Sony and Local-Language Productions: Conglomerate Hollywood's Strategy of Flexible Localization for the Global Film Market

Abstract

Since the 1990s, Sony Pictures Entertainment's local-language production unit has coproduced films with local partners outside of the English-language market. This strategy serves as a turning point toward industrywide local specialization and global expansion for conglomerate Hollywood. Based on trade publications, field research, and industry interviews, this article explores the multifaceted nature of Sony's attempt to operate what I call a "flexible localization strategy" in the Brazilian and Spanish film markets. To adapt to a vastly changing industrial climate, contemporary media conglomerates are reimagining media geographies and localization efforts. These strategies challenge earlier understandings of an all-powerful global Hollywood by revealing internal friction across conflicting institutional priorities, industrial practices, and local cultures of production and management.

Headnote

Abstract: Since the 1990s, Sony Pictures Entertainment's local-language production unit has coproduced films with local partners outside of the English-language market. This strategy serves as a turning point toward industrywide local specialization and global expansion for conglomerate Hollywood. Based on trade publications, field research, and industry interviews, this article explores the multifaceted nature of Sony's attempt to operate what I call a "flexible localization strategy" in the Brazilian and Spanish film markets. To adapt to a vastly changing industrial climate, contemporary media conglomerates are reimagining media geographies and localization efforts. These strategies challenge earlier understandings of an all-powerful global Hollywood by revealing internal friction across conflicting institutional priorities, industrial practices, and local cultures of production and management.

In 2007, Sony Pictures Entertainment's (SPE) chief executive officer (CEO) Michael Lynton wrote an opinion piece for the Wall Street Journal titled "Glob- alization and Cultural Diversity," wherein he defended SPE's growing global operations, which were intent on expanding English-language media and lo- calizing production strategies for international markets. Lynton argued that these "are not signs of Hollywood's homogenizing effect on the world. They are signs of the world changing the way Hollywood works. It makes sense to marry our production, marketing, and distribution experience with the growing global ap- petite for entertainment tailor-made by and for a variety of cultures."1 In addition to adopting globalization rhetoric, Lynton attempts to spin the criticism of Hol- lywood studios' imperialist and homogenizing activities. This promotional piece raises the question of how Sony's production strategies actually operate on a global level. One such strategy-local-language productions-was both a Sony corporate initiative and a larger industrywide experiment inspired by notions of globalization. The way multinational companies like SPE are reimagining media geographies and localization strategies reveals both internal friction between conflicting institutional priorities and the difficulties of managing and integrating various local cultures of production across a transformative industrial climate.

Local-language productions (LLPs) are a fairly recent phenomenon of the con- glomerate Hollywood era, during which cross-media and cross-company convergence as well as increased importance of international markets have shaped the post-1989 period.2 Much industrial and scholarly attention has been given to the global perfor- mance and production cultures surrounding multiplatform tentpole pictures and the increased "indiewoodization" of American independent cinema.3 Yet the simultaneous global expansion and local specialization across various conglomerate film divisions are typically limited to the production and circulation of English-language content. Larger processes of globalization, conglomeration, and convergence are increasingly reshap- ing studios' operations outside the Anglophone market in different ways. Industrial structures and internal processes have been reimagined in recent decades in a race to capture growing global audiences.4 International markets (Europe, Latin America, and Asia) now outearn the North American domestic market by two to one for the major studios. Industrywide notions of a "biz without borders" that collapses geographical film markets circulate as media conglomerates restructure international operations and their positions in local markets.5 The local-language production represents an industry- wide experiment in systematic localization across the global film market. This strategy serves as a turning point in studio efforts toward local specialization and global expan- sion beyond the Anglophone market.

What results is an aggressive and pioneering localization strategy that has become an industry standard for the majority of Hollywood studios. The LLP strategy il- lustrates Sony and its peers' increasing reliance on a global marketplace beyond the United States and English-language regions.6 Yet as this article illustrates, each studio approaches LLPs differently, and with mixed results. In turn, local production units serve as one of the most distinct, and least analyzed, elements of contemporary interna- tional operations. On the one hand, this discussion of SPE's local productions builds on media industry traditions grounded in political and economic questions of ownership, capital, and distribution monopolies; work by Janet Wasko, Toby Miller, and Douglas Gomery typifies this approach.7 On the other hand, I am interested less in retreading this territory of Hollywood as all-powerful, capital driven, and organized. Instead, I consider how media-conglomerate reactions, like Sony's, to the localization of media production complicate a monolithic understanding of Hollywood. In other words, how do these practices reflect a more multi-layered understanding of these companies which Henry Jenkins claims are unorganized, dysfunctional families, or more appropriately what Michael Curtin describes as a product of conflicting institutional priorities.8

Instead of the traditional model treating markets such as Latin America, Europe, and Asia as merely extensions of the domestic North American market and distribut- ing the same English-language content, SPE actively began a strategy of coproducing and distributing motion pictures and television programs specifically for regional and local audiences. As Sony found early success by participating in films like Ang Lee's Crouching Tiger, Hidden Dragon ( Taiwan, Hong Kong, United States, and China, 2000) and Hector Babenco's Carandiru (Brazil, Argentina, and Italy, 2003), other studios fol- lowed by developing their own local production strategies. Sometimes successful with local audiences, and many more times not, local-language films are coproductions between Hollywood studios and local producers in the European, Asian, and Latin American markets. While coproductions between Hollywood studios and local play- ers are not a new phenomenon, many of the earlier efforts were one-off productions rather than the specialized market-by-market and multipicture strategies that have developed since the 1990s.9 This current approach is particularly indicative of the need and capacity of studios like Sony, Twentieth Century Fox, Warner Bros., Uni- versal, and Disney to attempt to understand what globalization means for the produc- tion, distribution, and reception of media content worldwide. The story of how these companies negotiate LLPs reflects a changing global media climate and their positions within it.

Based on trade publications, field research, and industry interviews across Brazil and Europe, this article explores the multifaceted nature of LLPs from three perspec- tives.10 First, I define the production strategy as an industrywide model developed differently among Sony, Warner Bros., Twentieth Century Fox, Universal, and Disney. The next section explores Sony's overall LLP trajectory, from its emergence in the late 1990s to the consolidation and scaling back that had occurred by 2007. Finally, I offer two country-specific case studies-Brazil and Spain-as a success and a failure, re- spectively. Sony's LLP history is an attempt to operate what I call flexible localization, or a market-by-market, manager-based system that responds to local market condi- tions. Yet what has emerged is a reactionary, short-term approach that has been largely unsustainable and has failed in many territories. Overall, SPE's LLP strategy functions as a case study of the uneven and inflexible localization and "conflicting interests" within global expansion, characteristic of the conglomerate Hollywood era.11

Biz without Borders? A Cinema beyond Hollywood. In 2010, Chico Xavier (Daniel Filho) and Nosso lar ( Astral City: A Spiritual Journey, Wagner de Assis) became two of the highest-grossing films in the history of Brazilian cinema. While the former was based on the life of the nation's most famous and controversial medium, the latter was an ad- aptation of Xavier's novelized conversations with spirits from the "other side." Rooted in particular Brazilian nordeste (northeastern) and religious cultures, the films touched on the espiritismo (spiritism) movement, as well as larger aspects of regional cultures. In addition to their production by the local companies Lereby and Migdal, as well as the participation of Brazil's media conglomerate Globo, Hollywood studios coproduced and distributed the films locally. Sony's involvement in Chico Xavier and Fox Interna- tional Productions' participation in Nosso lar point not only to a cycle of highly popular Brazilian blockbusters but also to products of each studio's LLP strategy.

