When Hollywood movies fail to find audiences in America, it is often claimed that these movies redeem their losses overseas. The
assumption here is that the box-office receipts abroad are pure gravy for the movie studios. For example, the usually financially-savvy
Wall Street Journal reported on 19 November 2004 that three notable duds in America – Troy, The Terminal and King Arthur ended up
turning handsome profits because in each case, box-office receipts from outside the US far outweighed domestic returns. It then cited
impressive sounding numbers:
Troy $363 million internationally
The Terminal $96.3 million
King Arthur $149.8 million
As if these receipts represented their salvation. In reality, however, these impressive-sounding receipts represented the foreign theatres revenue, not the studios share of it. In fact, the studios get an even smaller share of the foreign than of the American box-office.
Last year the studios share averaged about 40 per cent of ticket sales. And from those revenues studios have to pay for foreign advertising, prints, taxes, insurance, translations, etc. Once those expenses are deducted, the studios are lucky to wind up with 15 per cent of what is reported as the foreign gross.
Consider a typical movie – Disney's Gone In 60 Seconds. Its reported foreign gross was $129,477,395. Of that sum, Disney got
$55,979.966 and paid out $37,986,053 in expenses.
They included:
Foreign advertising $25,197,723
Foreign prints $ 5,660.837
Foreign taxes $ 5,077,286
Foreign versions $ 822,997
Foreign shipping $ 454,973
Currency conversion $ 266,900
Foreign trade dues $ 122,275
After paying these expenses, Disney was left with just $17,993,913 – a far cry from the reported $129,477,395 gross. And the film is still over $153 million in the red. So while the foreign box-office helps out, it does not necessarily make a movie profitable.