The Changing Role of Hollywood in the Global Movie Market

Abstract

Does Hollywood dominate world cinema markets with American taste, culture, and values through the exportation of films produced mainly for its domestic (US and Canada) market? Or does Hollywood supply the films that world audiences demand and, because of the logistics of distribution, screen these films first in the domestic market prior to exhibition in foreign markets? In this article, the authors empirically analyzed the global market for motion pictures to provide statistical evidence that can speak to these questions. They examined data on nearly 2,000 films exhibited from 1997–2007, inclusive, in the United States and Canada, Australia, France, Germany, Mexico, Spain, and the United Kingdom—markets that today collectively account for over 75% of worldwide cinema box-office revenue. The empirical evidence provides support for the hypothesis that the supply of Hollywood films has accommodated global demand as the relative size of the U.S. domestic market has decreased. There is no evidence that box-office success in the United States creates a contagion that spreads to other film exhibition markets; however, box-office success in international markets appears to be less uncertain for films that have been successful in their U.S. releases.

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