As Hollywood studios begin to crumble, a new breed of media company that is rooted in its local market but has an eye for the smart international deals is rising.
The concept of a movie studio has to date been clearly associated with Hollywood. Even as these companies grew into vertical giants over the last 30 years encompassing television networks, music groups and theme-park businesses, the notion of a studio which could develop, produce and distribute films through any number of platforms has been at the centre of the picture.
As Hollywood’s overhead-heavy companies start to struggle, a new breed of international studio is emerging that could revolutionise the business
But as Hollywood’s overhead-heavy companies start to struggle, a new breed of international studio is emerging that could revolutionise the business.
Well-capitalised companies such as EuropaCorp and StudioCanal in France, CJ Entertainment in South Korea and Huayi Brothers and Bona International Film Group in China all have ambitious and fast-growing initiatives based on producing and exploiting movies in home markets first and interacting with the US industry on their own terms.
The three territories have one thing in common - a big local appetite for homegrown films. You need only look at Screen’s box-office charts to see that in all three markets, local blockbusters are routinely outperforming US fare. In just 10 years, the publicly traded EuropaCorp has proved it can make both local hits and international ones, distribute them in France and cut smart distribution deals for them overseas.
By maintaining strong ties with Hollywood studios, films such as Taken and the Transporter series have delivered impressive numbers in North America. But the company’s French films have also hit the mark, some - such as Luc Besson’s Arthur franchise and Tell No One - achieving great success at home and overseas. As Europa chairman Pierre-Ange Le Pogam will tell you, the company is French first and foremost and its 2010 slate is full of ambitious, expensive French-language titles.
StudioCanal has distribution companies active in France, the UK and Germany and, while it has strong production ties to Hollywood, it is also instituting local production programmes.
Korean giant CJ is a vertically integrated studio of enormous clout which was an initial investor in DreamWorks and this week unveiled a three-year development deal with Chris Columbus’ 1492 Pictures.
But its strength is rooted in its local hits and it has grand plans to expand its reach all over Asia.
The Chinese companies are already pan-Asian players by dint of being powerhouses in the dramatically expanding Chinese film market. Huayi Brothers is about to become the first entertainment company to be listed on the Shenzen Stock Exchange; Bona is a fully integrated company which has over 20% market share at the Chinese box office. Bona’s COO Jeffrey Chan said last week during the American Film Market that the Chinese market is set to grow exponentially in the next decade - and it’s already worth $800m a year. Driven by mainland China, big-budget Asian movies can now recoup out of Asia alone.
Imagenation Abu Dhabi is not far behind. Although the Gulf States don’t have the kind of local market that could create blockbuster numbers like China, France or South Korea, the deep-pocketed company has rapidly built an infrastructure and partnerships for generating US and international films - and exploiting them.
Hollywood, of course, will never lose its cachet.
And its studios have unique global distribution organisations that few would dare replicate. But this new breed of international media group is set to shift the emphasis in the next decade or two. As EuropaCorp proved with Taken, a commercial Hollywood-style smash can be made, owned and controlled from Paris by a French company.