Deborah Schindler, Sony's former head of international production (from 2008 to 2010), described the current industrial climate as "a changing universe. . . . [ T]here's a world beyond Hollywood for the film business."12 The challenge for the studios was figuring out how to approach this changing film universe. As one former Sony executive suggested, there was potentially money to be made in local filmmak- ing, if only the studios could figure out the best model, particularly since international markets beyond the United States are now the dominant profit center.13 Since the 1980s, gross profit from international markets has steadily increased; international or foreign box-office returns account for 67 percent, or US$21.2 billion, of its members' earnings, whereas domestic (United States and Canada) returns account for only 33 percent, or $10.6 billion. Not surprisingly, the domestic and international box offices are conceived of not as separate but as integrated, symbiotic units of the SPE media machine at best. Similar to the convergent relationship between Sony's production and home-entertainment groups, the various domestic and international film divisions claim that they work to create complementary content. Whether they are producing films for global or for local audiences, the LLP strategy assumes that production for one group supplements production for the other. Significantly, LLPs on a wide indus- try scale are a recent phenomenon.14 Executives gradually came to realize the impact of media content in local languages, or-as media scholars such as Joseph Straubhaar have been arguing for decades-they discovered the power of "cultural proximity" for media audiences.15

Although each studio approaches local production differently, overall the LLP strategy operates on a market-by-market approach, primarily focused on coproduc- ing relationships with local producers for smaller markets and limited release. Several factors are considered before entering a territory and setting up a production unit, including available tax incentives, theatrical infrastructure, economic growth, and the- atrical audiences. Many times, lucrative incentives (as in the case of Brazil) or rapidly expanding theaters (as in China or India) are enough for Sony or Twentieth Century Fox to enter into local productions. Most important, a film must recoup its cost within the local market, because LLPs are not expected to travel (nor do most studios have the resources to distribute them internationally). The budgets and theatrical releases of LLPs are significantly smaller than those of mainstream studio fare. For example, Chico Xavier cost R$12 million (US$6.6 million today).16 According to Gareth Wigan, former head of Sony's International Motion Picture Production Group, "Budget ceil- ings are determined the same way they are [ in the US market]-we're looking at what the traffic can bear. If we make a movie in a territory, it has to make back its money in that territory."17

As an industry strategy, LLPs unfolded in two phases. SPE was the first conglom- erate to establish a local production division in 1998; it was headed by Wigan. This division stems from SPE's globalizing efforts since the early 1990s as the company moved into satellite television (HBO Ole and Sony Entertainment Television) and in- ternational film acquisition (Sony Pictures Classics) across Asia, Europe, and Latin America. Within industry discourse, Sony became the pioneer of LLPs, especially after the highly successful worldwide run of Crouching Tiger, Hidden Dragon. By 1999, Warner Bros. had appointed Richard Fox to lead an international production unit, expanding from two to a dozen territories over the following decade. Warner Bros. has been praised in the industry for having one of the most productive LLP strategies dur- ing the 2010s. Warner Bros. attributes its most successful LLPs, under Richard Fox's leadership, to use of the company's vast global infrastructure from theatrical to home entertainment, including the Torrente series (Santiago Segura, 1998, 2001, 2005, 2011, 2014) in Spain and the German Kokowaah film series (Til Schweiger, 2011, 2013).18

Sony, Warner Bros., and more recently Twentieth Century Fox all structure their LLP units around a country-manager system.19 Each company has a head or execu- tives of international production located at their Los Angeles-area headquarters, but local managers run individual territories and operate as stand-alone, but not neces- sarily autonomous, production units. Many times, these units grow out of their local distribution offices and are run by general managers. Each general manager oversees local production staff within his or her office, hears pitches from local producers to participate as minority producers, signs off on the theatrical cut, and communicates with his or her division head in the United States. In an interview, Warner Bros.' executive VP of international Richard Fox describes their approach "not as comple- mentary or supplementary. [ LLPs] are now a core business." According to Fox, 99 percent of the local films do not travel outside of their home market, and it may take two to three years to get full value from their investment through theatrical and home entertainment.20 Because LLPs are not expected to travel internationally, there is even more pressure to recoup costs during domestic theatrical runs.

After the creation of Fox International Productions ( FIP ) in 2007, Disney and Uni- versal established the next wave of short-lived LLP units over the following two years. While an executive located in Los Angeles and London headed the international pro- duction divisions, Disney's and Universal's respective LLP units operated differently from the country-manager system. For example, Universal relied more on joint alli- ances with local production companies and less on a local general manager choosing and overseeing potential coproductions. Instead of a general manager running a local office in Russia or Brazil, former division heads, such as Universal's Christian Grass and Disney's Jason Reed, served as contacts for individual filmmakers. For example, Universal developed a number of formal alliances in markets where it eventually be- gan coproducing LLPs. Following an earlier $100 million, five-picture agreement with Cha Cha Chá Producciones-of Guillermo del Toro, Alejandro González Iñárritu, and Alfonso Cuarón-in Mexico, the international division established multipicture deals with Fernando Meirelles's O2 Filmes in Brazil and Timur Bekmambetov's Ba- zelevs Productions in Russia.21

In addition to alliances, FIP and Disney have also developed a number of LLPs by remaking studio properties for local audiences. In the case of FIP, any project the studio produces locally becomes a "library title." The company retains remake rights and increasingly remakes successful local productions within other LLP units or as English-language versions.22 From developing a Hindi version of FIP's Bride Wars (Gary Winick, 2009) to remaking the transmedia property High School Musical (Kenny Ortega, 2006, 2007, 2008), the studios localize previously successful English-language content for smaller markets. Disney remade High School Musical into High School Musical: O desafio (César Rodrigues, 2010) in a number of territories, including Mexico, Brazil, Argen- tina, and China. Before FIP's LLP unit opened, then general manager Larry Kaplan handled international production, including animated features for the Chinese and Indian markets. Kaplan pointed to the reasoning behind these types of coproductions: "It's important to export the Disney brand. We're obviously interested in economic results but we're also interested in showing people the magic Disney brings to film."23 Although Disney tries to bring the "magic" of its brand to the local language of par- ticular markets, the results do not always translate or resonate with audiences. While the Latin American versions recouped costs, the Chinese High School Musical (Ge wu qing chun; Shi-Zheng Chan, 2011) proved a box-office disaster, resulting from miscommu- nication with local producers and cultural blunders on Disney's part, namely Disney's insistence on featuring basketball instead of a more locally popular sport.

In general, many of these international production divisions describe their LLPs as having a bottom-up approach to filmmaking.24 This is distinguished from the tradi- tional top-down approach to producing and distributing English-language films inter- nationally, for example, through SPE's motion-picture group, including Sony Pictures, Columbia Tri-Star, and Screen Gems divisions. Thus, the LLP strategy exemplifies a contrast to SPE's primary focus on big-budget, tentpole pictures. Examples of Sony's global blockbuster strategy include the recent reboot The Amazing Spider-Man (Marc Webb, 2012) and the multicountry travelogue Eat, Pray, Love (Ryan Murphy, 2010), both intended for wide theatrical release in a global market.25 In fact, many of these films opened in overseas markets days or weeks earlier than in North American the- aters to capitalize on international audiences first.

Yet LLPs have a multifaceted relationship to mainstream, English-language prod- ucts released by the studios worldwide; they provide a channel for recycling or local- izing studio contents, and they offer access to new creative talent. Fox International Productions head Sanford Panitch claims, "We are finding talent at an embryonic stage. Some of the most exciting filmmakers are now in the international area." In fact, Twentieth Century Fox successfully released the Russian vampire films Night Watch ( Nochnoy dozor, 2004) and Day Watch (Dnevnoy dozor, 2006) internationally, leading the films' director, Timur Bekmambetov, to direct the Universal Angelina Jolie vehicle Wanted (2008) and to secure a multipicture deal with Universal's LLP unit.26 In ad- dition, creative talent is recruited directly from successful LLPs. After starring in the Sony Spain LLP Di que sí ( Juan Calvo, 2004), actress Paz Vega was asked to audition and went on to star in Sony Pictures' Spanglish ( James L. Brooks, 2004).

