The International Film Industry:

Hollywood vs. Europe

The current film industry is no longer the art form is was once known as, especially in the United States. Hollywood has taken the cinema by the throat and turned it into a multi-billion dollar industry, with huge economical and cultural implications. The bottom line for this or any other business is money. With this in mind the Major U.S. film producers will strive to sell their product to as many people as possible.

The contemporary international film industry is currently ruled by Hollywood. With the ever expanding global box office the power of Hollywood seems to be getting stronger and stronger. It is speculated that the number of movie screens overseas will rise sharply as multiplexes are built in movie hungry nations (Washington Post, 1998). Since Hollywood took the helm over the French, the popularity of U.S. films has grown internationally. Along with this cultural popularity comes animosity from the policy makers of foreign countries.

In any examination of the international film industry the main focus is the United States' cinema powerhouse, Hollywood. Our paper will discuss Hollywood's rise to the top of the international market. Furthermore it will illustrate the relationships between Hollywood and the major European players, Britain, France and Germany. Finally, it will explore the current state of the contemporary international film industry.

Hollywood's International Market

The great thing about making films is that almost the entire cost is put forth to make the first copy. Duplicate copies have little additional investment. Because export prints take nothing from the home market, at the same time giving the producer a larger base on which to recover his investment, it is interesting to see that film has become a major commodity in international trade. Hollywood exports films because high production costs make it harder to recover investments in America alone.

Effect of World War II

World War I had a great effect on Hollywood, as far as the global market goes. The war redirected the international flow of capital. Surpluses in Europe were spent in the war, and American capital war loans and goods were sent abroad. “In 1913, the last pre-war year, some thirty two million feet of motion picture were exported from America; ten years later the amount had more than quadrupled, and by 1925 the number stood at 235 million feet. This was an increase five fold to European countries, and ten fold to the rest of the world” (Balio, 1976).

The Americans wanted to focus the export of film toward the Europeans, because they generated about 65% of the revenue made abroad. By the year 1925 nearly one third of all revenue came from the United Kingdom, where American films had 95% of the market. During the same period in France, 77% of the films shown came from the United States, and the number was about 66% in Italy (Balio, 1976). The quality of foreign film was not the factor. Hollywood thought so highly of foreign films that it brought directors and stars to America and freely borrowed European production techniques. Although this is true, it is not standard procedure. Robert Ashford, Operations and Administrative Assistant to the Toronto International Film Festival, said “...there are only a few cases where the U.S. film industry has sought out foreign film makers. U.S. film makers have a large enough monetary base, and a strong sense of sales. Therefore they do not find it necessary to co-produce with other countries, but there does seem to be a sense that it is on the rise. By associating with international countries, they do get to decrease the cost of film making by currency rates. Government grants within co-producing countries cut costs as well as tax breaks.”

The selling of film overseas made American distribution around the world possible, and the American film industry has never looked back. In 1927 Sidney Kent general manager of Paramount said that a "foreign negative is shipped to London, and then to other countries, averaging a hundred and forty two prints, distributed among a hundred and fifteen foreign exchanges, serving seventy-three countries," and that "titles are translated from English into thirty seven different languages, In fifty-five countries." It was not just that trade seemed to follow the film, but that film was trade (Balio, 1976). Bankers, at this time finally saw the power of films and began to investing heavily in the film industry, thereby adding Wall Street's power to Hollywood's (Balio, 1976).

The most irritating thing to foreign film makers was the failure to achieve success in the American market. “In 1913 the United States imported sixteen million feet of motion pictures, by 1925 the amount had fallen to about to about seven million feet” (Balio, 1976). Foreign producers were denied access, the United States had become a closed market. “Vertical integration and horizontal cooperation assuring that theaters would show products of the major Hollywood companies first, and independent films second. Until the early 1950's foreign film remained unknown to most of America” (Balio, 1976).

Rise of Foreign Films in the U.S.

As the 50's came Hollywood encouraged a demand for foreign films. Some people accounted for this by saying that many Americans found imports more interesting than Hollywood film, which were sexually conservative and avoided realistic social problems (Ogan,1990). Interest in foreign films has also been the changing audience for film. “Jack Valenti President of The Motion Picture Association of America, reported that by 1970 65 percent of the audience was twenty four or younger” (Ogan, 1990).

The rise in popularity of foreign films in the 50's and 60's has been attributed to a couple of different factors. The Supreme Court's decision in the 1948 Paramount case, which made it easier for foreign films to compete in the U.S. The end of block booking and the divorcing of exhibition from production and distribution meant that Hollywood no longer had a strangle hold on the market, and independent film distributors began to make agreements foreign film rentals (Ogan, 1990).

