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Foreign Films and Foreign Markets

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Prior to 1930, foreign markets generated 30-50 percent of a picture’s worldwide gross. Of this gross, nearly half came from English-speaking countries, mainly Great Britain. During the Depression the foreign take fell to around 20 percent, but by mid decade the percentage rebounded to normal levels. Hollywood’s commanding position in world markets is documented by the following figures: by 1930, Hollywood produced 75-80 percent of all the pictures shown throughout the world, which pictures collected about $200 million in film rentals out of a total annual world gross of $275 million.

The film industry’s entry into the principal overseas markets began in earnest after World War I. For a crucial five years in the postwar period, European nations devoted their limited capital and purchasing power to rebuilding their shattered economies; little was left to rehabilitate their home film industries. 53 Hollywood producers capitalized on at least three built-in, natural advantages over their foreign competitors. First, they utilized the natural scenery of the Pacific Coast to produce the tremendously popular Westerns and other action films. Second, they situated their studios in a climate that enabled work to continue year-round. Third, they functioned in a large domestic market with a high standard of living that ensured large revenues. In addition, American firms controlled the domestic market through theater ownership, which meant that European producers could not hope to obtain distribution except for an exceptional film.

European governments responded to these barriers to entry by establishing barriers of their own to protect their domestic film industries. Germany was the first European nation to react by instituting a contingent act in 1925. Designed to prevent a deluge of American films from overwhelming national producers, the law stipulated that for every film produced in Germany, a contingent, or permit, would be issued to its distributor to import and release a foreign (read “American”) film of equal length. In practice, the act was designed to force American companies either to become producers of German films or to invest in German production. Rather than protecting the home film industry, measures such as this merely encouraged the production of cheap, low-quality pictures, which damaged the reputations of European producers.

The talkies impeded foreign distribution at first, since spoken dialogue seemingly introduced an impenetrable language barrier. Moreover, theaters overseas were slow to convert to sound. To service these theaters, American distributors used subtitling. To service theaters wired for sound, Hollywood produced foreign-language versions of its latest releases using native casts. Paramount established a studio in Joinville, France, outside Paris, to produce versions of its films in French, German, and Italian. In the days of silents, said Variety, any picture could be retitled for all foreign markets for $10,000; in 1930 the cost of making multilinguals cost a minimum of $70,000 for each language.

Dubbing soon became the accepted practice in international trade. But not without a fight. Claiming that dubbed pictures were cheap to produce and hence constituted unfair competition, France and Germany passed laws barring films dubbed outside their borders. American film companies therefore constructed dubbing studios in each of these countries. Not only were dubbed releases cheaper to produce than foreign-language versions, but they also retained the commercial value of the Hollywood stars. The combination of these factors restored foreign distribution to its former profit levels. By the mid thirties, American films were dubbed into practically all languages of the world. Said Variety, “Europeans accept them easily and without argument because dubbing has made such exceptional strides technically that flaws are the exception rather than the rule today. Thus, auditors frequently can’t tell the difference between dubbed and straight screened product.”

As always, European films faced many obstacles breaking into the American market. They had to outperform Hollywood’s best product, for one thing. For another, they had to wedge their way into the key theater chains—chains that were controlled by the majors’ distributors and were well supplied with product as a result of reciprocal booking arrangements. To secure a playdate in a deluxe house, a foreign film had to be not only good but a smash hit. For these reasons, few foreign films gained access to the mainstream exhibition market.

During the 1930s, only around forty theaters in the United States played foreign films exclusively; an additional two hundred theaters played imports on occasion. German imports made the strongest impact on the foreign-language market. In 1931, Variety reported that Loew’s, Publix, and RKO played German films one day a week in some of their neighborhood houses in metropolitan New York. Three German companies, UFA, Tobis, and Capital, had distribution offices in New York and handled around seventy pictures a year as a group. Their pictures played in German-speaking neighborhoods of New York, Milwaukee, and a few other cities. But demand for such pictures dropped when Hitler came to power in 1933. After the Nazis nationalized the German film industry, the Reich offered pictures to American exhibitors at no cost up front, just a percentage of the take, but only a half dozen or so German-language houses accepted the offer. 55

Demand for French films hardly existed in the American market during the Depression, when only about a dozen pictures a year were imported. Interest picked up later in the decade, but only in Manhattan, which had six thriving art houses. A small market existed for Spanish-language pictures in Texas and California. These pictures, plus an occasional Russian film, constituted the foreign-language film market in the United States.

