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Disasters, crises and revolution dominated the international headlines this past year but from an industry perspective, 2011 was business as usual. And bussiness was good. While domestic box office and admissions slipped, the global take of the six major studios hit $13.53 billion, a six per cent jump on 2010 and the best-ever result. There was good news as well on the financing front, with private equity returning to the film business after fleeing in the wake of the 2008 crash and new opportunies emerging, particularly in Asia as Indian investors expand out of their booming domestic market and China tests the waters of international production – starting with Zhang Yimou’s The Flowers of War starring Christian Bale.
Even the Euro crisis didn’t dent ticket receipts, with most European territories showing growth thanks to home-made blockbuster such as France’s Intouchables, which stands at $125 million and counting from local receipts alone and Britain’s low-budget comedy The Inbetweeners, which grossed more than $70 million. Of course the biggest film of them all this year was the final entry in Britain’s Harry Potter franchise: Harry Potter and the Deathly Hallows Part 2 which grossed $1.3 billion globally.
Receipts were solid or up all over with Russia, Brazil and the Middle East in particular showing impressive growth. The studio acknowledged the importance of these new emerging territories by, for example, staging the world premiere of Transformers: Dark of the Moon in Moscow and bowing Mission: Impossible – Ghost Protocol at the Dubai international film festival.
The obvious exception was Japan, which suffered an annus horribilus as a result of the deadly tsunami and subsequent nuclear disaster.
But box office wasn’t all foreign folks were talking about this year. As the champagne corks pop from Moscow to Mexico City, THR takes a look back at the biggest, most compelling and facinating international media stories of 2011.
The End of the World
Phone hacking by journalists at Rupert Murdoch‘s News of the World tabloid came back to haunt the media mogul in 2011. The scandal forced Murdoch to shutter the paper – the oldest in Britain – and sabatoged his planned $14 billion deal to take full control of Brit pay-TV giant BskyB. Although Murdoch, his son James and CNN’s Piers Morgan (a former News of the World editor) have all denied knowledge of the illegal hacking, the Leveson Inquiry into the case continues to turn up new, damning evidence. Expect 2012 to be another rough year for Murdoch and co. The only one who came out on top in the sordid mess was Murdoch’s wife Wendi Deng, who had her 15 minutes of fame after she decked a protestor who threw a shaving-cream pie in her hubbie’s face.
Hacking of a different kind plagued Sony Corp. when in April, the company’s PlayStation Network was breached, compromising more than 100 million PlayStation accounts and leading to global outrage from subscribers to Sony’s online gaming service. The tsunami in Japan also battered the country, forcing Sony to shut down several of its factors. When it was all added up, it came to a $1.2 billion net loss for Sony for the fiscal year through March 2012.
Bye Bye Berlusconi
He held on longer than most thought possible, and much, much longer than his many enemies wanted but in November, Silvio Berlusconi was forced to resign as prime minister of Italy, a post he had held for 11 of the past 17 years. Berlusconi had shrugged off accusations of corruption, graft and underage sex but when his Bunga Bunga lifestyle finally hurting his multi-billion dollar media empire – specifically as Italy teetered on the edge of collapse during the Euro crisis – the 75-year-old mogul decided to say arrivederci. But things aren’t over yet. Berlusconi still faces a raft of legal troubles, including that infamous charge of paying a 17-year-old girl for sex. That trial looks to be as star-studded as the Levenson Inquiry, with George Clooney, soccer superstar Cristiano Ronaldo and Dancing With the Stars season 13 contestant Elisabetta Canalis among the list of witnesses.
Lars non Grata
Lars von Trier put the terrible in enfant terrible with his comments at the Cannes press conference for Melancholia in which he called himself a Nazi and claimed to “sympathize” with Hitler. It might have just been a bad joke but Cannes was not amused. The festival banned von Trier, declaring the Danish director Persona Non Grata. French police began an investigation into charges that von Trier was “justifying war crimes,” leading the director to say he will never speak publicly again. The charges were later dropped and Melancholia went on to win Best Film at the European Film Award.