Decline of Foreign Films in the U.S.

The popularity of foreign films would not last long though. By 1967 the best years for the foreign film had pasted. Most of the foreign produced films come from the U.K. and other western European countries; few films come from the third world. The sex appeal of foreign films had dropped when the U.S. started making sexy films of their own. “When U.S. producers started turning out more sex films, some art houses, seeking a more dependable return on their investment choose these films over the imports, and others closed their doors” (Ogan, 1990).

Resistance to Hollywood

By the mid to late 1920's countries became concerned about American films becoming more popular, and dominant. Foreign film makers had two major reasons for their concern. The business aspect was their first concern. “American pictures preempted exhibition time and saw locally made films as greater financial risks” (Balio, 1976). This made the development of talent suffer also, there was less certainty that one could pursue a career in film alone. There was a concern about the money drawn by American films in foreign countries, amounts that some thought should remain at home as long as no reciprocal income was derived from America. Germany, hoped that restrictions on U.S. pictures would give its own pictures a greater chance for exhibition (Balio, 1976).

The second concern was on the cultural side. Film was considered to be used for information and persuasion, which presented certain traits and ideals while unintentionally glamorizing them at the same time. “The American film industry was being charged that American products were then actively 'Americanizing' England her, dominions and colonies, and all of Europe"(Balio, 1976) Germany was the first to do something about American pictures. In 1925 Germany introduced an act governing film imports. The act stated, distributors were issued a permit to release a foreign film each time they financed and distributed a German film. The U.K., France and Italy moved fast to follow Germany's example. In France a limit was placed on the number of film imports and in the U.K., and Italy quotas on exhibition required that certain amount of screen time be devoted to locally made films. “ In Italy the quota was set at a low ten percent, the British started at five percent but, in tens years the number climbed to twenty percent” (Balio, 1976). It was clear that these countries wanted to limit the exportation of American films into their countries.

British Cinema History

While looking at the film history of almost any country, one will find that the American film industry has a great influence on films all over the world. The history of the British cinema is no different. “ After some early success in the area of technology, the British cinema was confronted with a number problems: inadequate confidence in the industry, weak incentives for investments, and American hegemony after the war”(Landy, 1991).

“British entrepreneurs had not come to any standardized methods in the creation of equipment, nor was there any strict division of labor in the areas of production, distribution, and exhibition” (Landy, 1991). By the time it dawned on the British that they would need more capital and more rationalized modes of production, the Americans had swept the field. World war I helped the Americans in a massive way. While Britain and other European powers, had to divert financial and technological resources toward the war, Hollywood producers took advantage. The shortage of films and film equipment allowed the U.S. to move into the European market with their own products (Landy, 1991).

The Americans were able to make more films less expensively, and could distribute them at lower costs in foreign countries, by having recovered costs in their own large market. At the same time the vertical organization of the Americans was taking place. “This means that the Americans using some strategies such as block booking and blind booking, these methods allowed the Americans to consolidate their monopoly” (Landy, 1991).

The British eventually learned that the film industry was an international market and the United States had the power. The fact that the Americans and the British had the same language, did not help the British at all. The British cinema lost it's confidence, it was unable to sell in America, and could not compete with the American industry (Landy, 1991)

Don't Call It a Come Back

Then, the British film industry made a little come back . The invention of Sound would mean changes for the British film industry. Massive changes were made in equipment, personnel, and financing. With this change over, the cheap quota companies could not afford the expenses. “The early 1930's saw film turn into big business.” (Landy, 1991). World War II would also improve the quality of British films. There were a number of factors that made this possible: “American British cooperation, the demand for war time audiences for films, and the existence of an ideology of consensus and cooperation in the face of treats to the nation and to personal survival.” Robert Murphy cites the popularity of In Which We Serve (1942), which grossed 1.8 million in America and British films ranging from realist war dramas rivaled the top Hollywood pictures in popularity with British audiences” (Landy, 1991).

Even though the British cinema made some advances during World War II, Margaret Dickenson identifies three issues that have slowed the British cinema. "The dominant influence of America, the monopoly exercised by the major British interests, and the lack of a stable domestic production industry" (Landy, 1991). Even though the Second World War was good to the British, the 40's to the 60's saw some changes, the cinema was changed from “ a influential mass media, to a minority of entertainment and a side line of the leisure industry” (Landy, 1991).

