael Jackson was virtually a pariah in the U.S., yet he continued to sell enormous amounts of records overseas. Pink sells far more records overseas than in the U.S. On the other hand, Jay-Z is far bigger star in the U.S. than elsewhere.

Some music genres, like frothy pop and dance music, translate globally just as well as special-effects studded action films. ‘The pop-leaning hip-hop artists with Top 40 radio acceptance do really well internationally, while hip-hop artists with a mix tape street vibe have a harder time getting acceptance,’ Kronfeld says. ‘In general, pop love songs and dance beat songs translate a lot better than singer-songwriters or hip-hop artists with a real street vibe. Lady Gaga and the Black Eyed Peas work everywhere, but artists like John Mayer and Dave Matthews just don’t sell that well overseas.’

Making movies or music that can sell everywhere is good news for media conglomerates that are eager to grow, since overseas markets are expanding much faster around the world than in the U.S., where movie attendance is flat and record sales are in steep decline. But it’s less of a boon for artists who value putting a strong sense of place into their stories. As former Universal Pictures co-chairman David Linde put it: ‘Movies that are strongly culturally rooted just don’t travel as well, and a reason why few American comedies are big hits overseas. What’s funny in France isn’t necessarily what’s funny in the U.S., and vice versa, because comedy is so often rooted within your own culture and its personality.’

Of course, for the past 100 years, America’s movies have been deeply rooted in our fabled land of cultural opportunity. So the global applause for cultural exports that weren’t even successful in America could well be a troubling sign of the beginning of the end of our cultural hegemony. No one makes more popular movies than the ones made in America, but it can’t be great artistic news when it turns out that the movies that have the biggest global reach are the ones that are the least distinctively American.

-- Patrick Goldstein