With a record $11.37B, the domestic box office enjoyed its biggest year ever in 2016. But, according to industry estimates, overseas numbers are down. The estimated full international box office for 2016 is about $26.73B, a dip of roughly 3.7% on 2015. That puts the worldwide tally for 2016 at $38.1B. The offshore estimates are early numbers that do not necessarily take all territories/distributors into account — and there are a lot of them. Based on a combination of sources, we have compiled a global chart reflecting the Hollywood studios in 2016 (see below) as well as their international market share. For domestic, see here. We’ll update with more information when it becomes available. But, wait! There’s much more…

Regardless of how the split pans out, Disney is the undisputed 2016 king with a record $4.604B at the international box office. The strength of its brands has become undeniable, from Lucasfilm to Marvel, Pixar and Walt Disney Animation and Live Action, each of which resonate with overseas audiences.

Globally, Disney grossed $7.605B, the first time any studio has passed the $7B mark. And, this is the 4th consecutive year in which at least three of the studio’s new releases surpassed $700M worldwide. In 2016, five hit the mark: Captain America: Civil War, Finding Dory, Zootopia, The Jungle Book and Rogue One: A Star Wars Story. Says Dis distribution chief Dave Hollis, “We have had a lot of success with our brands due to the high quality and the universal nature of the stories we’re telling… A big part of why movies that have worked this year have worked is their ability to resonate both locally and universally.”

It almost didn’t matter that Alice Through The Looking Glass fell flat. If there is one area where Disney can grow its arsenal, it’s the Chinese performance of Pixar titles. The numbers continue to rise as a new generation discovers the brand, but it doesn’t yet have the same impact in the Middle Kingdom as elsewhere. Says Hollis, “It’s an investment that is made over time and it’s easy to take it for granted, but the strength of these brands in so many countries is a byproduct of generations of work. This is a newer marketplace, so some of the brands don’t have the foothold yet that the balance of the world for the most part enjoys.”

Conversely, WDA’s Zootopia multiplied like rabbits in the PROC, coming in as the No. 2 film of the year with $235.6M and a story locals could relate to. Beginning tomorrow, we’ll see how China takes to the Star Wars franchise as Rogue One makes its debut there.

But looking at the whole Hollywood picture and regardless of which way the international pendulum ultimately swings, talking to sources as 2016 drew to a close, the notion certainly emerged that a number of movies simply weren’t as good, with sequelitis bleeding into overseas. The challenge of making people want to go to the cinema is greater than ever given all the distractions from other forms of entertainment and remains top of mind for studios. Most also agree that the constantly fluctuating currency rates are a big international box office bugaboo, resulting in lower dollar returns.

That’s particularly true in the UK this year, a relative newcomer to currency woes after the June 23 Brexit vote to leave the European Union sent the pound plummeting. There is about an 18% difference in what the pound was worth in the latter half of the year versus the dollar, for example.

Says Warner Bros’ EVP of International Distribution, Thomas Molter, “The exchange rates are all over the place, completely volatile. We’re always going to be subject to what could happen politically and economically from a currency perspective. In light of the tumult, the fact that we hit our third biggest year ever is pretty incredible.”

Still, with targets set early in the lengthy filmmaking process, fluctuations can result in surprises down the line. But because currency can’t be controlled, the biggest issue is getting folks out to films.

Hollis says, “In a world where the audience is getting more sophisticated and has more choice for content than at any time in history, people want to see movies that are well made and full of scope and scale and take advantage of the technology that differentiates the theater from the home.”

Targeted local marketing — think Fox’s Deadpool and Sony’s Sausage Party — and an understanding of local tastes in a world where moviegoers have a lot of choice is key. So is being strategic with release dates. President of Sony’s Columbia Pictures Sanford Panitch says, “A lot of smart decisions are getting made,” at Sony. “A good example is Sausage Party. Tom (Rothman) did the same thing at Fox — you can adapt a campaign locally in a market and do things in a really special way.”

He adds, “You have to be smart about how you release internationally and careful that you understand the local markets… In emerging markets, the audience has become more discerning. Just because Hollywood sticks a movie there it doesn’t mean they are just going to go. They now have a plethora of local films they have a more sophisticated palate. It’s not just automatic.”

Talking about dating, Warner Bros had a win with Me Before You ($152M IBO) — a perfect summer counter-programming to the Euro 2016 soccer tournament. It could be argued also that Disney has lined up a sort of appointment viewing system in the dating of each of its brands.