French Cinema History

France and America's cinema feud dates all the way back to the early days of the industry itself. Since 1908, the French and Americans have battled about cultural implications of the international film industry. French cultural pride has resisted the influx of American films. Their only defense is to implement policies that limit the amount of American films that are shown in their country. France is now trying to persuade its neighbors to also set quotas on the amount of American cultural material allowed to enter Europe. All the while Hollywood and other American cultural industries are using their lobbying power to convince the U.S. government that these national policies are interfering with vital American interests (Grantham, 1998).

The two sides have never reached an acceptable solution in almost a decade. Policy makers on both sides frequently forget how long this debate has continued and reproduce the argument about every 20 years or so. They have also failed to take into account that maybe the policies themselves are the root of the problem (Grantham, 1998).

In the Beginning

France's international cinema history started with Lumiere brothers showing public demonstrations around the world of their chinematographe in 1895. Then came along George Melies. According to Grantham, Melies was “arguably the first important film director (1998).” He got his start doing street scenes and then moved on to filming stage illusions and conjuring tricks. He also did drama-documentaries, fairy and fantasy tales and even dabbled a little in adult films (Grantham, 1998). Melies and others like him, made France the creative and artistic leader of the early days of cinema.

They were also the leader of the industry. They had invented the modern studio system. The modern studio system is described as a vertically integrated global web of production and distribution offices that gained substantial money and market power (Grantham, 1998). The top of the ladder in France was the Pathe Freres company. They did everything from manufacturing film equipment to production and international distribution. By 1908 French films, led by Pathe, had up to 70 percent of the American market. The only problem was an emerging industrial attack concerning patents (Grantham, 1998).

The Movie Cartel

The camera and projection systems that the industrialists depended on had an intellectual property protection. Before a cinema could be started, an alliance had to be made with one of the competing industrialists. Then the only films that were allowed to be shown were from that industrialist system (Grantham, 1998). This in effect locked everyone else out. A group of U.S. patent holders combined their various patents and formed the Motion Picture Patents Company (MPPC).

The formation of the MPPC had an instant impact on the French movie business. The foreign share of short films in the U.S. market dropped by 25 percent in only two months (Grantham, 1998). Despite this, Pathe and another leading French producer were able to get MPPC licenses. Also, the MPPC was being shot down in the courts in patent and antitrust cases. These factors did not help the French movie industry though, by World War I foreign films made up only 15 percent of the American market (Grantham, 1998). Even though U.S. movie producers put up a big fight against French films, they are not the only ones at fault for the decline.

Other Contributing Factors

Bad strategic decisions on the part of the world leader, Pathe, were instrumental in the decline of French international cinema. The biggest mistake was the decision to stick with short films. The entire world was changing their format to full-length feature productions (Grantham, 1998). Also, the company itself was not run very well. The American subsidiary that Pathe had should have been able to help them during the lack of market access during the world war. Instead the American subsidiary failed in 1921, in which the management and stockholders took over control (Grantham, 1998).

Artistic and geographical factors contributed to the decline of the French cinema, too. French moviemakers began to change their style as compared to the American moviemakers. The American directors used a style modeled after the nineteenth-century novel with its linear storytelling methods (Grantham, 1998). The French, on the other hand, despised this method and used techniques that were less successful in world cinema. The next factor, geography, has to do with Europe and the First World War. The war was depleting the national economic resources of the nations involved. Simultaneously, France neglected its empire and the markets that sustained it (Grantham, 1998). The United States wasn't affected by this because they didn't enter the war for almost three years. The U.S. was stepping in and taking over markets, including cinema, that were abandoned by the warring nations. Subsequently, between 1918 and 1921 U.S. film exports grew by 300 percent (Grantham, 1998).

The combined factors of the MPPC, Pathe's mistakes, the separate stylistic path the French cinema took and the First World War completely ruined the film status France had in 1908. More than 60 percent of the films introduced to the French censor were from Hollywood by 1927. Meanwhile the local French market share was below 40 percent (Grantham, 1998).

The Quota System

The following year the French decided to try to change things. Edouard Herriot, French education minister, introduced a complex quota system on foreign films. To the French, the American cinema was a combination of economic and cultural aggression, and maybe rightly so. American films were not only an economic source, but related to audiences other American goods and the American way of life. Businesses in France and around the world were seeing demands for American styles and brands caused by exposure to American films (Grantham, 1998).

