onhanks to the impact of rising international box office numbers, the importance of opening weekend in the U.S. as a predictor of a film’s economic success is waning.
In fact, international revenue can turn a domestic disappointment into a hit—and even lead to franchise-building sequels. This game-changing international revenue growth is having an impact on when and where films open and is even dictating content decisions.
The Rise of the Foreign Box Office
How important is international box office to Hollywood studios? In 2016 international box office accounted for 62 percent of box office revenue for the big six Hollywood studios. That’s up from 42.9 percent in 2001, according to data from Stephen Follows, a film industry data researcher.
The international ratios (particularly for action films) can be stunning. With 2017 films such as The Fate of the Furious earning more than 81 percent of its box office from international markets, and XXX: The Return of Xander Cage racking up 87 percent of its box office internationally, it’s no wonder that moviemakers are giving more weight to markets beyond North America.
For XXX, international success followed a softer-than-desired US opening weekend ($20 million on a production budget of $85 million according to Box Office Mojo), a trend that’s growing for movies in the action genre.
“Things have changed over the years,” says Vince Totino, CEO of Revolution Studios, which co-produced XXX. “Now that you’re likely to have a large international number, the domestic opening weekend is really only an emotional thing. It’s not necessarily an indicator of the profitability of a picture. It’s an emotional loss if (the film doesn’t do well domestically), but your movie can over-perform in international markets and really save your picture from a big loss. Whereas the opening weekend was once a harbinger of what was to come, now’s it’s really just an emotional thing. Obviously it helps when it does better, but when it doesn’t do well it doesn’t mean your movie has failed commercially.”
This isn’t to say that producers still aren’t losing sleep thinking about opening weekends. Opening weekend still matters. It is more a matter of how much opening weekends matter in the context of the global picture.
“I wouldn’t say that opening weekend is no longer important,” says Daniel Loria, vice president of content strategy and editorial director for Boxoffice Media. “I would say that it’s complemented by an international strategy that can be market or region specific that can help push a film to its maximum potential. The metrics of success have changed. Opening weekend box office is still extremely important, but it’s not the full picture.”
Just how big is that big picture? In 2017, The Fate of the Furious earned more than $1 billion internationally (compared to $225 million in the U.S.), according to Box Office Mojo.
“Before the international markets came in, you could imagine the Fast and Furious franchise ending up in the bin of death at a Walgreen’s somewhere,” says Loria. “It really was with the support of the international market where it became synonymous with Universal. It’s now one of their biggest properties.”
Loria notes that international impact has less of an influence on films designed to appeal more to the domestic market—for example talky comedies or prestige films that may not translate well. Typically, action, animated and broader comedies do better in international markets because their less-nuanced themes are more universal. Think Transformers, not Lady Bird.
The Elephant in the Room
Driving this international trend is China’s burgeoning box office. In 2016 China’s box office revenue was $6.6 billion, followed by Japan at $2 billion, and India at $1.9 billion, according to the MPAA. In comparison the U.S./Canada box office was $11.4 billion.
To get a sense of the growth of the Chinese market, consider that the total cinema attendance in China increased from .2 billion in 2009 to 1.4 billion in 2016, according to Oxford Economics, National Bureau of Statistics of China. China’s box office take in 2009 was $910 million, while there are predictions for 2017 of north of $8 billion.
“The growth in international box office is coming principally from China, and in the next couple of years the box office in China will surpass North America,” says David U. Lee, founder and CEO of Leeding Media, an international film and television company.
“A lot of films that aren’t opening well in the U.S. are counting on China to make up for the shortfall,” says Lee.
U.S. moviemakers are taking notice.
Going forward “you may see studios releasing in the Chinese market first because it may do well there and help the domestic performance here because people may see a film’s success in China and think the film is worth seeing here and that’ll give the film more of a chance,” says Totino.
The 007 Effect
Recognizing the importance of the global market, filmmakers are building movies for the world stage, following what Loria calls the “James Bond model.”
“You have international locales, a diverse soundtrack, a diverse cast,” says Loria. It’s a way to include “a lot of mini narratives on a marketing level where international markets can hook into.”
XXX is a poster child for the James Bond model, with a diverse cast in key roles—Donnie Yen (China) and Deepika Padukone (India); exotic locales—Vin Diesel skiing down a verdant mountain in the rain forest; and even a cameo by international soccer player Neymar. Quite simply, the movie was designed from the ground up to play well internationally.
Totino does note that it’s not a simple matter of just plugging international actors into a U.S. film to achieve international success.
He says, “XXX has elements that other parts of the world will (see and) say, ‘Wait a minute, this movie’s made for me, and I want to go see it.’ The international market likes when a movie is made in their country, with stars from their country, not just sticking a star in the movie and filming in the U.S. It works best when the international stars are an organic part of the movie and not just replacing U.S. actors.”
Even the Star Wars franchise is adapting.
“Look at Star Wars. None of the first six films were released theatrically in China,” says Lee. “So when The Force Awakens was released here, even though it’s the largest movie franchise ever, it didn’t overtake The Fast and the Furious or Transformer films in China. For Rogue One, two Chinese actors were cast in prominent roles. That’s not a mistake.”
The Opening Dating Game
Globalization is changing more than just content. It’s changing strategic decisions for when and how films open. In fact, international concerns may dictate that a major Hollywood film may open internationally before opening in the U.S.
Loria explains that distributors are looking at the global picture when planning release dates. He says distributors are asking, “Where can they grow a title? What are the international corridors?”
He points to Pixar’s Coco as a film that was strategically opened internationally before coming to the U.S.
“Coco was the highest-grossing movie ever in Mexico before it was even released in the U.S.,” Loria says. “They used the corridor of the Day of the Dead in Mexico, a big market for Pixar and for this film in particular. They released it in Mexico, and it became a big hit there. Then they put it in on the shelf and released it in the U.S. for the Thanksgiving holiday. There’s no longer a rule now to open in the U.S. in order to establish your global rep. It makes all the sense in the world to open Coco in Mexico on Day of the Dead weekend.”
The international market is likely to continue to be the driving force behind some of Hollywood’s biggest hits.
“More movies will be made in the XXX model, with international casts and locations,” says Totino. “XXX was an interesting movie because it was designed for the international market because we knew that’s where most of our business would be. This type of movie, the action genre, we knew would play well internationally. What you’ve seen the last several years is that movies like that will do double internationally what they do in the U.S. The international market place is such an important part of the revenue of a film of that type.”
As evidence of the importance of the international market, XXX’s success in China may be leading to a sequel co-produced by a Chinese company.
“The Chinese market is the one that wants the sequel,” he says. “The market has changed so much. You have to make movies for a worldwide market.”
The bottom line is that globalization is paying dividends for U.S. filmmakers and shaping how films are made and distributed. MM
Featured Image Photograph Courtesy of Pixar. This article appears in MovieMaker’s 25th Anniversary Winter 2018 issue.