English-language films are still the conglomerates' biggest business, particularly as they still hold the majority of local market share throughout Europe and Latin Amer- ica. As Warner Bros.' Richard Fox suggests, "The priority, obviously, is the [English- language] studio films. We don't want to overproduce or over-acquire locally at the risk of hurting their marketing and distribution."27 While in some cases LLPs may compete with or take up distribution space and resources in the local market, most im- portant, they are intended to complement international distribution channels already lined up with mainstream studio product. This practice arose as the studios tried to capitalize on growing international audiences by expanding their product lines.

Frank Rose regards the LLP strategy as the emergence of a new two-tier system in global filmmaking, one that largely benefits the conglomerates:

English is the language of the international blockbuster, but lower-budget pictures can be made in almost any language for the home market, and a few . . . will even become international hits. Hollywood, with its vast corporate re- sources, can call the shots in both tiers. All it has to learn is how not to reduce the world to cultural mush.28

From a largely political economic and corporate institutional perspective, a two-tier system furthers Hollywood's historically hegemonic position. Studios managed, albeit not always successfully, to leverage big-budget English-language productions into a string of European coproductions popularly known as "Euro pudding."29 However, LLPs have allowed them to expand into smaller, more localized productions. As the former Motion Picture Association of America (MPAA) vice president for Latin Amer- ica explained, the studios "wanted to expand on their 90 percent theatrical market share" in most Latin American countries to something close to 100 percent.30 From the point of view of media scholars such as Miller and Wasko, Sony's or Warner Bros.' growing resources, expanding locations, and controlling media distribution across the globe continue to resemble earlier definitions of media imperialism.

Yet in practice, the LLP strategy is not a cohesive corporate plan to create a mo- nopoly of global film production and distribution. Each Hollywood studio has its own blueprint for what constitutes a LLP, with some (e.g., Warner Bros., Sony, and Twentieth Century Fox) proving more successful than others (e.g., Universal, Disney). No matter how the strategy is imagined, local productions are a product of the conglomerate era as studios scramble to adapt to growing international box offices and diverse audiences. The success (and many times, failure) of a strategy depends on local industry conditions and particularly on an ability to adapt to the film market, develop local partnerships, and speak to its diverse audiences. SPE's implementation of Sony's LLP strategy is messier and more inconsistent than corporate pronounce- ments would suggest.

How Sony Sees It: Defining Local-Language Productions. In 1997, SPE execu- tive Jeff Sagansky stated at a Los Angeles Entertainment Symposium, "My belief is that the days of 'if we film it, they will come' are either over or soon will be. The world is changing, and we have to change with it [or we] will pay a terrible price."31 Sagansky criticized the traditional Hollywood-centric, one-size-fits-all approach to overseas ter- ritories and instead distinguished Sony's future strategies: "Today, I see two new boats pulling out, one for Asia and one for Latin America. . . . [A] company that aspires to market leadership on a global basis-and I work for one, Sony-better be on those boats."32 By the following year, SPE had developed an LLP strategy to enter both of these regional markets. The case of Sony reveals the first industry attempt at an LLP strategy across three particular phases and the difficulties resulting from a market-by- market approach.

As informed by my institutional focus and industry interviews, LLP strategy emerges as a complex process involving Sony's corporate culture, local industry condi- tions and cultures of production, and creative decision making. There is no one recipe or template for producing LLPs. On a film-by-film and market-by-market basis, the lo- cal production unit in Germany, Brazil, or India becomes involved with local projects. This may entail acquisitions for distribution rights, development, and coproduction deals depending on local industry conditions, such as available tax incentives or copro- duction policies.33

On the one hand, the "local" part of the strategy comes from a reliance on partner- ships with local talent and creative professionals to coproduce, cofinance, and codevelop film projects throughout Europe, Latin America, and Asia.34 Within each territory, the local Sony production office usually serves as a minority partner, supplying less than 40 percent of the production costs. Sony's local offices benefit from these collaborations because of their partners' on-the-ground knowledge and professional relationships, and insider knowledge helps with identifying material and developing partnerships that work within the cultural and economic context for a particular market.35 Yet Sony gains more than the practicalities of these partnerships; it also cultivates local cultural capital with the coproductions. This capital stems from the global cachet of its brand, based on discourses of "quality," and its financial and cultural investment in the local industry. Many times, as Michael Lynton's Wall Street Journal op-ed "Globalization and Cultural Diversity"36 illustrates, Sony executives employ this local capital as a promo- tional strategy touting the celebratory nature of globalization.

On the other hand, many Sony professionals working in international territories categorize "local language" films outside of the English linguistic region. English- language films are considered global, not local, whether they are American or from any other Anglophone location. While most US trades define LLPs as anything outside of the United States, Sony international employees do not consider Sony's London-based operation and UK coproductions, such as Damned United (Tom Hooper, 2009), part of the LLP strategy.37 One Sony executive explained that this linguistic differentiation is a result of the historical dominance of English-language media and imperialist bag - gage outside of Anglophone markets. Significantly, she argued that English-language productions, despite their US or UK origins, benefit from a linguistic ease of travel and level of cultural capital. ( However, this does not account for the difficulties many UK media professionals experience in financing and distributing films, both within their own countries and globally.)

Most significant, English-language films benefit from a wealthy elite audience, both within the United States and globally, whose first or second language is English. In the case of many markets in the Global South, consuming English-language content functions as a marker of social-economic status and global cosmopolitanism. There- fore, English-language films and their producers benefit from a cultural capital due to consumption practices, cultural markers, and market economics in ways that local- language films do not. During the interview process, conversations with local studio executives at times led to lively side discussions about English-language media such as Mad Men (Lionsgate Television, 2007) or the films of Christopher Nolan. These asides not only allowed the Spanish or Brazilian manager to perform his or her status as the privileged cosmopolitan consumer but also reinforced the tension between the circulation of the studio films and their own local productions. In light of the global circulation of English-language content across media industries, many Sony profes- sionals outside of the United States are basing their understandings of local-language production on more complicated media flows, consumption patterns, and ambiguous geographical regions than earlier geolinguistic theories would assume.38

One figure associated with this large-scale local language initiative was then- SPE chair John Calley. His 1996 installation as CEO is understood within internal cor- porate memory and industry trade stories as the beginning of expansive localization efforts. Iona de Macedo credits Calley with making the Sony production motto "Think Globally, Act Locally" the driving force for rethinking the company's international strategies during this period.39 Another executive behind developing the wide-scale implementation of Sony's LLP policy was Gareth Wigan, the co-vice chair of the Co- lumbia TriStar Motion Picture Group from 1997 to 2008. As head of consolidated in- ternational operations, then-CEO Lynton credits Wigan for "almost single-handedly" building Sony's international film business and "making him a real pioneer in our industry [since] he recognized early on the power of the global market." Wigan over- saw each territory, green-lighted projects, and defended his role with local Sony offices as a partner. He described Sony's creative relationships as collaborative rather than as carpetbagging.40 Wigan also saw Sony as contributing to local economies and pro- ducing genuinely local films: "Our goal is to put down roots and become part of the native talent pool and culture."41 Significantly, the language and logic behind the LLP strategy from early on distinguished it from the wide-release, global-blockbuster model as an approach to cultivating local markets through creative and financial relation- ships. As a response to globalization discourses, during this decade, Sony mobilized the early central figures behind LLPs to use local language as a promotional (and at times defensive) strategy for the global expansion of its filmed entertainment operations.