Despite the new quota system, the French cinema continued to decline. The number of French films presented to the censor was cut in half in 1929. In addition, the invention of sound with movies raised the French production level in the 1930's. Despite the higher production, the industry could not keep up with the demand for new movies and, in effect, many went out of business. The number of cinemas in France dropped by one-sixth between 1929 and 1937 (Grantham, 1998). On the other hand, the United States was able to tackle these problems and the French had to loosen its quota system two times in the 1930's.

French Cinema Reborn?

What seemed to be a turning point happened during the Second World War. During this time, the French cinema faired well because Hollywood movies were not being distributed overseas. It was short lived though, as the war came to end so did the good times for the French cinema (Grantham, 1998). During the war, many movies were being made and were waiting to be distributed to France. The French public had also been waiting for the return of their favorite American figures. In effect, the support system that aided the French cinema during the war broke down after liberation (Grantham, 1998).

The next blow to the French movie industry happened in 1946. In order to help themselves economically, France struck a deal with the U.S. that reopened the French market to Hollywood. Essentially they went back to the prewar quota system, with some new French modifications (Grantham, 1998). With this there was a increase in animosity towards the U.S. and Hollywood. The French people were accusing the U.S. of using dirty tricks to aid cultural imperialism. Even though Hollywood had lobbied for the reopening, they didn't seek to get rid of the local film makers. In fact the flood of Hollywood movies was over by 1948 (Grantham, 1998).

Germany After World War II

Germany, Like the British and the French suffered during the war. The German people for a while were dazed from the impact of the war, which to say the least was worse than most countries. The bombings in many of the cities were considered worse than the holocaust of Hiroshima and Nagasaki (Manvell, 1971). Those who came to live in the four zones controlled by the allied government were shocked as they moved along the paths of the bombed out cities. Germany was no longer a country, they had no constitution, no trust worthy institutions, and no system of law.

In 1948 the German economy began to lift with currency reforms in the western zones. "The Germans needed a cultural rebirth. The Germans needed a new cultural movement, a new press and a new educational system" (Manvell, 1971). Part of the immediate post war rehabilitation of Germany was to find expression in film. This proved to be a difficult task for Germany, considering the cinemas piles of ruble, sustained during the bombings. Before the war in Munich, there were eighty cinemas; in the after math there were less than ten cinemas in use. Berlin was an exception, where authorities quickly began to work together in promotion of entertainment in the cinema. In January of 1946 there were no less than 170 cinemas operating (Manvell, 1971).

Even with the hard ships, the Germans had put together a small come back. In 1947 the Germans completed seven films, 1948 saw the Germans make twenty-six films, by the middle of 1948 the Germans were in the process of producing seventy films. (Manvell, 1971)

For the Germans the period of social comment, self- examination, and self-pity was all but over. The rebuilding German film industry was not set for the box office. The talent, which had shown their strength during the three years of social adjustment were soon to be stopped, unless they turned in the direction of escape (Manvell, 1971)

The Decline of German Films

The currency reform of 1949, and the beginning of the West German economic reform of the 1950's was the first hit on German films. It was to be expected that the films dealing with the hard past would no longer attract audiences, as these days were occupied with hard work putting the country to rights and rebuilding industry (Manvell, 1971). The urge for self- examination was gone.

The industry was soon to become overstocked with box office films. The United States imported 211 films into the federal republic (Manvell, 1971). The tightening hand of authority assured that political and social austerity was the key characteristic of East German production. Few East German films made it to the screens in the west during the 50's. The period saw the end of interchange of talent between east and west Germany, which had not happened a lot in the 1940's.

The conditions in the West Germany were not good either. In the 1950's West Germany favored profit motive only (Manvell, 1971). After the currency reform, producers had to look directly to commercial distributors for financial backing, as there was a shortage of private capital. The industry centered under the Nazi's was fragmented under allied control, with 150 small companies with licenses to produce films. There was no shortage of actual film, West Germany was the fifth largest producer of films in the world, with 108 films in 1954, but the financial quality was just not there (Manvell, 1971).

The Contemporary American International Film Industry

The Americanization of many foreign countries has put the American film industry on top. The popular culture of America is a powerful influence across the globe shaping attitudes, trends and styles (Washington Post, 1998). The need for American entertainment helps steer the American culture, by only encouraging projects that will sell over seas.

Last year in the movie industry, American film makers took in 5.85 billion dollars at the foreign box office, and growth is estimated to climb at a rate of about six or seven percent annually (Washington Post, 1998). Helping this success is that the English language has a massive share of the market. American actors play a big part in the popularity of movies abroad. For example Leonardo DiCaprio's movie "Titanic" brought in 600 million in the states, which was a record, while earning 1.2 billion over seas (Washington Post, 1998).

