A tale of two Tinseltowns
...even though studios are selling more tickets in emerging markets like Russia and China, they are taking home less money for their hits. In America the big studios keep around half of box-office receipts. In China Hollywood studios keep only a quarter. Moreover, no more than 34 foreign films may be released in China each year. (Last year, the big six studios released 134 films in total.) These countries also generate puny home-entertainment revenues, and this will not change for years. To compete with pirates in Russia one studio starts selling DVDs only a month after a movie’s release.
Squeezed between rising costs and falling revenues, the big studios have responded by trying to make more films they think will be hits: usually sequels, prequels, or anything featuring characters with name recognition. But, as William Goldman, a script writer, once wrote, “nobody knows anything”—ie, hits can’t be predicted. Independent filmmakers can still make money on surprise hits but these have limited markets abroad: American dramas and comedies tend not to perform as well overseas as cartoon and action flicks.