During its earliest phase (1998-2001), SPE established LLP operations in what it categorized as three key markets in Asia, Latin America, and Europe-Hong Kong, Brazil, and Germany.42 Each operation was led by a local manager-Iona de Macedo in Brazil for Sony do Brasil/Columbia TriStar, Andrea Willson in Germany for Deutsche Columbia TriStar Filmproduktion, and Barbara Johnson in Hong Kong for Columbia Pictures Film Production Asia. Located at the Babelsberg Studio in Pots- dam-Babelsberg, Deutsche Columbia TriStar made a handful of films, including the box-office success Anatomie ( Anatomy; Stefan Ruzowitzky, 2000).43 As Wigan argued at the time, "This is not Hollywood coming to work in Europe. . . . [ These] are genuinely European films."44 While the initial deal with the state's film commission Medien- board Berlin-Brandenburg was to last seven years, SPE closed the operation in 2003 because of a waning German box office and rising overhead costs.45

Within six months of launching the German unit, SPE announced the new Hong Kong-based production company Columbia Pictures Film Production Asia.46 The production unit resulted in partnership ventures such as director Stephen Chow's Kung Fu Hustle (2004) and participation in Sony's most successful LLP to date-Crouching Ti- ger, Hidden Dragon. Released by Sony Pictures Classics and Columbia Pictures Asia, the latter film grossed more than $209 million worldwide and became known as the most lucrative template for LLPs because of the successful widespread release outside of its cultural-linguistic region. The film is credited with igniting widespread "ambitions in the world of local-language production" for a film that could circulate as a "glocal" blockbuster characteristic of a growing pan-Asian media market and could perform strongly abroad in the US indie circuit.47

To expand its LLP strategy beyond the three early production units, SPE began an aggressive second phase of growth (2001-2007). Because of its growing number of operations and local relationships, Sony's LLP operations were described as "the most ambitious worldwide" at the time.48 It established production operations across Spain, Italy, France, Mexico, India, Japan, and Russia as Wigan oversaw a dozen Sony LLP operations throughout Europe, Latin America, and Asia. The European LLP units-specifically Spain, discussed here-show the challenges faced by Sony in its efforts to reconceptualize the model across a diverse regional media market and fluctu- ating economic conditions. As the LLP strategy spread further, the Los Angeles-based executives tried to become more involved in daily operations. This micromanaging led to what one former Sony executive called a "haphazard approach," because local producers were not given complete creative or financial control.49

In 2007, two events signaled the third phase (2007-present) and a geographical reimagining of Sony's LLP strategy. First, all existing LLP units were reorganized and consolidated under a new group-International Motion Picture Production Group- with Deborah Schindler replacing Wigan as president. Within two years, Schindler resigned. A number of closures followed the consolidation. That fall, Sony closed Co- lumbia Films Producciones Españolas in Madrid and moved the European production headquarters back to Berlin. This move resulted from Spain's declining domestic the- atrical market share, which was averaging between 10 and 13 percent, and dwindling distribution windows.50 Fluctuations in local theatrical attendance and local financing possibilities across Europe led to a shift from Germany toward Spain and back to Ger- many in the same decade.51

The Sony case shows the difficulty of a global conglomerate overseeing and sus - taining specialized local units. A key problem was SPE's lack of investment in local infrastructure (both personnel and physical operations) that stemmed from conflicting institutional priorities among divisions. Many in the industry describe Sony's unwill- ingness to build strong units with resources necessary to function strongly in the lo- cal market. A number of former Sony professionals argued that SPE is inherently a Los Angeles company that runs distribution channels worldwide. Sony attempted to integrate its production culture into an array of local industries, expanding quickly across Asia, Europe, and Latin America by the early 2000s. The main problem was complete inflexibility in management and overseeing most LLP operations from the United States (e.g., green-lighting, accounting, marketing). As the following two cases of Brazil and Spain show, the local conditions and infrastructure in each territory also determined the success of individual LLP units. By getting closer to media profession- als on the ground, the tensions between a global approach and local factors reveal the multifaceted factors and rising tensions that emerged from this local strategy.

Sony do Brasil. Sony Pictures Entertainment entered the Brazilian film industry with its LLP strategy during an important period of rebirth and economic expansion in the mid- to late 1990s. The country of two hundred million people is one of the fastest- growing economies, with rising incomes, lower unemployment, an expanding mid- dle class, and increasing foreign investment-largely credited to the administration of President Luis Ignacio Lula da Silva (2003-2009).52 In the midst of this growth, the Brazilian film industry has undergone a pivotal restructuring from a nationally focused, state-supported enterprise to a more globalized, commercialized, incentive- driven system.

During the early 1990s, local film production decreased to zero after state-sup - ported film mechanisms were removed, and Brazil lacked any organized funding struc- ture. In the following years, the Brazilian congress passed key legislation to alleviate these audiovisual funding problems, namely Lei do Audiovisual (Audiovisual Law, Lei Federal No. 8.685/93). The law's article 3 operates as a mechanism of investment and encourages film coproduction. Many credit this law with increasing privatized invest- ment in Brazilian cinema and, in turn, sparking a retomada (rebirth) in the 1990s of national cinema, with thirty to fifty films annually. Specifically, article 3 permits foreign distributors with local subsidiaries, such as Sony or Warner Bros., to invest up to 70 percent of their local taxed income from their English-language products in Brazilian independent audiovisual projects.53

According to an industry professional working in audiovisual policy, article 3 was designed to focus on and attract Motion Picture Association (MPA) investment. At first, most MPA studio members, known as os majors (the major studios) within the in- dustry, were not interested in using this mechanism. Because of different institutional priorities and early LLP initiatives, Sony and Warner Bros. were the first studios to take advantage of the financing scheme, with some success by the late 1990s. Sig- nificantly, the legislation had changed slightly by the 2000s to reframe the investment incentive. Os majors have the option either to invest a portion of their taxed income into local coproductions or to pay taxes on the same base to the Contribution to the Development of National Film Industry (Contribuição para o Desenvolvimento da Indústria Cinematográfica Nacional, or CONDECINE) fund. Since the remittance of profits earned on audiovisual products in Brazil is subject to this withholding tax, the studios that choose to invest in a local independent production are exempt from the CONDECINE payment.54

Sony do Brasil has been one of the key institutions actively involved in film invest- ment since the retomada production boom, coproducing two to three local language productions per year.55 After the successful theatrical release of a string of LLPs dur- ing the 2000s, the studios saw this investment mechanism as a way to retain rights to theatrical, video, or television options for these possibly lucrative productions. Whereas article 3 serves as the main funding mechanism for Sony's local-language productions, SPE views Sony do Brasil as primarily a self-financing operation.56

With a healthy economy and growing local film audiences and theatrical spaces, the Brazilian industry produced and distributed 135 films in 2010 and continues to capture, on average, between 10 percent and 20 percent of the theatrical market share annually. As tables 1 and 2 show, MPA members are involved in producing and dis- tributing both English-language and Portuguese-language titles. It is important to note that only 30 of the 154 films released by os majors classify as LLPs. In other words, the local productions account for about 20 percent of all their theatrical activities. The English-language film releases dominate the studios' Brazilian theatrical slate, with each company distributing 20 to 24 films per year locally. Aside from gross profits, the "studio films" like The Karate Kid (Harald Zwart, 2010) show on 250 to 400 screens, capture an average of two million spectators, and gross an average of R$17 million.

However, the market for Sony's and other os majors ' local-language production expanded during the 2000s, and LLPs' theatrical release models are changing. If a screen release of 200 to 250 was the standard in the 2000s, a handful of bigger-budget LLPs with "commercial potential" may now open on 400 to 450 screens. Significantly, several independent producers note how resistant some of the studios were to expand- ing beyond their set release models until the success of these LLPs. Sony's Chico Xavier and FIP's Nosso lar followed this newer release model and, in turn, captured larger audience shares (three million to four million per picture) and higher ticket returns (R$30 million-R$36 million).