CHINA

And then there was China. This was a re-set year for the Middle Kingdom. Based on the gargantuan 48.7% increase at the box office in 2015, studios had big numbers factored in for the year and very few met those expectations, says one industry source. There was growth, but it was a relatively low 3.7%. That’s down to the lack of subsidies from online ticketers which sent the price of attending a film up from around $2-$4 to $7-$9 and made many moviegoers pickier. A crackdown on box office fraud also contributed after 2015 saw a rash of manipulated receipts. And, the market is becoming more discerning.

The USTR will be negotiating a new contract with China on behalf of the film industry in February. It’s understood that the companies are beginning to align on what terms will be sought. On the table is a potential lift of that 34 revenue-share floor. There is a widely-held misconception that the revenue-share films are capped at 34 per year. But, according to the agreement set out in February 2012, 34 is a floor and not a ceiling. Still, there are some in Hollywood who argue it’s not necessarily the be-all-end-all to increase that. At the end of the day, how much space is there for U.S. movies when there is no control over dates?

That is another hope, that studios would have some sort of say in when their movies release to avoid that cannibalization that so often happens. This would enable studios to get a jump on the all-important marketing of films in China, rolling out promotions and talent in a more time-managed fashion.

Worldwide Box Office 2016 Studio Rankings

thumb Rank studio domestic gross international gross int’l market share total gross
1 Disney $3,001M $4,604M 17.2% $7,605M
2 Warner Bros $1,902M $3,030M 11.3% $4,930M
3 20th Century Fox $1,531M $2,980M 10.9% $4.490M
4 Universal $1,405M $1,909M 7.1% $3,314M
5 Sony $910.2M $1,248M 4.7% $2,158M
6 Paramount $876.8M $847.2M 3.17% $1,760M
7 Lionsgate $686.3M $856.4M 3.2% $1,543M

NOTABLE PERFORMANCES/TRENDS

Warner Bros’ Fantastic Beasts And Where To Find Them ($550M+ IBO) set up a fantastic start for the new Wizarding World franchise. WB is the No. 2 studio at the international box office with $3.03B, its 3rd best year ever and a 43% increase on 2015.

WB’s Suicide Squad ($422M IB0) and Fox’s Deadpool helped prove you don’t necessarily need China. The R-rated pics were not screened in the Middle Kingdom. During promotion, Deadpool‘s Ryan Reynolds appeared on the UK’s Graham Norton Show and said China had rated the film “Go f*** yourself.”

Universal, conversely, proved domestic doesn’t have to be the big play. Although it didn’t release Warcraft in China (where it made $221M), the studio did have overseas and North America. The film grossed $166M outside the Middle Kingdom internationally, whereas domestic was just $47.2M. Uni has a similar set up in 2017 with The Great Wall which has made about $150M in China and is off to a solid start in smaller Asian markets ahead of domestic release in February.

Likewise, Universal/Working Title/Studiocanal’s Bridget Jones’s Baby crossed the $200M mark at the global box office with just $24M coming from North America. The roughly $40M pic also for a time was the top title of 2016 in the UK, before being overtaken by Fantastic Beasts and Rogue One. It is the market’s No. 1 romantic comedy and No. 2 comedy of all time.

And, comedy is hard, especially internationally where humor doesn’t necessarily travel. Paramount’s late 2015 release Daddy’s Home, however, made $79.4M of its $90M offshore take in 2016.

Sony’s $19M-budget Sausage Party made $140M worldwide — $42M from international. Lower budgets are an important element going forward. Sony’s Inferno set overseas audiences on Professor Robert Langdon’s trail with $185M off of a $75M production cost, half the spend on the franchise’s previous entries. Says Sony President of Worldwide Distribution, Rory Bruer, “The entire world is important and of course the U.S. will always be. But in regard to the type of movies we are going to make, certainly the international piece of it is up front.”

Having used the Cannes Film Festival as a launch pad for the first movie in the The Da Vinci Code series, Sony in 2016 turned to the Riviera for The Angry Birds Movie with a savvy marketing stunt held a day before the fest opened. That launched the new franchise to $242M offshore ($350M WW).

Another animated start with universal appeal was Illumination/Universal’s The Secret Life Of Pets ($507.3M IBO) while Sing is off to a strong start at $100M+ with more rollout ahead in 2017.

In local-language, Sony made a smart play in acquiring The Mermaid in 2016, the Stephen Chow-helmed film is the biggest Chinese movie ever and grossed over $20M in Sony markets outside the PROC. The upcoming Journey To The West: The Demon Chapter will likewise go through the busy Sony Pictures International Productions which is overseen by Columbia President Sanford Panitch.

