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‘Made in USA’ losing its appeal

Times Staff Writers

When Fox Searchlight unveils a movie at a film festival, savvy American filmgoers have come to expect the production to make a big impression at their local theaters -- “Little Miss Sunshine,” “Napoleon Dynamite,” “Garden State,” to name just a few recent examples.

Yet U.S. moviegoers are unlikely to see Catherine Deneuve’s “Apres Lui,” a Searchlight movie premiering at this year’s Cannes Film Festival. That’s because the studio made the movie in French for the French.

Much of Hollywood’s globalization movement has focused on U.S. studios hiring foreign directors to make English-language movies, or American productions shooting in Morocco, Hungary, Romania -- wherever the story works and the labor is cheap. But a different kind of international business is mushrooming, and its dividends are palpably visible at the 60th annual Cannes Film Festival.

The festival is both a competitive showcase and market for new productions. Historically, buyers on the sales floor have been international distributors browsing through stacks of American movies, from prominent star vehicles to low-budget slasher films.

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But as if on a crash diet, the foreign appetite for U.S. productions is tumbling, with foreign markets turning to their own locally produced movies to fill the void. Hollywood blockbusters such as “Ice Age: The Meltdown” or “Spider-Man 3" are still huge overseas. Increasingly, though, movies produced in foreign markets are pushing aside movies made in the USA.

For the first time in 30 years, Japanese-language movies accounted for a majority of Japan’s ticket sales, and their local productions are making equally strong gains around the globe. In Brazil, Fox’s Portuguese-language production “If I Were You” sold even more tickets than the American blockbusters “X-Men 3" and “Pirates of the Caribbean: Dead Man’s Chest.” Last week, seven of the top 10 movies at the South Korean box office were made in South Korea, China or Japan. French films accounted for 46% of the total box office in France last year, up from 35% the year before, according to tracking service Nielsen EDI. The Sony-backed “Ninas Mal” (“Charm School”) sold more than $7 million in tickets in Mexico.

“Local productions really have gained dramatically in terms of market share,” said Paul Hanneman, Fox’s co-president of international theatrical distribution.

Several concurrent trends appear to be driving the business, according to executives involved in the local language business. First, some foreign moviegoers (and their governments) are pushing for greater cultural nationalism, possibly stemming from anti-American sentiment. At the same time, an explosion of local television productions is yielding a fresh generation of actors and filmmakers, with new theaters expanding moviegoing options. And the flood of American studio money into these foreign-language productions has become an accelerant to it all.

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“One of the paradoxes of the world becoming a global village is that people now say they have the time, the money and the inclination to see more and more of something that’s their own,” said Gareth Wigan, vice chairman of Sony’s Columbia TriStar Motion Picture Group. Sony announced earlier this month that Wigan and Deb Schindler would head a new international production arm with the goal of recapturing more of the market.

Local productions also help overcome restrictive quotas; China, for instance, allows fewer than two dozen non-Chinese films into its theaters every year.

Given the potential rewards -- and the modest production and marketing costs compared with American studio productions -- Hollywood is rushing into India, China, Russia and seemingly everywhere else to join forces with local filmmakers.

The most popular films in many of these countries will continue to be American behemoths such as “Spider-Man 3.” But local-language productions can still spark steep profits; in a good year, a studio can pocket $50 million to $75 million in earnings from these films.

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The key test is whether a film can succeed in its home country. In Argentina, Disney scored a solid local hit with “El Raton Perez.” Every now and then, though, one of these American-backed local-language productions crosses its original borders and becomes a global triumph.

Released in 2005, “Kung Fu Hustle,” a goofy spoof on martial-arts movies that cost about $20 million to produce, turned into an international phenomenon. With global ticket sales of more than $100 million, it was hugely profitable for its producer, Columbia Pictures Film Production Asia. (Not surprisingly, Sony is making a sequel). Sony has also signed a multi-picture production deal with Star Overseas, the Hong Kong-based production company of “Kung Fu’s” director-star Stephen Chow.

That’s not to say it’s been easy. Hollywood can still struggle figuring out the arcane, sometimes complicated filmmaking systems in other countries, especially India and South Korea. Anti-Americanism, some say, also has hindered the studios’ ability to stroll into foreign countries and establish what might be perceived as a filmmaking colony. Instead, the studios have found the most effective way to make movies abroad is to partner with local producers.

In China, Disney recently announced a Mandarin co-production with the state-run China Film Group on an animated/live-action movie about a magical squash-like vegetable called “The Magic Gourd.” Despite some past Chinese productions (including last year’s “The Painted Veil”) having battled Chinese censors, Disney is confident its collaboration will be smooth.

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“More than [just] approve of the film, they are elated by it,” said Larry Kaplan, executive vice president and general manager of Disney’s Buena Vista International. “It epitomizes certain values the Chinese government wants to accentuate for its country.”

Universal Pictures recently signed a three-year deal with Oscar-nominated director Fernando Meirelles (“The Constant Gardener”) to produce English- and Portuguese-language movies from his Brazilian company, O2 Filmes.

Meirelles said he expects to release at least three movies a year under his Universal deal. Their first, the drama “Adrift,” will be directed by new Brazilian director Heitor Dhalia. Meirelles said the Universal deal will allow him to put together a slate of movies instead of the usual one project at a time.

“It’s always difficult to get financing for films,” said Meirelles, noting that Universal will finance all projects they approve. “With this partnership, all the writers and directors in Brazil are coming to us.” Universal also recently signed a deal with Mexican filmmakers Alejandro Gonzalez Inarritu, Alfonso Cuaron, Guillermo del Toro and two others to produce and distribute five of their films abroad -- several of which will be made in Spanish.

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“The idea is to do things differently and to think about how you become a home for global filmmakers,” said David Linde, Universal co-chairman. “It’s about being in business where there is big business.”

Filmmakers such as Meirelles, South Korea’s Bong Joon-ho (“The Host”) and Germany’s Tom Tykwer (“Perfume”) know they are competing with Hollywood for audience attention, and they are willing to use special effects, quick cuts and lots of action to get people into theaters.

“People are willing to see European films if we are willing to give them the same value for their money,” said Florian Henckel von Donnersmarck, whose “Lives of Others” was neither fast-paced nor laden with effects but managed to attract large crowds in Germany.

Made for about $2 million, “The Lives of Others” not only captured the foreign language Oscar but also grossed about $65 million worldwide. It could not have been made without a $325,000 investment from Buena Vista International, which also distributed the movie in Germany when no German distributor would touch it.

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“A European film has to be several times as good to be able to compete with an American film,” said Von Donnersmarck. “You have to make up in storytelling what you don’t have in production value.”

Tom Bernard, the co-president of Sony Pictures Classics, said that, while he is not seeing as large an influx of Hollywood money into foreign productions as others detect, filmmakers do have more tools at their disposal.

“These local-language folks are making Hollywood-style movies for their local market,” he said. “Very seldom did you see anything in other countries close to those special effects we see now.”

If American-backed foreign-language productions are going to continue to thrive, however, the stories must remain relevant to the local audience and not be calculated to play in the global marketplace.

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“A wonderful Argentinean film,” said Tony Safford, Fox’s senior vice president of acquisitions, “doesn’t have to work in Mexico.”

john.horn@latimes.com

lorenza.munoz@latimes.com

Horn reported from Cannes, Munoz from Los Angeles.

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