Spoiler alert: international markets largely determine a film’s financial success!
Hollywood has controlled the film industry for a very long time – over a full century! So it’s easy to assume that a film’s success probably comes from domestic ticket sales. And for a while that was true. In fact, not that long ago the term “international box office” didn’t even exist. But studios were keen to the economic and cultural benefits of globalization, and started expanding film releases to international markets. This led to the creation of a “worldwide” box office that consists of “domestic” (U.S. & Canada) and “international” (everywhere else) markets.
I’ve been looking at animated films for a side-project recently (see my post on Broadway’s influence on Disney), and one trend became immediately apparent: the majority of a film’s box office gross now comes from the international box office! To confirm and better visualize this trend, I separated the yearly worldwide/total box office gross of all animated films into domestic vs. international components. And the result is clear as day: since the late 1990s/early 2000s, revenue from the international box office accounts for most of a film’s total box office gross. In fact, for the past 10-15 years approximately 2/3 of a film’s gross comes from the international box office, while only 1/3 comes from the domestic box office:
While I looked specifically at animated films, these results are valid in general as figures from the Motion Picture Association of America (MPAA) show that almost 70% of box office revenue comes from international markets. And if you’re looking for further reading, the MPAA releases excellent research reports. The Theatrical and Home Entertainment Market Environment (THEME) reports, in particular, are a fascinating treasure-trove of information and data! Here’s a link to the 2020 THEME report.
Another way to visualize the rise and dominance of the international box office is to look specifically at some of the highest-grossing animated films of the past 20 years: Shrek 2, Toy Story 3, Frozen, and The Lion King (2019 remake). For these four films, displayed in the below bar chart, you can see that gross from the domestic box office has plateaued at around $400 million. Gross from the international box office, however, has steadily increased over time – even surpassing $1 billion in 2019!
What is causing this trend?
The rise and dominance of the international box office can be attributed to several factors, including:
- Domestic market saturation
- The North American film market has been fine-tuned for over a century. International markets in developing countries have the capacity to spur new growth, and China and Russia have increasingly opened their doors to Western films.
- Multicultural appeal
- Global releases
- Films used to be released domestically long before they were available to international markets. That all changed in 2003, when The Matrix Revolutions received a truly global release on the same day. Nowadays it is common for films to be released simultaneously to domestic and international markets.
I’m happy to share the data I used to create the two plots above! Just let me know in the comments below, or Contact me.
What are your thoughts on domestic vs. international box office gross? What other trends have you noticed in the film industry? Let me know in the comments below!
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