(T)Raumschiff Surprise–Period 1
I’ve just returned from two weeks in Egypt, and on the ten-hour flight from Cairo to New York, I had plenty of time to absorb the contents of the February 24-25 edition of the International Herald Tribune. One of its articles, “Hollywood rides off into the setting sun,” proclaimed the imminent decline of Hollywood.
The co-authors of this article are Nathan Gardels, editor of NPQ and Global Viewpoint, and Michael Medavoy, CEO of Phoenix Pictures and producer of, among many others, Miss Potter. These two are, according to the biographical blurb accompanying the article, writing “a book about the role of Hollywood in the rise and fall of America’s image in the world.”
The Tribune piece is a slightly abridged version of an essay that appeared on The Huffington Post on February 21, 2007 under the title “Hearts and Minds vs. Shock and Awe at the Oscars.”  The subject is not really the Oscars, though, but the supposed decline in interest in American blockbusters, both in the USA and abroad. The authors make a series of claims to suggest that Hollywood is about to lose its “century-long” status as the center of world filmmaking. (Actually American films didn’t gain dominance on world markets until early 1915, but that’s a quibble in the face of the other shaky claims made here.)
1. Foreign films are getting all the awards and prestige this year. “Films by foreigners such as ‘Babel,’ ‘The Queen’ and ‘Volver’ that make little at the box office are winning the top awards while the big Hollywood blockbusters, which make all the money, much of it abroad, are being virtually ignored.” Gardels and Medavoy point out that even veteran director Clint Eastwood figured prominently in the nominations by making a Japanese-language film.
Several objections can be made to this. Technically The Queen is foreign, but it’s not foreign-language. Besides, British films have figured in the Oscars since Charles Laughton won as Best Actor by playing a king in The Private Life of Henry VIII back in 1933. Let’s factor out British films, shall we?
Of course Gardels and Medavoy couldn’t know this when they wrote the piece, but none of those “foreign” films won. An American genre film did. A much-respected Hollywood director finally got an Oscar as best director. He remade a Hong Kong film, secure in the knowledge that most Americans won’t watch a foreign-language import like Infernal Affairs.
Plenty of non-foreign films get awards and prestige. There have been years—like 2005—when most of the best-picture nominees were English-language art-house films like Crash and Brokeback Mountain. If The Departed hadn’t been crowned Best Picture this year, one other good contender would have been Little Miss Sunshine. Think back over how many indies have won Best Picture in the last decade or so. The English Patient and Chicago (both Miramax) come to mind. (Gardels and Medavoy never make mention of independent American films, since their argument presumes that non-formulaic films come only from abroad.)
2. Foreign films show “the world in transition as we are living it.” That is, they reflect the real world and hence are more admired and more admirable. In contrast most “American filmmakers too often grind out formulaic, shock and awe blockbusters.”
Again, there are plenty of American films that don’t fall into the “blockbuster” category. Directors like Quentin Tarantino, David Lynch, Tim Burton, the Coen Brothers, and Christopher Nolan are admired internationally for their unconventional films. Conversely, most films made in foreign countries are no less formulaic than ours. Other countries’ popular comedies, crime films, and horror pics are almost never imported into the USA.
3. Hollywood’s blockbusters “may be winning the battle of Monday morning grosses, but are losing the war for hearts and minds.”
Whose hearts and minds are the authors talking about? Doesn’t a film win hearts and minds by drawing people into theaters? So if blockbusters are popular, aren’t they, at least in some sense, winning hearts and minds? Obtaining Oscar nominations means these films have won the Academy members’ hearts and minds, or in the case of the many critics’ awards, the hearts and minds of journalists.
4. “Audience trends for American blockbusters are beginning to show a decline as well, both at home and abroad.” According to Gardels and Medavoy, the fact that films now gross more abroad than at home suggests that the American public is tired of these big pictures.
This claim is self-contradictory. If blockbusters make more in foreign countries than in the USA, then there would not appear to be evidence for a decline of audiences for such film abroad—unless, of course, there has been an overall decline in box-office income worldwide. That’s not true. In the past four years, two films, The Lord of the Rings: The Return of the King and Pirates of the Caribbean: Dead Man’s Chest, have made over a billion dollars each internationally. They now stand at, respectively, second and third on the all-time box-office chart (in unadjusted dollars).
