1. INTERNATIONAL BOX OFFICE TRENDS – HOPE FOR INDIE FILMS?
I’m excited about my first post, so let me get right to it: I took a look at worldwide box-office grosses by territory and hoped to see some patterns over the past decade. And indeed there were some interesting ones! Perhaps they are obvious to industry insiders, but it was very interesting (for me, at least) to see them clearly plotted. I think it really gives the claim that “the US film market is saturated” the extra visual oomph it needed.
Here is what came out of the machine (click on the image to actually see something):
Figure 1: Territory percentage of total worldwide box-office grosses: 2002-2011
These graphs were made based on publicly available data: I based them on the worldwide box-office grosses of the top 12 blockbusters for each year – broken down by territory. Perhaps a larger dataset would be more academically rigorous, but hey – “quick and dirty” is the name of the game in this blog.
Notice the steady decline in English speaking territories and the US in particular, as well as the stagnation in the Western European markets. Compare that to the growth in Asian markets (despite the crash of the Japanese market), and China in particular. Eastern Europe is also an awakening territory, as is Latin America (led by Brazil), which more than doubled its share over the past decade. The Middle East is also starting to show signs of substantial box-office presence.
One explanation for these trends is saturation of the developed film markets. Another is the general rapid economic growth of the developing markets. We can conduct that debate sometime, but the bottom line is that with the US market shifting more and more towards massive tent-pole studio productions, the best chance for indie films to survive is by targeting international markets.
The large-budgeted monsters are hogging an increasing portion of the 150-200 annual nationwide release slots in the US. But the growing international territories mentioned above still have demand for Cinematic entertainment with only partial fulfillment. They have not yet been swamped by Iron Man and his pals. Just like in high-tech, this is where the small players’ agility can finally triumph over the sluggish giants. The blockbusters are starting to discover these markets, which is what these graphs show – but there is still plenty of meat to go around, if the small players move quickly.
“Looper” was a great example of such an effort, spearheaded by Endgame Entertainment that teamed up with DMG to tailor their movie into the definition of a Chinese co-production, allowing it to tap into that market. It ended up grossing over $20M there. This may not seem like a huge number, but it is. And the precedent it set is important: the small guys can still pull off a few tricks. While the big players are becoming more and more entangled in the logistics of their massive mega productions, they have no time to deal with this sort of innovation. They are starting to realize this and they will get there eventually, but there is a window of opportunity for independent film to slide into.
This theory has many caveats, of course: do developing markets even want movies that are not blockbusters? Can a movie succeed in foreign markets without relying on buzz of success in the US? Can small production companies deal with the blood-red legal waters of distribution in some of these markets? I believe the answers to these and other questions are yes. But I’m always an optimist when it comes to entrepreneurship. What do you think?
And now, just a couple of side notes (you don’t really have to read this):
- I chose the 12 biggest blockbusters, because they had the most comprehensive data on overseas grosses. Of course, smaller movies might have different trends, but that is a topic for a different and more complex analysis, which I will leave for another time.
- I assume boxofficemojo does not adjust for inflation or currency conversion fluctuation, but the trends are there.