National theatrical distribution determines the success of most Brazilian LLPs. Improved economic conditions have led to growing moviegoing audiences and more theaters built in midsize cities and rural areas. The average audience member histori- cally has come from the upper-middle and upper classes because of the high price of admission (R$8-R$12) and the concentration of theaters in urban centers such as Rio de Janeiro, São Paulo, and Brasília. After 2000, moviegoing demographics have shifted to include wider socioeconomic and geographical diversity. While Brazil is still one of the most underscreened film markets in the world, by 2011 the number of screens had increased to 2,200, with an estimated 250 additional screens built by the end of 2012.57 Along with the demand for more feature-length motion picture releases, the Brazilian film audience has grown in the past two decades. In an interview with Screen Daily writer Elaine Guerini, Steve O'Dell, senior vice president of Sony Pictures Inter- national Releasing, suggested:

Brazil is one of the markets in the world with the most promise for growth for our industry. If this growth successfully reaches more economic classes, which right now can't afford to go to the cinema-and we're talking about tens of millions of people-we could see incredible growth and bring entire new audiences back to the movies.58

One strategy to meet this growing demand for local content has been Sony do Brasil's LLP strategy.

Located in the media capital of São Paulo, Sony do Brasil consists of a general manager and three director-run divisions: theatrical, home entertainment, and televi- sion. Sony do Brasil has been one of the most prominent coproducers and distributors, actively coproducing since the 1990s production retomada. Between 1994 and 1997, the unit produced ten local-language productions, including Tieta do Agreste (Tieta; Carlos Diegues, 1996), O que é isso, companheiro? (Four Days in September; Bruno Barreto, 1997), and A guerra de Canudos (The Battle of Canudos; Sergio Rezende, 1997). However, the production division relied on outside consultation to vet projects, leading to a poorly managed local production strategy. Most films lost money, and two projects were never released.

The most recent version of the Brazilian LLP operation initially was restructured as a result of Sony's failed attempt at Brazilian television coproductions. For a short period, Sony Television offered a production service and program-format sales to lo- cal television networks in Latin America. It quickly discovered the political, economic, and cultural problems of trying to sell a different production model to industries with strong local institutional and production practices. Iona de Macedo, Sony's former vice president of television in Latin America, describes the tensions and "clash of pro- duction cultures" between Sony and its Latin American partners. The Latin American television model Sony had created worked better at distribution and sales than at pro- ducing local content. Asked why the television coproduction initiative did not work, de Macedo contended:

You can't go in and produce with television stations that have been doing it the same way for seventy-five years and try to impose another way. We tried and it wasn't the right model. The right model was what we do with the game shows: that we come, we say how it works, we consult, and they do it the way they know how to do.59

According to one of the producers with whom I spoke, the local partners criticized So- ny's production model as inefficient and not specific enough to deal with local market conditions and audiences. In turn, Sony Television changed the regional model back to selling formats and exports with a centralized office based in the Spanish-language media capital, Miami.

Because of an inability to compete with the well-established national television producer Globo, also Brazil's most powerful media conglomerate, the local Sony cre- ative professionals and resources, including de Macedo, were redirected to a new São Paulo-based team coproducing local-language films. In turn, the Brazilian market served as a testing ground or early experiment for the company's regional television coproduction strategy. When the television production model failed in Brazil, Sony International executives shifted the people and resources from the Latin American television division to their Brazilian film operation.

After this restructuring of the LLP division in 1997, all production decisions were made by the various division heads at Sony do Brasil: Rodrigo Saturnino Braga (gen- eral manager), Iona de Macedo (production), Wilson Cabral (home video), and Dorien Sutherland (television). To green-light investment in a new project, all three divisions of Sony do Brasil have to approve the script, and executives in the New York City and Culver City, California, international production offices approve the prints and advertising budget by email.60 This is not always the process for approving LLPs. In the case of Spain, green-lighting occurred after a formal pitch to SPE executives in the United States. Until 1999, Sony do Brasil was the only MPAA studio coproduc- ing local-language films. Three filmmaking models emerged at this point: (1) projects by first-time directors with experience in commercials or television (e.g., Cao Ham- burger's Castelo Rá-Tim-Bum, o filme [1999], originally developed as a television series), (2) alliances with Rede Globo and its television franchises (e.g., the films developed by comedian Renato Aragão), and (3) projects with established old-guard filmmakers such as Bruno Barreto and Carlos Diegues.

By the early 2000s, Sony had invested in more than half of the popular and com - mercially successful local films, including Deus é brasileiro (God Is Brazilian; Carlos Di- egues, 2003), Carandiru (Hector Babenco, 2003), Cazuza (Sandra Werneck, 2004), and Dois filhos de Francisco (Two Sons of Francisco; Breno Silveira, 2005).61 Since Sony do Bra- sil was the only filmed entertainment division of a transnational media conglomerate producing LLPs, it had complete control of the selection of projects and the flexibility to move into development. It dominated the market during the 1990s, and de Macedo described the situation as win-win.62 In 2004, Sony do Brasil made more than 45 per- cent of its revenue from local productions, which today includes an average of three productions per year.

Two of Sony do Brasil's most commercially successful coproductions were Chico Xavier and Dois filhos de Francisco. Chico Xavier earned more than R$25 million, with 2.8 million spectators, and Dois filhos de Francisco earned R$36.7, with more than 5 mil- lion spectators. Described locally as blockbusters brasileiros (Brazilian blockbusters), these productions carry comparatively little financial risk for Sony do Brasil, the minor- ity producer. The production cost for Chico Xavier-R$12 million (US$6.6 million in 2013)-originated mostly from financial incentives such as article 3 and other invest- ment mechanisms. Many Sony employees and Brazilian professionals, in turn, do not consider the investment of os majors "real" money.63 Furthermore, local production and marketing costs typically are less expensive than the average English-language film budget of $106.6 million, which does not include marketing costs.64

Overall, there are several reasons that the Brazilian LLP unit continues to partici - pate in coproductions. Unlike the other LLP units, the Brazilian LLP strategy grew out of trial and error, a long-term process of adapting to local market conditions. Instead of being shaped solely by SPE's management structure, the Brazilian LLP unit benefited from a booming national production cycle and the opportunity to cultivate long-term creative relationships. On the one hand, SPE leaves the office alone, ac- cording to Saturnino Braga. This is largely because of the tax-incentive systems that provide funding for Sony's participation in local projects. On the other hand, Sony has a limited creative and financial voice in the Brazilian partnerships. As most Sony do Brasil employees suggest, Sony do Brasil is a semiautonomous unit that continues to coproduce two to three films per year, despite the recent evolution of Sony's overall strategy.