(Local-language is a lucrative business with Fox, Warner Bros and Universal also heavily involved. Of particular note this year, in Korea WB had Miljeong gross $55M while Fox’s The Wailing made $49M. Uni released the English-language A Monster Calls, which qualifies as a Spanish film, in Spain to $28.7M for No. 1 of 2016.)

Sticking with China, Paramount’s Top 3 films were all released there with a local partner invested. Star Trek Beyond is No. 1 at $185.36M IBO ($65.17M in China), followed by Teenage Mutant Ninja Turtles: Out Of The Shadows at $163.8M IBO ($59M China) and Jack Reacher: Never Go Back at $104.36M IBO ($8.98M China). Deals with Huahua Media and Alibaba helped those grosses in a Middle Kingdom year that was lackluster to say the least. But the partnerships didn’t light the box office on fire either during a period where sequelitis was a recurring theme. A strong 2017 slate is ahead (see below).

Sequelitis did not affect Lionsgate’s Now You See Me 2. The film grossed $97.1M in the Middle Kingdom out of a total $269.8M offshore. Why did it work so well in China? Casting Jay Chou was a coup and his followers know he’s a big magic fan in real life. While we are seeing and will continue to see more Chinese elements in Hollywood movies, the fit really has to be organic and it worked here. Although it did not have a Hunger Games title in the offshore marketplace, Lionsgate’s 2016 was relatively flat with 2015.

TOP 5 MARKETS

Despite its slowdown in growth, the Top 5 overseas territories begin with China where three Hollywood films made it into the Top 5: Zootopia, Legendary/Universal’s Warcraft ($245M China/$386.3M Intl/$433.5M WW) and Disney/Marvel’s Captain America: Civil War ($200M/$745.2M/$1.153B).

Next up is Japan, led by the phenomenal performance of Toho’s animated local pic Your Name at $218.2M. Demonstrating the strength of local titles in Japan, only Zootopia ($68M) and Finding Dory ($64.9M) placed into the Top 5. And, in Korea (the world’s No. 4 market which remained relatively flat this year), just one U.S. movie – Civil War ($63.37M) – landed in the Top 5 ranks.

In the UK/Ireland — the world’s No 3 market outside North America — Disney/Lucasfilm’s Rogue One: A Star Wars Story became the top movie (in local currency) just as the doors closed on 2016 (£50.74M/$64.74M). A bouncing surprise there was the performance of Bridget Jones’s Baby which is No. 3 for the year.

France rounds out the Top 5 offshore plays, led by Zootopia ($34M). There is only one local title in the Top 5 in France (comedy Les Tuche 2), however it’s Disney’s Moana ($32.4M) which is expected to leapfrog those to become the No. 1 2016 movie. It is still in release and is navigating a course to overtake Frozen as Disney’s highest grossing animated movie ever there.

Also notable here is that Latin America is still on the rise. Warner crossed $500M in the region for the first time in 2016 and others have experienced growth. Also notable is South East Asia. In general, studios are looking to gain ground everywhere. Says Sony chief of worldwide distribution Rory Bruer, “The entire world is important and of course the U.S. will always be. But in regard to the type of movies we are going to make, certainly the international piece of it is up front.”

UPCOMING 2017 FILMS WITH STRONG INTL POTENTIAL
DISNEY: Beauty And The Beast, Guardians Of The Galaxy Vol 2, Pirates of the Caribbean: Dead Men Tell No Tales, Thor: Ragnarok, Star Wars: Episode VIII
WARNER BROS: The LEGO Batman Movie, Kong: Skull Island, Wonder Woman, Annabelle 2, Dunkirk, Blade Runner 2049, Justice League
FOX: Logan, Alien: Covenant, War For The Planet Of The Apes, Kingsman The Golden Circle, Red Sparrow, Murder On The Orient Express
UNIVERSAL: Fifty Shades Darker, The Fate Of The Furious, The Mummy, Despicable Me 3, Insidious: Chapter 4, Pitch Perfect 3
SONY: T2: Trainspotting, Resident Evil: The Final Chapter, Smurfs: The Lost Village, Spider-Man: Homecoming, The Dark Tower, Jumanji
PARAMOUNT: xXx: The Return of Xander Cage, Ghost In The Shell, Baywatch, World War Z 2, Transformers: The Last Knight
LIONSGATE: Power Rangers, John Wick: Chapter Two, The Shack