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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).