Columbia Films Producciones Españolas. Based in Madrid between 2001 and 2007, Columbia Films Producciones Españolas produced only two LLPs in Spain and later expanded to oversee European coproductions in France and Italy. During the 2000s, an economic recession, online piracy, and a shrinking theatrical box office and DVD sales hit the Spanish industry hard. While Sony arrived full force with its LLP unit and strategy in place, building from a precedent in Brazil, the Madrid opera- tion and Los Angeles-based international division headquarters began to face an un- stable domestic market shortly after its arrival. Spanish popular commercial cinema has struggled domestically for financing and audiences. In a country of forty-six mil- lion, around 20 percent of Spain's population visit a movie theater monthly. Yet the market share of Spanish films remains around 10 percent, in contrast with that of the English-language films that have historically dominated the 3,874 screens in this local market.65 Although Spain may be among the most active film industries in Europe, producing between 100 and 176 local projects in the 2000s, audiences for both theat- rical and home entertainment are disappearing. Many of the challenges the Spanish media industries are facing are symptomatic of the larger economic stagnation reshap- ing the national climate; unemployment had reached 21 percent nationwide and 45 percent for Spanish youth by 2011.66

In 2001, when SPE established Columbia Español together with Sony Pictures Re - leasing International España, the company distributed eighteen local films and forty- seven English-language and non-Spanish-language films in Spain the following year. As Sony's production and distribution strategies succeeded in other territories such as Brazil, the international division expanded its LLP model to Madrid because of the strong domestic box office and successful acquisition and distribution of Spanish films by Sony Pictures Classics. Then, SPE executives brought de Macedo, vice president of production for Columbia TriStar International Television in Latin America at the time, to open a film production office in Spain in 2001. Instrumental in reorganizing LLPs for film and television in Brazil, de Macedo became the president of Columbia Films Producciones Españolas, based in Madrid. Sony expanded LLP operations to Spain because, according to de Macedo, "at the time, Spain was a very dynamic mar- ket. . . . [T]here were a lot of subsidies and [Sony tried] to replicate the marriage of talent and distribution we had in Brazil." 67 Between 2001 and 2003, five local films achieved more than one million tickets sold.68 Columbia Español structured its pro- duction strategy to partner with leading Spanish production companies in the local industry. At the time, Wigan suggested, "Our financial goal is for the films to show a profit in their own territories. . . . [W]e are not here to steal Spanish talent but to sup- port it and give it work here."69

The Columbia Español model represents the typical Sony LLP unit and the de - cision-making process. Unlike the incentive-driven Brazilian unit, the Spanish pro- duction unit relied on Los Angeles headquarters for financial and creative support. Local incentives did not subsidize the LLPs produced in Spain, and all production and marketing costs required a stricter process of approval from SPE executives. First, Columbia Español did not have the flexibility or ability to access the various financial sources typical for most Spanish coproductions. The Madrid production unit did not qualify for many of the public subsidies available to independent producers in the lo- cal industry. In this industrial context, LLPs were equated with Hollywood films and were thus ineligible for the national and regional subsidies that typically provide local financing. Second, SPE's management team in Los Angeles was not interested in fight- ing to secure those subsidies. As de Macedo describes, "Dealing with subsidies is so foreign to the legal structures of the studios" that doing so was not even an option for European LLPs.70

Sony initially planned to provide all financing for the Columbia Español produc - tions. The local creative team identified film projects and worked with independent producers from Madrid. This strategy led to Columbia Español's first film under the Madrid unit, Di que sí. Many involved with Di que sí describe the production as a "Hol- lywood process." Local producer Zebra Producciones partnered with Columbia Es- pañol on the opposites-attract romantic comedy, with Columbia Español contributing financing, prints, and advertising costs. Sony Pictures Releasing distributed the film in theaters, and Sony Pictures Home Entertainment released the DVD.

De Macedo detailed the extent to which SPE executives gave extensive notes on the production, from ways to polish and commercialize the script to tips on styling the set design. They also relied on a "bloated" prints and advertising budget to mar- ket the film (overspending, according to Spanish industry marketing standards) and a studio chain-of-command green-lighting process atypical of Spanish independent filmmaking.71 Specifically, de Macedo recalled having to visit the film set and make prop changes to the production. The SPE executives wanted the film to look more expensive, more "Hollywood," and more like a Sony product.

This "Hollywood process" is apparent in two ways. First, the relationship with the Spanish subsidiary from the financial and contractual side of the productions re- mained highly micromanaged by Sony's international production headquarters in Los Angeles. For example, to receive approval or to green-light the project, de Macedo and the local Sony general manager traveled to Los Angeles to pitch the business plan, including budget, package, and talent, to Calley and various SPE division heads, including Wigan, as well as executives from accounting, distribution, and television.72 Many of the key decisions were made outside of Madrid by a number of executives who were not actively working in the local industry. A former Sony executive based in Los Angeles suggested that the biggest problem was SPE trying to manage this unit and its coproductions remotely. Instead, the Spanish and other LLP units should have been left alone and run by "indigenous voices."73 Second, in working with Zebra Pro- ducciones, the Madrid office had not only a central management and financial role but also a creative role. In decision making, as both coproducer and distributor, Columbia Español had complete access to the editing room, with de Macedo exercising ultimate editing rights-or "final cut."

When the German unit closed in 2005, the European LLP operation headquarters consolidated and relocated in Spain. In turn, the Madrid office expanded to become the regional production headquarters, overseeing operations in Spain, France, and Italy. After this restructuring, the Madrid headquarters was expected to take a more regional approach to LLPs, overseeing and integrating production and distribution offices across the European region. Unlike the earlier three LLP units, the newly re- organized European market was expected to function as a regional site overseeing a diverse set of production cultures, policies, financing schemes, and local audiences. Not surprisingly, these management expectations were not sustainable and produced only one more Spanish LLP before closing in 2007.

Ultimately, the Spain LLP unit failed as a result of internal conflicts, external con- ditions of the local economy, and dwindling audiences. As Spanish theatrical atten- dance and DVD sales declined sharply in the 2000s, expectations for a successful LLP release in the local market became harder to meet. Theatrical audiences for Spanish films declined steadily from 26.2 million in 2001 to 21.2 million in 2005 and then to 12 million in 2010. In 2010, SPE's CEO Lynton announced, "People are downloading movies in such large quantities that Spain is on the brink of no longer being a viable home entertainment market for us."74 Significantly, between 2006 and 2010, the an- nual number of Spanish productions released through home-entertainment formats declined from 6,695 to 3,843 as DVD sales fell 60 percent.75 Furthermore, piracy has become a primary mode of film consumption for local audiences, who use digital transferring to watch everything from English-language blockbuster films to Spanish indie cinema. In a national context, Spanish theatrical ticket sales amount to euro100 million every year, while the estimated number of films downloaded illegally amounts to euro400 million.76 In the global context, by 2008, 20 percent of all illegal digital down- loads for the top-grossing films worldwide originated from Spain.77

Sony's production efforts in Europe illustrate the difficulties of maintaining a vari- ety of approaches with many voices involved.78 In general, one former local Sony em- ployee described the relationship between LLP units and distribution in many of the European territories as an "unhealthy dynamic." Many times, creative management had to "defend the product against the powers that be," namely their colleagues, the local distributors.79 For example, the general manager for distribution in Spain oper- ated from a separate office and employed different management structures from the production unit (unlike the Brazilian unit, which integrated production and distribu- tion in the same operation). Much of the tension across Sony's European distribution and production offices came from the separate leadership structure and competing ideas about how best to sell LLPs to local audiences. De Macedo suggested that Sony's Spanish "distributors were invited to participate actively in the production process when their job is really to look at a finished film and release it. Problem number one. They were not only invited to participate in the process but also the green-light only came in the US if the numbers closed."80 Spanish LLPs were expected to perform at the same theatrical numbers as Sony's English-language films.

Yet creative differences with the Columbia TriStar executives in Los Angeles also ensued. Both the Spanish distribution operation and Sony Pictures Releasing Interna- tional in Los Angeles had to sign off to green-light any European LLP and provide it with financing. Particularly in Madrid, the LLP unit clashed on a number of occasions with US-based supervisors over the coproduction strategy's direction. One former Columbia Films Producciones Españolas employee recalled, "Sony LA was not on board with films the Madrid office wanted to develop. LA would not green-light cer- tain projects" that did not meet its LLP formula, which in the case of Spain prioritized comedies.81 The employee explained the difficulty, and ultimate inability, of getting a historical period film made under the LLP model.

