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Hollywood Singing "We Are The World" As International Box Office Continues To Wallop Domestic

Photo of Jim Amos By Jim Amos | Box Office Insider July 17, 2014 at 11:58AM

Contrary to the Disneyland ride, it's a big world after all. International box office is trouncing Domestic at a 2/3 vs.1/3 rate and is poised to go even higher in Post-World Cup 2014.
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China movie theater

When I was President of Distribution at Sony Pictures and watched a movie like "MIB 3" or "After Earth" significantly over-perform internationally as opposed to domestically I used to joke that I hoped our little territory could stay ahead of Norway or Burkina Faso in the pecking order. Oh sure, we could always count on Adam Sandler comedies, films based on American TV shows such as "21 Jump Street" or Screen Gems horror titles that didn't translate to overseas moviegoers.  But those types of American-centric offerings have become fewer and farther between in the studio landscape.  

Transformers

I recently looked at the top 50 films for each of the last three years (I only included films that were released both here and internationally) and for each of those years overseas markets accounted for roughly 63% of total worldwide box office.  For every "Neighbors", where domestic ran at 58% of worldwide box office there were two or three "Amazing Spider-Man 2" which fell below 30% of worldwide and currently, international returns on "Transformers: Age of Extinction" are accounting for a staggering 72% of its total worldwide loot.  

It's difficult to see the trend making a u-turn anytime in the near future.  North American exhibitors have done an excellent job of hanging on to their audiences (and in the case of older audiences, bring them back to the moviegoing experience) in the face of an onslaught of viewing platforms such as VOD and handheld, with massive improvements to the theatrical experience such as luxury seating, premium large format experiences such as AMC's ETX or Regal's RPX, in-theatre dining and online ticketing to name but a few.  Until exhibitors figure out a way to get an older teen audience, once the core demographic of moviegoers, back into screen #6 on a Friday night (hello social media friendly auditoriums!), then growth possibilities on these shores appear limited.  That's not the case internationally as other than in Western Europe, growth opportunities abound.

So let's take a look at the major reasons for the box office shift from Domestic to International

China Cinema 2

1)  China.  It's pretty simple, more Hollywood films in more theatres on more Imax and 3D screens with a massive, Hollywood-hungry population of 1.3 billion people.  Territories such as Russia and Brazil have also spurred overseas growth and Southeast Asia is proving to be The New World for Hollywood.

2)  An overall improved moviegoing experience.  To note that the quality of movie theatres overseas have been vastly improved upon over the last several years is an understatement, and has been the case in virtually all territories, but especially in the BRIC countries, as larger chains have bought out smaller circuits who were notoriously hesitant to sink box office dollars back into the theatrical experience.  Moviegoers overseas now experience many of the same amenities as American audiences do, including stadium seating auditoriums, premium screen and multi-dimensional experiences, dine-in options and the like.

Departures Board

3)  Social media.  Remember when we used to marvel when a film announced it would be released worldwide day-and-date?   I know, it wasn't that long ago, was it?  Sure some territories still open a week or two ahead or behind others, but that's mostly due to local holidays or release schedule traffic jams, not because local moviegoers are unfamiliar with Hollywood's offerings.  Also, press junkets and premieres used to mean New York and/or Los Angeles..  Now they involve multiple stops across the globe.  Tom Cruise used to be able to show up somewhere in Westwood on a Tuesday night and be done with it.  Now his pre-release itinerary looks like the Departures board at de Gaulle Airport.

Tom Cruise

4)  International Casts.  Try to find a tentpole release that doesn't have the international market in mind in how it casts the film.  Appeal to Asian and Latin American markets is a major consideration these days.  In addition, animated titles are especially popular with the international market in that they can use local voices for the characters.  Films like "Rio 2", "Ice Age: Continental Drift" and "The Croods" all over-perform internationally, largely for this reason.

Rio Imax

5)  3D/Imax.  Think Imax is big in the States?  The company's growth these days is primarily overseas.   "IMAX invested in China many years ago and it has been a win/win relationship", Imax CEO of Entertainment Greg Foster told me today.  "Our brand is quite popular there, as demonstrated by our strong per screen averages and the record setting performance of "Transformers 4" this summer.  Chinese moviegoers, exhibitors and filmmakers seek out the IMAX format, which has propelled our network growth so that China is now our second largest market".   In addition, 3D accounts for a higher percentage of box office take than it does here in the U.S.   Those sky-is-falling 3D articles tend to look at the sagging percentage of 3D revenues here in North America, less so overseas.  

I'm fairly confident that as a territory, North America should still be able to maintain its lead over Slovenia and the Faroe Islands, but we've come to the point where we as an industry are no longer kidding ourselves that, contrary to an annoying Disneyland ride, it's not a small world after all.  Meanwhile, please pass me another samosa as I tally up last night's Uzbekistan grosses on "Transformers".   Gracias.

This article is related to: International Notes and News, Box Office, Imax, 3D


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