Even if we assume that just Americans are getting tired of their own formulaic films, the authors’ argument doesn’t work. They lump Titanic, Jurassic Park, and Star Wars Episode I—The Phantom Menace together with Mission Impossible III and Poseidon as having earned large percentages of their worldwide box-office income outside the USA. Clearly, though, the cases are not comparable. The first three were enormously successful in the USA as well as abroad. Similarly, The Lord of the Rings and the Harry Potter series have brought in around two-thirds of their income outside the US, but one would hardly claim that Americans didn’t like them. The Da Vinci Code brought in over 71% of its total gross abroad but in 2006 it was also the fifth highest-grossing film in the American market.
The authors have chosen two films, Mission: Impossible III and Poseidon, to support their case. Yet in general big action films that perform poorly or even flop in the American market tend to do better in foreign countries, especially if they have auteur directors and big stars. Other examples of recent years have been Oliver Stone’s Alexander and Ridley Scott’s Kingdom of Heaven. Indeed, the importance of stars in selling Hollywood films can hardly be overemphasized. For instance, Tom Cruise is enormously popular in Japan, where Mission: Impossible III grossed $44 million of its $398 million worldwide income. There are few comparable international stars working in foreign-language films.
The rising proportion of receipts abroad results largely from reasons other than any putative decline in the popularity of American cinema. For one thing, rising prosperity in developing countries has made movie-going more affordable, and hence there are more movie-goers. The fall of Communism and the new profit orientation in China have opened large new markets for American films. Most crucially, a huge boom in the construction of multiplexes in South America, Europe, and much of Asia during the 1990s and early 2000s raised the number and cost of tickets sold outside the US. It isn’t the American market that has shrunk. It’s the foreign market that has expanded.
Moreover, comparisons between the total box-office income of films within the American market and in foreign ones are often misleading due to currency fluctuations. The recent weakness of the American dollar against many other currencies has made it considerably easier for those in other countries to see Hollywood’s products. Theatrical income does not necessarily reflect the number of tickets sold or the price of those tickets in local currencies. Hence raw statistics may not accurately indicate the actual popularity of any given title.
5. Countries increasingly are favoring their domestically produced films. “Even long-time American cultural colonies like Japan and Germany are beginning to turn to the home screen.”
This isn’t a new and consistent trend. Some countries have been doing quite well in their own markets for years, partly due to government subsidies for the film industry. France is one such market. Germany had a good year in 2006, but 2005 was a bad one. Many such successes are cyclical. Recently films made in Denmark and South Korea have gained remarkable portions of their domestic film markets, and if they decline, other countries will take their places for a period of relative prosperity.
We should also keep in mind that some countries have exhibition quotas for domestic films. South Korea , which provides government subsidies for filmmaking, in recent years has also required that 40% of exhibition days be given over to domestic films. That quota was halved to 20% last July 1, with filmmakers fearing a surge in competition from Hollywood. In fact September saw the Korean share of the domestic market rise to 83%, but this was largely due to two big hits: The Host and Tazza: The High Rollers. Such success can be ephemeral, however, and the government has recently imposed a tax on movie tickets designed to generate a fund for supporting local filmmaking. Variety’s Asian branch  has recently predicted a slump in South Korea for 2007.
Moreover, German or Danish films doing well in their own markets doesn’t mean that they’re beating Hollywood at its own game. American films are truly international products, and blockbusters play in most foreign markets. A non-English-language market like Denmark may produce films that gain considerable screen time at home, but they do not circulate outside the country on nearly the scale of the American product.
Take, for example, the most successful German filmmaker of recent years, actor-director Michael “Bully” Herbig (on the left in the frame above). Within Germany his wildly popular comedy Der Schuh des Manitu (2001) sold almost as many tickets as Harry Potter and the Sorcerer’s Stone, and his over-the-top gay Star Trek parody (T)Raumschiff Surprise—Period 1 (2004) grossed more than twice as much as Spider-Man 2. Most people outside of Germany have never heard of him or his films. There are comic stars like him in many countries. In general popular local comedies—many of them as formulaic as any Hollywood product—don’t travel well.
[Added March 9:
More evidence for my claims that successful foreign-language films often don’t circulate widely outside their countries of origin comes in the February 23 issue of Screen International. In an essay entitled “Calling on the Neighbours,” Michael Gubbins discusses new funding that the European Union is putting into film specifically to promote the wider distribution of films. “The performance of European films outside their home markets remains one of the thorniest issues for the EU’s policy-makers,” Gubbins writes. “Last year’s box-office recovery in many European territories was largely built on the success of local films in local markets and a number of Hollywood blockbusters.”