Only Great Britain had the ability to make films suitable for the American market. Most of the credit for this achievement goes to Alexander Korda. Korda’s THE PRIVATE LIFE OF HENRY VIII premiered at the Radio City Music Hall on 12 October 1933 and grossed a respectable $500,000 in the United States; Charles Laughton won an Academy Award playing the title role; and Korda proved to the world that a British film could match the best that America could produce in spectacle and lavishness. Korda, a Hungarian, had been producing quota quickies in England for Paramount. On the basis of his SERVICE FOR LADIES (U.S. title: RESERVED FOR LADIES ), United Artists awarded him a two-picture distribution contract. Korda’s second UA picture, CATHERINE THE GREAT (1934), was another hit and earned Korda a long-term contract with United Artists and a partnership in the company in 1935.

Korda was soon heralded as the man who single-handedly put the British film industry on its feet. Production companies mushroomed after 1934, lured into existence by the prospect of making another HENRY VIII. Hoping to cash in on the American market, Gaumont British opened a sales office in New York in 1934. J. Arthur Rank, the prominent British film magnate, became a partner in Universal Pictures in 1936 when J. Cheever Cowdin bought out Carl Laemmle. Parliament tried to give British pictures a boost in this country by placing a reciprocity clause in the new Quota Law of 1938 relieving American companies of the obligation of distributing British films in Great Britain if they distributed British films in the United States.

United Artists became a principal distributor of British pictures in the United States. UA was solely a distributor and did not finance films; therefore, the company did not have to give top priority to its own product. UA was always in search of quality product from anywhere to include on its roster. On the strength of his UA contract, Korda’s London Films Ltd. became the leading motion-picture company in Great Britain by 1937. Among the films Korda released through UA were René Clair’s THE GHOST GOES WEST (1935) and two H. G. Wells fantasies, William Cameron Menzies’s THINGS TO COME (1936) and Lothar Mendes’s THE MAN WHO COULD WORK MIRACLES (1937); in addition, UA released two films starring Vivien Leigh, DARK JOURNEY and STORM IN A TEACUP (both 1937), which were produced by Victor Saville.

As hostilities spread in Europe and in the Orient, revenues from foreign markets declined. Before the Nazis came to power, the German film industry had been second to the United States in prestige and sales in the major European markets. With the exception of the United States, no other country had an international film market to speak of. American film imports had been dropping steadily in Germany, from more than two hundred in 1929 to fifty in 1932. By 1936, Germany virtually ceased to exist as an outlet for American films. The Reich Film Law of 1934 had instituted rigid censorship. The German mark was frozen, and with the passing of the Enabling Act in 1936, all imported films had to be “German” in character, which meant they had to be produced, directed, and performed by persons of Aryan descent. In 1937 the German film industry was nationalized and placed under the supervision of Minister of Propaganda and Public Enlightenment Joseph Goebbels. American distributors had no choice but to leave the country.

Hollywood faced similar obstacles in Italy, but with a few special twists. For example, Mussolini prohibited American film companies from operating distribution subsidiaries; all imports had to be handled by a government film monopoly called Ente Nazionale Industria Cinematografica. This was something new; here, for the first time, a foreign government had gone into the business of distributing foreign and domestic pictures for profit. Although the monopoly was established in 1938, Italy had laid the groundwork for it ten years earlier by instituting quota laws, dubbing restrictions, and currency restrictions to bleed, antagonize, and alienate American film companies. American companies did only a token amount of business in Italy after 1938. When the United States entered the war, Hollywood severed all relations with the country.

Meanwhile, American film distributors had withdrawn from Spain following the outbreak of civil war in 1936, from the Far East in the wake of Japanese expansion in 1938, and from Central Europe following the Anschluss in 1938. After England declared war on Germany in September 1939 and while Britain’s theaters remained boarded up during the Nazis bombings of London and other English cities, Hollywood saw its overseas market virtually disappear.

Forensic Anthropology and Race - CATEGORIES OF INVESTIGATION, ANCESTRY AND FORENSIC ANTHROPOLOGY, THE PROFESSION [next] [back] Foreign Affairs - The Yankees Invade, Paramount in Europe,  , The First Paris Agreement

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