How Hollywood Conquered the World (All Over Again)

Despite globalization's deleterious effect on the U.S. textile, automotive, computer industries, for movies it's still very much America's world.

That's especially true in America itself, where a resistance to foreign film has been helped by Americans' dislike of subtitles and lack of familiarity with dubbing. Because investors don't expect foreign films to play well in the United States, still by far the world's largest and most important film market (China and Japan are vying for second place, but each brings in about one-tenth the combined U.S. and Canada box office), they don't get the same production and advertising budgets that Americans do. At the same time, broadcast television networks refuse to buy foreign-language products, leaving a crucial player in film financing absent when it comes to assembling the kind of multi-source deals that get most non-studio pictures made these days. Production values for American films are vastly superior to foreign ones, helped by budgets that can exceed $200 million (100 times the price of many foreign films, and at least 30 times the estimated $6 million-plus budget of Where Do We Go Now?) And the marketing costs of movies have swollen so that even if a foreign film is less expensive than an American one, it is almost impossible to find a wide audience for it in the United States without spending millions of dollars. There's a strange paradox at play here: While Hollywood films are losing audiences at home, where they're increasingly being siphoned away by social media, games, and the Internet, they're building them abroad. Revenues from American films outside North America constitute more than 60 percent of each year's take by the Hollywood studios, a number that's risen from under 40 percent several decades ago. Paramount Pictures, for instance, made $3.21 billion of its total $5.17 billion earnings in movie theaters for 2011 abroad. This is despite the fact that foreign-made films are gaining an increasing share of their own industries: Japanese are seeing more Japanese films than ever; so are Russians, Chinese, and Koreans. Box office is simply growing across the board in those countries.