Why Hollywood is releasing films in foreign markets before the US

Studios are increasingly releasing marquee movies before the US in overseas territories to avoid clashes with local films, events and festivals

Last week, Disney announced that ‘Jungle Book’ will release in India a week before it does in the US. This is not the first time a foreign studio has done this; Warner’s ‘Hobbit 3’ and ‘Journey to the Mysterious Island’ and Disney’s ‘Avengers: Age of Ultron’ being other examples. Experts believe that this is a strategy that will continue if Hollywood studios want to ensure good business at the cinemas for their products.
 
Ajit Andhare, COO, Viacom18 Motion Pictures says, “Most of the times, these decisions are governed by the dates of big Bollywood movies releasing in India. The size of the Hollywood box office worldwide is huge – almost $40 billion. In comparison, the Indian box office, including all languages is around $1.2 billion, with Hindi cinema commanding a major portion. However, in order to make business sense of releasing a movie in India, studios need to caution against facing off with a big Bollywood release.”

 
Various factors such as local releases, important sporting events, and festivals/holidays, among others, are taken into consideration before deciding to release a film before the US. If a decision is taken to release in international markets before the US, the opportunity also becomes available to India, studios take the decision locally whether to go before the US date or along with it.
 

“Most of the films released in India before the US have been done to avoid the big Hindi releases. Hollywood forms a small part of the total box office in India and hence the exhibitors prefer to give a wider showcasing to the local releases,” said an executive from a Hollywood studio, pointing out that in such a case, the film becomes a second choice for the moviegoer.

 
“To avoid such circumstances, studios opt for the International release date rather than the US date. However, if there is a clear date available, then ideally the studio would prefer going day and date across all territories in the world,” this person added.
 
In the case of ‘Jungle Book’, which releases on April 15, the US release date would have pitted it directly against ‘Fan’, the Shah Rukh Khan starrer from the YashRaj stable. Given that such big-ticket Bollywood releases usually command upwards of 4,000 screens nationwide, while Hollywood films play in the range of 1200-1500 screens, the adaptation of Rudyard Kipling’s novel potentially faced a heavy commercial blow.

 
Another executive from a leading Hollywood studio said the trend is not India-specific but a global one.
 
“Historically, all films used to release in the US first and then subsequently in other international territories. But with the growth of the international box office and other territories becoming increasingly important, studios have started factoring international markets in the release strategy,” this person said.
 
Outside of the US, China among is the single largest Hollywood markets in the world. 20^th Century Fox released DreamWorks’ ‘Kung Fu Panda 3’ in China a week before the US given the popularity of the film and the Chinese New Year festivities.

 
Andhare adds that releasing a movie in India before the US gives a marketing edge to the studios as well. “Studios can urge audiences to go to the theatres and watch an awaited film ‘before the US’,” he says.
 
One potential risk, however, remains high, particularly in Asian markets: piracy. However, executives across the board insist that this is factored in while making the decision. Only if the expected commercial gains outweigh the threat of piracy is does a studio go head with a pre-US release in such markets. “No studio would opt for a prior release date if it did not have a significant impact on the commercials,” says one of the Hollywood studio executives mentioned earlier.