I saw Thirst this weekend, a Korean film about a Catholic priest turned vampire. I was expecting strangeness, but it was really strange. The female lead, Kim Ok-bin gave a pretty good performance that I found very memorable. My friend who I watched the film with wondered if Asians produced really strange films, but my own suspicion is that there's a selection bias in terms of the types of "foreign films" which arrive to American shores. After all, what's the comparative advantage of sappy Korean melodramas when we have so many of our own? In regards to special effects driven movies I doubt anyone can compete with Hollywood. So it has to be "art house" productions which trade on pushing the envelope combined with exotic locale. Or at least that's my working model, would be happy to be informed by those "in the know"....
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"my own suspicion is that there's a selection bias in terms of the types of "foreign films" which arrive to American shores."
I think this is exactly the case. We have a film festival here where we live that annually does a panel of contemporary Japanese films. My wife was born and raised in Japan. Every year she complains about the selection, which comprises mostly gruesome horror movies, odes to the more extreme edges of anime culture, pseudo-porn, or very skewed low production value black comedies. Every year I hear, "Why do they have to bring THESE films over here? These are trash films. Less than 0.01% of Japanese enjoy or have even seen this crap."
Ahem ... "in the know," here.
The global market for horror films is a classic example of niche market with a long tail. While the audience in each country is small, the global audience is appreciable, and fans will continue to purchase obscure titles long after their release date. (The very first DVD I ever owned was F.W. Murnau's Nosferatu, made in 1926.) I've known both horror collectors and scholarly cineastes, and I'd wager the typical horror fan has more foreign films in his collection than the cineaste.
There's a long tradition of countries with small film industries using horror as a way to tap into global markets and distribution. The Italians got the ball rolling in the 50s and 60s with their gothic and giallo films, soon to be imitated by Spain and Germany. Mexican horror and luchador films in the '60s were exported all over Latin America and Iberia. By the 70s, countries like Brazil, Argentina, Greece, the Netherlands, and the Phillipines tried their hand at making horror films for the export market, with varying levels of success. (Brazil's Zé do Caixão, for example, has become a cult legend, but the Netherland's The Lift is the punchline to a bad joke.)
In the 80s, English-language filmmakers like Sam Raimi and Peter Jackson successfully used independent, low-budget gore films aimed at the export market to break into serious film-making.
In the 90s, when Japan had such huge success with Ringu, there was a whole new wave of countries using horror as an entry into the international cinema market. Korea was first to follow Japan, but there have been some excellent horror films out of Thailand, Singapore, and Taiwan as well. And of course Hong Kong "Category III" films have been around for ages, but are strictly for connoisseurs of the truly decadent.
So, yes, these movies are not widely popular in their native countries -- and in fact, many of these movies made in past decades could not legally be shown in their native countries (for example, Jess Franco's films were never shown in Fascist Spain). But the aggregate international market is quite sizable, and if you show up Cannes with a horror movie in the can, you're pretty much guaranteed a distribution deal with long-term returns.
HP: but you have to admit the bit where the girl comes out of the TV in Ringu is still pant-wettingly scary.