Iranian Arrest, Iranian Triumph
Things didn’t turn out as well for Iranian director Jafar Panahi. In October, an Iranian court upheld his sentence: a six-year jail term and 20-year ban on filmmaking. The world film indstury – including the U.S. Academy – expressed their support for Panahi. Cannes screened This Is Not A Film, a documentary on his case he shot secretly on an iPhone and had smuggled out of the country. All to no avail. Iranian cinema, however, was not bowed. A Seperation from Persian helmer Asghar Farhadi won the Golden Bear in Berlin and is a front-runner for next year’s foreign language Oscar.
Back to the Shire
Warner Bros. got the New Zealand government to change it labor laws to accommodate Peter Jackson‘s shoot of The Hobbit, leading to some to claim N.Z. had been reduced “to a client state of a U.S. movie studio.” But as Jackson’s two-part fantasy epic nears completion, dissenting voices are few. The first entry: The Hobbit: An Unexpected Journey, will arrive in 2012 just in time to fill that box office gap left by Harry Potter‘s exit.
Marco Mueller was unceremoniously booted out as head of the Venice Film Festival in December. In his eight years on the job, Mueller is widely credited with re-shaping Venice to make it both more Hollywood friendly and to give more space to auteur and debut talents. But his legacy also includes a $135 million plan for new Palazzo del Cinema that had to be scrapped leaving a gaping hole in front of Venice’s Casino and in Mueller’s reputation. That is unlikely to stop him getting a new, high-profile festival job, with Venice competitor Rome expected to come knocking. Mueller will be succeeded by Alberto Barbera, who is expected to finally set up a film market in Venice. Things went much more smoothly at the other two of the big three Euro festivals – with Dieter Kosslick extending his term as head of the Berlin Film Festival through 2016 and Thierry Fremaux and Gilles Jacob re-upping as director and president, repectively, of the Cannes Film Festival through 2014.
Dutch reality TV giant Endemol finally broke into high-end drama in 2011 with the surprise success of its Civil War series Hell on Wheels on AMC. But back in the lowlands, things were sinking fast. The company, which made its fortune with formats including Big Brother and Deal or No Deal is collapsing under $3.7 billion in debt and desperate to restructure. Time Warner made a $1.3 billion bid for the Dutch giant, revising it to an all-cash offer after Endemol shareholders initially rejected their play. Berlusconi’s Mediaset, which already holds a third of Endemol shares, could also be moving to seize full control.
The Biggest Tweet of the Year
Saudi Arabia‘s Prince Alwaleed Bin Talal, the second largest investor in Murdoch’s News Corp, took a $300 million stake in Twitter in December. The Prince, who is worth close to $20 billion, will hold the stake in conjunction with his Kingdom Holding Company (KHC) investment firm. Given the $8 billion valuation figure often applied to Twitter by analysts, the investment will give the Prince a 3.75 percent stake in the short messaging service. Last year News Corp. took an initial 9.09 percent stake in Rotana Media Group, Alwaleed’s film, TV and music business, with an option to increase this to 18.18 percent over the course of 18 months.
Amazon Vs. Netflix
2011 was supposed to be the year Netflix conqured the world. Instead, cracks appeared in the edifice of the VOD giant. Strategic misteps at home — remember Qwickster? — led to a loss of subscribers and a sharp drop in share price. Internationally, after successful bows in Canada and Latin America, Netflix faces an uphill battle in Europe. The company plans to launch in the U.K. And Ireland in early 2012 and in Spain after that. But Netflix faces an entrenced competitor in the form of Amazon-subsidiary LoveFilm, the U.K. VOD group that has carved out a beachhead in several European markets and was busy in 2011 signing studio deals to secure top-end product. Another headache for Netflix: many of the digital rights for prime television content is already locked up in deals with local broadcasters.
Hollywood producer Andy Vajna cleaned up the bankrupt, film funding system in his home nation of Hungary this year. In June, Hungary’s government backed Vajna’s plan, which will set up a new body, the Hungarian National Film Fund, to back local productions. The old system racked up some $50 million in debt and was widely condemed as corrupt.
Relying On Reliance
Indian media giant Reliance MediaWorks, already a backer of DreamWorks and several star shingles, continued its rapid growth this year: backing David Linde’s production and financing shingle Lava Bear; raising $111 million in a rights equity issue in India; partnering with Digital Domain Productions to create visual effects and 3D stereo production services studios in Mumbai and London and launching phase 1 of its Mumbai-based RMW studios.
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