Cannes: International Players Vie for Studio Space
A group of international power players are trying to beat Hollywood at its own game.
Led by French giants EuropaCorp, StudioCanal and Gaumont and including such young upstarts such as Canada's Entertainment One, more non-U.S. distributors are producing the kind of English-language features that used to the exclusive purview of major American studios.
In Cannes on May 16, Luc Besson's EuropaCorp announced a new $450 million credit facility that will triple its production of English-language movies to around 8 per year and drive the French giant's invasion of the U.S. market.
The five-year facility from banks J.P. Morgan, SunTrust and OneWest is, according to company CEO Christophe Lambert, the “last act” in EuropaCorp's U.S. plans. The first film to be made using the new facility will be Besson's relaunch of his Transporter action franchise starring Ed Skrein in the role made famous by Jason Statham. EuropaCorp's English-language features will go out in the U.S. through RED, EuropaCorp's distribution joint venture with Ryan Kavanaugh's Relativity Media.
By distributing directly in the U.S., EuropaCorp is looking to beat the odds. The American theatrical market has been the graveyard for many an ambitious outsider. Back in the 1990s, the costs of Gramercy, the U.S. distribution label of Euro-studio Polygram, was a major factor in the group's demise. More recently, the P&A costs involved in distributing Exclusive Media's Rush in the U.S. contributed to the company's retrenchment.
So far, the likes of StudioCanal, Gaumont and Entertainment One have largely avoided the risky U.S. distribution market (though eOne does domestic distribution on some of its titles), instead using in-house distribution operations in international territories, along with global pre-sales, to bankroll productions independent of America. It's the model StudioCanal used for upcoming $50 million kids title Paddington from Harry Potter producer David Heyman starring Nicole Kidman and Colin Firth, which the French company fully financed and will distribute in France, Germany, the U.K. and Australia/New Zealand. Entertainment One, strengthened by a new $100 million production fund, did a similar thing with Gavin Hood’s drone thriller Eye in the Sky, coming on to finance and sell the picture -- starring Firth, Helen Mirren and Aaron Paul -- and handling distribution itself in multiple territories.
“Our domestic market has some size. We have a nice balance now with 180 – 200 million people in relatively well off countries that like to go to movies, buy DVDs, use SVOD platforms and watch television. That feels like a good space for us.” StudioCanal evp international production and acquisitions Ron Halpern tells THR.
While their models differ, all these international players are targeting mid-budget films – in the $10 million to $80 million range - the kind of non-tentpole film the major studios often consider too small to bother with.
Chinese film companies also have signaled they have similar, studio-sized ambitions. Real estate giant Dalian Wanda, which owns the AMC multiplex chain, has expanded into film production and distribution – initially in China – and is reckoned to have the financial muscle needed to expand internationally. Beijing and L.A.-based DMG, which co-produced Transcendence and Iron Man 3, is planning an IPO with a valuation of nearly $1 billion, which would give it the capital to fund its global ambitions. And Studio 8, Huayi Brothers' new venture with former Warner Bros. film chief Jeff Robinov, plans to invest between $120 million - $150 million in the production and distribution of English-language features.
“We’re not in a position to produce non-Chinese language movies yet and become like an international studio, but at some point we will,” said Felice Bee, president of Huayi Brothers International. “I don’t know how quickly it will happen, probably it will start with co-financing.”
But, as one European-based studio executive tells THR, it takes more than financial might to replicate the major's global reach: “Financing and production is easy, we can all do that if we have the capital. The problem is distribution – getting your movies in the theaters worldwide. That's where our model, the studio model, works. And where, so far, no can match us.”
Clifford Coonan contributed to this report.