These are dynamic times for Hollywood's overseas business. The studios' international infrastructure is evolving to accommodate a trend that has been around for years and is poised to explode.
By the end of 2007, local-language releases such as The Orphanage (El Orfanato) in Spain, Saawariya in India and Dororo in Japan will each figure among the biggest success stories of the past 12 months in their native territories.
In each case, a major studio has played an integral part in the production process. As Warner Bros' enduring relationship with Village Roadshow in Australia and Universal's association with the UK's Working Title show, Hollywood realised the potential benefits of local-language partnerships decades ago.
'The international marketplace is still growing whereas it's clearly stabilised in North America, so from Universal's perspective we're uniquely placed to benefit from this new opportunity,' says Universal Pictures co-president David Linde.
Earlier this year, Universal installed Christian Grass as head of its 'international studio' Universal Pictures International.
It also announced a formal pact with Timur Bekmambetov and his Moscow-based Bazelevs Productions to augment the alliance with Fernando Meirelles' O2 Filmes in Brazil and the longstanding ties with Working Title and Bill Kong in China and Hong Kong.
The ground-breaking $100m five-film deal with cha cha cha partners Guillermo del Toro, Alfonso Cuaron and Alejandro Gonzalez Inarritu in Mexico is further proof of the studio's designs in foreign production.
'We've invested a lot of money in creating labels that have a defined presence with local film-makers like Working Title and Focus Features,' says Linde.
The whole point of cha cha cha and the deals with Fernando and Timur is to invest in companies that have the capability to develop and produce multiple titles every year, as opposed to working with two or three partners in each region.
Universal is now exploring partnerships in Germany, Spain, Japan and India.
Under the guidance of Columbia TriStar Motion Picture Group vice chairman Gareth Wigan and president of international motion picture production Deborah Schindler, Sony's International Motion Picture Production Department presides over an extensive network of global ties from Columbia Pictures Film Production Asia to upcoming ventures in Germany and Russia.
The company is preparing a mid-April 2008 release on Issa Lopez's comedy Casi Divas, the second film from Columbia Pictures Producciones Mexico after this year's hit Ninas Mal (the seventh biggest film release in Mexico), and plans to make films with Matthew Vaughn and Kris Thykier's Marv Films in the UK. The recent smash Saawariya bodes well for plans to develop ties in India.
'Whether we partner with people on the ground or do it on our own, we believe in each territory and never want to homogenise product,' Schindler says. 'The mandate is to make local product with local people and talent in each territory.'
Wigan adds: 'Budget ceilings are determined the same way they are here - we're looking at what the traffic can bear. If we make a movie in a territory, it has to make back its money in that territory.'
India and Russia are on Walt Disney Studios Motion Pictures International's (Wdsmpi) radar and the studio is preparing to release the Hindi film Roadside Romeo next year, one of several animated films in the pipeline through its partnership with Mumbai-based Yash Raj Films.
Wdsmpi is gearing up on its first Russian co-productions and enjoyed solid results this year for The Magic Gourd in China ($2.5m), Brazilian foreign-language Oscar submission The Year My Parents Went On Vacation ($1.5m) and Cansada De Besar Sapos in Mexico ($6.1m), among others.
'It's important to export the Disney brand,' says Wdsmpi executive vice-president and general manager Larry Kaplan. 'We're obviously interested in economic results but we're also interested in showing people the magic Disney brings to film.'
Warner Bros' vast experience with local-language co-productions helped Spain's The Orphanage become the biggest Spanish-language release in the territory.
JA Bayona's supernatural drama cost approximately $4m and has grossed more than $33m so far, which demonstrates the potential profitability of local-language partnerships.
'The budgets of the films we will do in these countries are basically in line with the range that is appropriate for those films,' says Richard Fox, Warner Bros Entertainment's executive vice-president of international.
'We look at each country on its own merits and do whatever is good for that country. If we have a film like The Orphanage or A Very Long Engagement that will travel, we go for it. But that's not the primary reason we will go into production.'
Warner Bros is moving into co-production in Russia and has lined up four productions in India for 2008. It is active in France, Germany, Italy, Spain, Netherlands, Brazil, Mexico, Japan and China.
Following the success of releases such as the Spanish-language Alatriste in 2006, Fox International has spent much of this year consolidating and developing its production partnerships.
'With the continued growth in market share of local films and the improvement in the quality of local production, it's clear the production of local-language films will be an important business for us,' say co-presidents Tomas Jegeus and Paul Hanneman.
Fox releases in 2008 will include Krabat in Germany, the O2 co-production Blindness from Fernando Meirelles, and the epic co-production Arrancame La Vida with Mexico's Altavista.
'We will be making very exciting and groundbreaking announcements in the coming months. It's clear there's been no first mover advantage in local film production by the studios. We don't need to be first. Just the best,' says Jegeus.