The International Format

Some people might ask why the U.S. makes so many action films. The global market drives this. Films with big name action stars will be a big hit abroad. Some action movies such as "Armageddon" will spend money to get asteroid shots from Morocco (Washington Post, 1998). Also foreign distributors do not want to show movies that focus on African Americans or films that focus on women. Robert Ashford Operations and Administrative assistant for the Toronto International film festival, contacted by e-mail states: "The reason for this is that the African American man does not lead their life the same way that a black man would in the U.K., nor France or anywhere for that matter. They all have their own way of living, and that the content of a film with an African American cast, can't fully be grasped by Haitian in Paris, or a person of Aboriginal decent living in Australia, or a Trinidadian or Jamaican in London. Their way of living is quit different from that of an African American, thus the cross section just isn't there" (R. Ashford, personal communication, November 30, 1998).

The view on women in the movies is almost the same. Women in America may be seen differently than women abroad. A Female centered comedy in America may be really funny, but the same humor in Spain, or Australia may be different where men and women are thought of differently. "Unfortunately" said Andrew Vajna, the producer of Crimson Tide and Evita, "there are no black actors today that mean anything to the foreign market (Washington Post, 1998). The global market will not watch what they don't want to see. “Other movies that will do well in the international market are; Special effects movies that can be seen by children as well as adults, such as Jurassic Park, or Toy Story. Wide appeal love stories of epic variety e.g. Love Story, The English Patient, and Titanic (R. Ashland, personal communication, November 30, 1998)

Tom Gitlen sociology professor at New York University says: "American based studios are making stuff for the global market, and the stuff is dumbed down" (Washington Post, 1998) As far as the making of Friday The 13th ten different times, producers will keep making the movie as long as it sells, just like any other product.

Back to the Movie Stars

Even the stars that have burnt out in the states will sell movies over seas. These are B-grade stars that still have many fans over seas. Of course the A-grade stars will still have the same impact abroad as they always do. The Washington Post goes on to list the American stars with the most "star power." Tops on the list is Tom Cruise scoring a perfect 100, close behind is Harrison Ford, with a score of 99. Mel Gibson, Tom Hanks, and Brad Pitt are all not far off (Washington Post, 1998). Only two women were listed with great "star power", Jodie Foster and Julia Roberts.

The Hollywood Machine

Still what else makes American films so popular abroad? Robert Ashford gives four reasons. First, "American idealism and the "American dream", as well as the "Hollywood ideal." Movie buffs abroad still hold that America is the land of the plenty, and associate Hollywood with glamour writes R. Ashford. Second, he continues, "The industry still tries to produce films that will appeal to a cross section of audiences. Thus, the films will attract a large audience and reap in large box office benefits” (R. Ashford, personal communication, November 30, 1998). Third, The huge public relations machine that is Hollywood. The large amount of talk shows, and magazines that these companies have to establish interviews with their stars. The media outlet plays a big role in America. Ashford asserts, “For example, the U.K. or France only have a hand full of channels so, they can't hype up someone or something to the level that it can achieve with the `Hollywood Machine'” (personal communication, November 30, 1998). Finally, The fact that all the studios and distribution companies are linked together. “The acquisition of these companies by larger ones such as Miramax, now owned by Disney, and Newline owned by Time Warner, just adds to the power of the market: acquire and distribute” (R. Ashford, personal communication, November 30, 1998).

Conclusion

As shown in this paper the international film industry has had its ups and downs. Different countries fight for the right to show their films, in a very competitive world market. Those who suffer the slightest of set backs could be over powered. Usually it's the U.S. film industry that gains this power.

It is obvious that the movie industry is not to be taken lightly. Corporations like Disney, Universal Studios, and Time Warner have taken over. There is no longer room for the foreign film maker, they must play by the U.S. film makers' rules or get run over by the “Hollywood Machine.”

Bibliography

Balio, T. (1976) The American Film Industry. Madison, Wisconsin: University of Wisconsin Press.

Grantham, B. (1998) America the Menace: Frances Feud with Hollywood. 15 (2) 58-65.

Landy, M. (1991) British Genres. Princeton, New Jersey: Princeton University Press.

Manvell, R. (1971) The German Cinema. New York: Praeger Publishers.

Ogan, C. (1990) The Audience for Foreign Films in the United States. 40 (4) 58-77.

American Pop Penetrates Worldwide. (October 26, 1998) http://www.washingtonpost.com

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