When done correctly and without regulation, this process is almost full-proof. Profit will most definitely come. Although, some countries choose to not let it get out of hand. And by some countries, I mean China.
China has an import quota that strictly only allows 34 Hollywood movies to be screened within its borders every year. This creates tension and struggle between the nation and Hollywood studios. China has the largest population, not to mention, the largest economy in the world, and appealing to that demographic would ensure a return on investment as quick as a whip. So if a film gets released towards the end of the year, chances are China’s got no room for it, so plan accordingly. The early bird gets the worm. And trust me, there are a lot of worms.
First screening locations all differ and they do for various reasons. At the end of the day, it depends on the country, the nature of its population and demographics. And most importantly, the kind of relationship that the releasing country has with its choice of their first screening location. It’s all about figuring out how to capitalize.
Maximizing Profits: An Uphill Battle
If a movie gets a head start in regaining production profits, it makes way for a larger revenue in the future. If not that, releasing films outside the country of production allows for insight on its probable success. Almost like a test run.
In 2010, Marvel decided to first release Iron Man 2 outside of the United States, delaying its initial screening by a whole day. This resulted in zero drops to its box office takings. Marvel did the same thing a year later with Thor and it was the same result. The technique allowed them to advertise its sales, creating eagerness and suspense in the American population.
And to add fuel to the money-making fire, the media gets in on this— generating stories with advertisements with words like “Australia’s box office smash” or “highest-grossing film in Asia” to boost interest. How sneaky. Marvel originally attempted this as an experiment and it’s worked out so well that they haven’t gone back since.
In some countries, distribution is way too expensive so they have to release films outside of home for any chance to make a profit at all. This is true for the United States. It is no longer a huge market for major films. In 2015, Marvel’s Avengers: Age of Ultron grossed $460 million in the United States and $950 million in foreign territories. If the movie had been released at the same time, there is no way this would have happened. Sometimes, you need all the help you can get.