Iron Man 3 Chinese PosterFor the past several years, we've been noticing the ramped up production of big budget films based on comics, graphic novels, and books. The American Society of Cinematographers offers an analysis as to why that is, and what role the international market, namely the fast growing Chinese market, plays in how American films are made and marketed. Highly marketable under the lucrative umbrella of a franchise, American films are heavily influenced and favored by the international box office, indicating that self-distribution through platforms like VOD is more important for independent filmmakers than ever.

The film industry is just that: an industry. The main focus of studios, as evidenced by their choices of  films they produce, is to make the most profit. Film franchises offer the most return for their investment, because they exhibit stories, conventions, and heroes that audiences know and enjoy.

The most profitable "brands" include a lot of action and special and visual effects, mostly because images translate better overseas than dialog. These films become massive tentpoles that hold studios up financially, even though the budgets are massive, ranging anywhere from $100-250 million for production and $175 million for marketing.

The returns from the last "mega films" range from 9% for The Great Gatsby to 107% for Iron Man 3, but these profits are largely due to the international box office. According to the ASC article, written by Benjamin B, two-thirds of Hollywood studio profits come from international sales.

Top 10 film gross two thirds
The Chinese market is the fastest growing market today, expected to overtake the American box office in 5-10 years. Because of China's incredible financial influence, Hollywood studios are designing their production plan around their tastes, as well as those of other countries, which means that big concessions are being made. Benjamin B writes:

Getting American films into the government-regulated Chinese market is not easy. China has established a maximum quota of 20 American films per year. In February 2012 an agreement between vice-president Joe Biden and his counterpart Xi Jinping allowed for another 14 US films per year, provided they are in 3D or in the IMAX format.

Studios have taken it a step further by reworking films in order to add, cut, or censor scenes based on the preferences of Chinese authorities. Some of these changes include censoring on morality, like cutting love scenes from Cloud Atlas and Kate Winslet's breasts in Titanic. However some include plot changes that put China in a more favorable light, barring a scene where James Bond kills a Chinese guard, making the antagonists in Red Dawn Koreans instead of Chinese.

Here is a scene from Iron Man 3 that includes Chinese celebrity Fan Bingbing that isn't included in the American version.

So, what does all of this mean for independent film? Are the global economics of international cinema making it harder for low-budget filmmakers to produce their work domestically? Well, yes and no. Studios haven't stopped production on all low-budget films, nor have distributors stopped working with indie filmmakers. In fact, the recent poor performance of big-budget tentpoles this summer has indicated a shift in domestic tastes, which could potentially have a greater impact on which films are made the U.S.. Producer Lynda Obst touches on this in an an interview with Kim Masters on KCRW:

Certainly our audience has tired of the sameness of certain kinds of franchises. And the domestic audience, we need to have a very good in order for it to work, because our word of mouth travels very, very quickly. And it seems to me that there are only so many times you can see the same cities being destroyed over and over again before it becomes ultimately very tiresome.

However, the chances of a screenwriter's spec script getting picked up by a studio are slim, and independent filmmaker finding distribution through traditional means faces similar difficulty. This is why self-distrubtion through platforms like VOD is one of the greatest tools an indie filmmaker can have, because it allows filmmakers to have more freedom from the studio system to distribute their work (at least for now.)

As the international market for films continues to grow and change, it will be interesting to see what effect it has on independent film. Will domestic audiences begin foregoing big-budget action flicks for the more nuanced fare of smaller budget films? Will self-distribution turn cinema on its head? Only time will tell.

Link: Hollywood Biz 3.0 - part 1: China -- The American Society of Cinematographers