In 1995, production within Europe totaled 600 films, and it rose to 800 films in 2005. Yet “that rise in production has not been matched by admissions, which have fluctuated strongly over the late five years. There has been little to suggest that increased production has helped European films travel beyond their borders.”]
6. The competition from increasingly successful national cinemas “suggests that we may be seeing the beginning of the end of the century-long honeymoon of Hollywood, at least in its American incarnation, with the world.”
I don’t know what the authors mean by “Hollywood, at least in its American incarnation.” Has Hollywood existed elsewhere?
Actually, I think that Hollywood may well be in decline, at least as a center for filmmaking in the sense of planning, shooting, and post-producing a movie. That isn’t happening, however, for the reasons that Gardels and Medavoy offer in their article.
One factor is the globalization of film financing. Many films these days are co-productions between companies in different countries. It’s sometimes hard to determine the nationality of a film, given its several participants. The English language, however, remains central to most internationally successful films, and that is unlikely to change any time soon. The most popular stars still tend to come from English-speaking countries or to be able to speak English well, as actors like Juliette Binoche and Penélope Cruz can.
Another factor in globalization is the increasing tendency to make American-based productions partly or entirely abroad. Off-shore production has actually been fairly common since World War II. In the post-war austerity, many countries restricted how much currency could be taken out, and Hollywood firms spent their income by covering the production costs of films made abroad.
Even with the easing of such restrictions, the trend continued. The most traditional modern reason is simply cost-cutting through inexpensive labor and other expenses—advantages that have long been found in Eastern European countries. More recently countries have seen the economic advantages of an environmentally friendly enterprise like filmmaking. More and more of them have put various tax and other financial benefits into place in an effort to be competitive in the search for off-shore productions. For example, the February 2-8, 2007 issue of Screen International contains an ad placed by the Puerto Rico Film Commission (p. 40) declaring that “Puerto Rico is Ready for Action” and offering a remarkable 40% rebate on local expenditures. It also touts the country’s “experienced bilingual local crews” and its “infrastructure.”
One important cause for the off-shore trend that I deal with in The Frodo Franchise is the fact that technological change now offers the possibility of making films entirely abroad, from planning to post-production. Ten years ago it would have been almost unthinkable to have sophisticated special effects created by anyone other than the big American specialty firms like Rhythm and Hues or Industrial Light & Magic. Now world-class digital effects houses are springing up around the globe, and one of the top firms, Weta Digital, is located in a small suburb of Wellington, New Zealand. When a huge, complex production like The Lord of the Rings can be almost entirely made in a country with a miniscule production history, there is far less reason for American producers to confine any phase of their projects to the traditional capital of filmmaking.
There may indeed be an ongoing decline in Hollywood’s importance in world cinema, but it isn’t happening quickly. For one thing, there is no reason to think that US firms will soon cease to be the main sources of financing and organization of filmmaking. Even if Hollywood stopped making films and just distributed the most popular ones from abroad and from American indies, it would remain the most important locale for the film industry. As anyone who studies or works in that industry knows, distribution is the financial core of the whole process.
Finally, we shouldn’t forget that since early in the history of the cinema the USA has been far and away the largest exhibition market for films. No other single country can match it, and Europe’s attempts to create a united multi-national market to rival it have so far made slow progress. With such a firm basis, the Hollywood industry can simply afford to spend more on its films than can firms in most countries. Expensive production values help create movies that have international appeal, in part precisely because they are blockbusters of a type that are rarely made anywhere else.
In the international cinema, “shock and awe” and “hearts and minds” aren’t always as far apart as we might think.
Gardels and Medavoy’s analysis of Hollywood vs. foreign films falls into a common pattern within journalistic writing on entertainment. As soon as some trend or apparent trend is spotted, the commentator turns to the content of the films to explain the change. If foreign or indie films dominate the awards season, it must be because blockbusters have finally outworn their welcome. If foreign or indie films decline, it must be because audiences want to retreat from reality into fantasy. It’s an easy way to generate copy that sounds like it’s saying something and will be easily comprehensible to the general reader.
Such explanations depend on considerable generalizations that are usually made without taking into account the context of industry circumstances. Fluctuations like currency rates, tax loopholes, genre cycles, quotas, labor-union agreements, and similar factors interact in complex ways. All these are really difficult to keep track of and analyze, and most writers don’t bother, even though that would seem to be part of their job.
Almost inevitably commentators also fail to note that films typically take a very long time to get from conception to screen. Most releases of today actually reflect trends that were happening a few years ago. The world film industry is just too cumbersome to turn on a dime, or even on a few billion dollars.