In 2007, SPE consolidated its international production offices under one division, Sony International Motion Picture Production Group (IMPPG), located in Los An- geles. Seemingly a final decision sent down from cochairs Amy Pascal and Michael Lynton, the restructuring aimed both to consolidate management structures across the various local offices and to cut operation costs. Shortly after, the new international division closed the Spain office and moved the European production headquarters back to Germany. While many Spanish creative executives blame piracy as a key rea- son for the closure of Sony's LLP unit, the tensions between Los Angeles and Spain over local-language operations also contributed to its closure. Today, the Spain-based Sony operation remains solely a distribution arm of the Sony Pictures International group, acquiring and distributing two to five local pictures per year within the Spanish market.82 In contrast, Sony's Spanish distribution operation releases twenty to twenty- five English-language films annually and occasionally acquires and distributes Spanish films locally. By 2012, Warner Bros. was the most active studio in the Spanish LLP market, with more than 40 percent of the market.83

Conclusion. In retrospect, former Sony vice president de Macedo described Sony's approach to the local language production business as similar to raising a first child: "[Sony] had the right instincts, they went in with the right people. John [Calley] retired from that job and the vision began to shift. In the meantime, other studios were saying look what Sony did."84 While SPE successfully coproduced a handful of LLPs in each location, the common perception is that the international production unit spread its resources and localization efforts too fast and too far. While commercially successful LLPs could make their money back in Brazil with tax incentives and a large national audience, the weakening financial markets that led to the global recession and decreas- ing national audiences in European locations like Spain made for a less viable local strategy.

Ultimately, Sony's attempt at flexible localization failed to scale more broadly. While I have focused largely on the institutional and geographical history of the LLP, two theoretical perspectives offer further explanation both institutionally and on the ground. On the one hand, the political-economic arguments of Wasko, Miller, and Gomery apply to some extent. The political-economic approach contends that Hol- lywood studios operate through a top-down, centralized process for financial and cre- ative decision making. At times, the financial bottom line and reliance on traditional corporate management structure shaped Sony's LLP strategy (and, as many Sony employees argued, for the worse). Los Angeles-based executives controlled the purse strings and the power to green-light for financially dependent units like Spain, as op- posed to more autonomous units like Brazil. Many times, this inflexibility in the trajec- tory of non-English LLPs was rooted in American executives' unfamiliarity with other nuanced industry dynamics or their unwillingness to move beyond studio filmmaking conventions. Not surprisingly, LLPs did not supplant or subvert the historical power of Hollywood studios' positions in international markets. Whether LLPs succeeded or failed, Sony essentially stayed in those markets to release its English-language films.

Yet Jenkins's and Curtin's discussions of convergence and conglomeration allow for a more contextualized and culturally specific account of the failed localization efforts. Sony found it difficult to enter so many midsize industries within a five-year period and to quickly understand the history and nuances of each individual media production and consumption culture. Jenkins contends that this concentration of ownership and convergence does not function in a neat and tidy linear fashion, as the political econo- mists would suggest. He argues that efforts toward the convergence of technology, divi- sions, and media content within conglomerates like Sony operate less as an integrated strategy and more as various disjunctive and contradictory practices flowing across diverse entertainment divisions.

For Sony, internal company collaborations between production and distribution units resulted in tense and contradictory methods for coproducing and releasing lo- cal content. This may be the result of an inability or unwillingness to adapt to and invest in production and corporate cultures within the local industry. Jenkins argues, "The closer to the ground you get, the more media companies look like dysfunctional families."85 On the one hand, this limited metaphor may help explain some of the conflict and different perspectives over management styles and local commercial prac- tices. Yet, on the other hand, Curtin's work on the activities of Hollywood majors in the Chinese market is more applicable in the case of Sony's LLP strategy. Curtin explores how tensions between Warner Bros. theatrical and Warner Bros. distribution in Taiwan were the result of conflicting institutional priorities.86 In the case of Sony, the struggle over how to define and implement the LLP across such diverse markets reveals "conflicting institutional priorities" within the conglomerate.

Specifically, the tension among Sony management in the United States, the local distribution division, and Columbia Español resulted from different objectives and re- sponsibilities. The local distribution office's primary priority is to promote and release English-language films within Spain. Much of the struggle over creative control and decision making between the distribution and production arms came down to how best to produce and circulate these LLPs. Furthermore, the highly micromanaged relationship between the US-based managers and Spanish production executives did not allow for the flexibility in creative and financial decision making necessary for the unit's sustainability. The local producer executives did not have the flexibility to take risks on projects that did not fit within the Sony commercial model.

More broadly, the central tensions emerging across Sony's LLP units resulted from conflicts over how to define and implement the LLP strategy in each individual mar- ket. Local managers and their SPE bosses often had different perspectives over what a localized Sony production might look like and how it was expected to perform at the box office. Overall, Sony's LLP strategy reveals how a conglomerate's priorities shift over time as a result of management and larger institutional changes. After 2007, a number of SPE executives who developed and championed a more decentralized local production style had left. Along with larger structural shifts in SPE, the LLP manage- ment turnover resulted in the Los Angeles office's further consolidation, the closing of LLP units, and the replacement of a few key local managers. With major institutional shifts inside SPE, company priorities shifted and the continuation of a flexible localiza- tion strategy became unsustainable. As suggested by Curtin's portrayals of media con- glomerates, the history of Sony's LLP strategy sheds light on the contemporary state of media corporations and their globalization efforts as companies expand unevenly across international markets.

One final, specific observation can be drawn about this global expansion. The drive toward geographical expansion with the LLP signals that Western Europe as a stable and lucrative international film production market is increasingly unreliable for Sony. As a result of lucrative tax incentives, increased runaway productions, and an ever-growing theatrical market, Sony repositioned its LLP operations within the grow- ing German and Eastern European markets, such as Russia. In turn, international production units are moving away from traditional international markets like West- ern Europe. As the European economic situation has left some of the region's largest film markets (e.g., Spain, Italy) struggling, film studios are refocusing local produc- tion within emerging markets such as Brazil, Russia, India, and China (BRIC). Each BRIC market has experienced rapid expansion in the number of theaters, screens, and middle-class moviegoers in recent decades. Unlike Brazil's flourishing theatrical market, corporate anxieties around a declining market may have been a driving factor in Sony's micromanagement of Spain. The general health of the movie business in Western Europe undoubtedly influenced SPE's unit closure and restructuring plan. This reflects larger shifting conglomerate priorities that are rethinking the interna- tional marketplace and how these companies produce and deliver content to growing national audiences.

However, as SPE drastically scaled back LLP units after 2007, some of its competi - tors began to face similar struggles with a market-by-market approach. By 2011, the LLP model as an industry strategy was in decline as other studios-Universal and Disney-reorganized or closed their LLP units.87 Today, Twentieth Century Fox and Warner Bros. are the most prominent local-language producers; both companies are actively coproducing films across Europe, Asia, and Latin America. Yet what needs to be considered in the future is whether LLP is a sustainable long-term strategy or merely a passing product of the conglomerate era. English-language films are still the biggest and most central business for Sony and its competitors. Even at the height of local-language productions, Sony produced on average twenty-two English-language films per year, as opposed to a total of thirty-three LLPs between 1998 and 2007.88

Overall, the LLP strategy was an experiment in localized production emblematic of the conglomerate era. Lynton's statement, which opens this article, emphasizes the ways in which the conglomerates have internalized and developed strategies to engage with discourses of globalization. The LLP offers a significant break from earlier stu- dio practices, which approached audiences beyond the English-language market as a homogenized unit. As international markets have expanded into the major revenue source for the studios, conglomerates continue to develop specific strategies for local- izing content to reach audiences, specifically the BRIC market.

Although Sony has pioneered many of the globalization strategies for producing and distributing media worldwide since the 1990s, the company's LLP experiment, for the most part, failed as a sustainable wide-scale model. Ultimately, SPE was unwilling to invest in the resources and the creative flexibility needed for the units to succeed. In the case of Brazil, the LLP unit succeeded largely as a result of the financial and creative freedom that remained within the local unit. Other units, such as China, had successful yet limited runs throughout the 2000s. Despite a string of successful films like Crouching Tiger, Hidden Dragon, the unit still closed along with Spain as part of IMPPG's consolidation. Although Sony has been an active contributor to the local-production boom, I would argue that the Brazilian unit is the exception (and not the rule) for the company's localization efforts. More often, SPE's frequently shifting infrastructure, leadership, and shortsighted approach to local markets led to an inflexibility in local operations. As the Spanish LLP unit illustrates, Sony's LLP strategy was ultimately in- adequate and reactionary to market conditions rather than adaptable to them. Given Sony's conflicting corporate priorities and management structure, SPE executives cre- atively and financially micromanaged the Spanish unit into closure. Internal tensions and multiple management voices got in the way of coproducing efficiently on the local level. In general, Sony's LLP history reveals the adoption of slippery globalization discourses, messy strategies of localization, and contradictory internal corporate rela- tions that characterize contemporary media industries and continue to challenge local coproduction efforts. ?

Thank you to Janet Staiger, Joe Straubhaar, Tom Schatz, and Shanti Kumar for their extensive insights and comments throughout the multiple stages of this project. Also, many thanks to the Cinema Journal editors and reviewers for their valuable feedback.

Footnote

1 Michael Lynton, "Globalization and Cultural Diversity," Wall Street Journal, September 5, 2007, http://online.wsj .com/article/0,,SB118885657159716199,00.html%3Fmod%3Dopinion%26ojcontent%3Dotep.

2 Thomas Schatz, "The Studio System and Conglomerate Hollywood," in The Contemporary Hollywood Film Industry, ed. Paul McDonald and Janet Wasko (Malden, MA: Blackwell, 2008), 25-27; Tino Balio, United Artists: The Company That Changed the Film Industry (Madison: University of Wisconsin Press, 1987), 58; Tino Balio, "'A Major Presence in All the World's Important Markets': The Globalization of Hollywood in the 1990s," in Contemporary Hollywood Cinema, ed. Steve Neale and Murray Smith (London: Routledge, 1998), 58-77.

3 See Schatz, "Studio System"; Alisa Perren, Indie Inc.: Miramax and the Transformation of Hollywood in the 1990s (Austin: University of Texas Press, 2012).

4 According to a 2010 Motion Picture Association of America (MPAA) market statistics report, the "international" box office earned US$21.2 billion (67 percent), and the North American box office earned US$10.6 billion (33 percent). Furthermore, future growth in non-US markets far outweighs the "domestic" market. The Latin American market grew by 25 percent in 2010, whereas domestic, North American box-office sales remained stagnant over the previous four years. MPAA, "Theatrical Market Statistics 2010," http://www.mpaa.org/Resources/653b11ee-ee84-4b56-8ef 1-3c17de30df1e.pdf (accessed March 1, 2011); Mark L. Sirower, The Synergy Trap: How Companies Lose the Acquisition Game (New York: Free Press, 1997), 38; See Thomas H. Guback, The International Film Industry: Western Europe and America since 1945 (Bloomington: Indiana University Press, 1969); Charles Acland, Screen Traffic: Movies, Multiplexes and Global Culture (Durham, NC: Duke University Press, 2005).

5 Ali Jaafar, "Hollywood Biz without Borders," Variety, April 17, 2009, http://www.variety.com/article/VR1118002564.

6 Sony Pictures Entertainment is the filmed entertainment division of the Sony Corporation. Throughout this article, I identify different groups and companies both in the United States and internationally. Unless otherwise stated, Sony used alone denotes SPE and Columbia refers to local production units outside of the United States and housed within SPE's Columbia TriStar Motion Picture Group.

7 See Janet Wasko, Hollywood in the Information Age: Beyond the Silver Screen (Austin: University of Texas Press, 1994); Benjamin M. Compaine and Douglas Gomery, eds., Who Owns the Media? Competition and Concentration in the Mass Media Industry (Mahwah, NJ: Lawrence Erlbaum Associates, 2000); Toby Miller, Nitin Govil, John McMurria, Richard Maxwell, and Ting Wang, Global Hollywood 2 (London: BFI, 2005).

8 Henry Jenkins, "The Cultural Logic of Media Convergence," International Journal of Cultural Studies 7, no. 1 (March 2004): 33; Michael Curtin, Playing to the World's Biggest Audience: The Globalization of Chinese Film and TV (Berkeley: University of California Press, 2007), 107.

9 See Guback, International Film Industry; Balio, United Artists.

10 Based on the framework of Timothy Havens, Amanda D. Lotz, and Serra Tinic's "critical media industries approach," my midlevel research focuses on the media professionals such as producers and management making the day-to-day production decisions and negotiating relationships with their corporate executives and creative partners. I spoke with elite and well-connected film professionals, including local managers at Sony, Warner Bros., and Paramount; independent producers and independent distributors; and directors of the national and regional film agencies and commissions. Timothy Havens, Amanda D. Lotz, and Serra Tinic, "Critical Media Industry Studies: A Research Ap- proach," Communication, Culture and Critique 2 (2009): 234-253.

11 Curtin, Playing to the World's Biggest Audience, 107.

12 Alex Ben Block, "Local Warming," Hollywood Reporter, June 19, 2009, http://www.hollywoodreporter.com/news /local-warming-85602.

13 Former Sony executive, phone interview by author, July 2012. See also Brent Lange, "Never Mind The Avengers: Overseas Markets Are Hollywood's Box-Office Heroes," Wrap, http://www.thewrap.com/movies/article/never-mind -avengers-overseas-markets-are-hollywoods-box-office-superheroes-52006.

14 For previous works on coproductions, see Guback, International Film Industry; Kristin Thompson, Exporting Enter- tainment: America in the World Market, 1907-34 (London: BFI, 1985); Colin Hoskins, Stuart McFayden, and Adam Finn, Global Film and Television: An Introduction to the Economics of the Business (Oxford, UK: Clarendon Press, 1997); Tim Bergfelder, "National, Transnational or Supranational Cinema? Rethinking European Film Studies," Media, Culture and Society 27, no. 3 (2005): 315-331.

15 See Joseph Straubhaar, World Television: From Global to Local (Los Angeles: Sage, 2007).

16 "Filme sobre Chico Xavier chega a 3 milhões de espectadores," Estadao, May 6, 2010, http://www.estadao.com.br /noticias/arteelazer,filme-sobre-chico-xavier-chega-a-3-milhoes-de-espectadores,zer,filme-sobre-chico-xavier-chega -a-3-milhoes-de-espectadores,547995,0.htm.

17 Jeremy Kay, "2007: Review: Hollywood Looks for Local Heroes," Screen Daily, December 21, 2007.

18 John Hazelton, "A New Approach to International," Screen International 1243 (November 2011): 8.

19 Gregg Goldstein, "Par, U Pare Global Arms Despite Success," Variety, July 23, 2011.

20 Richard Fox (executive vice president of international for Warner Bros.), phone interview by author, August 21, 2013.

21 Kay, "2007."

22 Anna Kokourina (vice president of production for Fox International Productions), phone interview by author, Septem- ber 25, 2013.

23 Kay, "2007."

24 Laura M. Holson, "Hollywood Seeks Action Overseas," New York Times, April 3, 2006, http://www.nytimes.com /2006/04/02/technology/02iht-movies03.html?pagewanted=all.

25 Eric Pflanner, "Hollywood Turning to Non-English Fare," International Herald Tribune, May 24, 2004; Alan Leigh, "Think Locally," Hollywood Reporter, October 1, 1999.

26 Ali Jaafar, "Fox Offers Local-Language Films," Variety, March 25, 2009.

27 Goldstein, "Pare, U Pare."

28 Frank Rose, "Think Globally, Script Locally," Fortune, November 8, 1999, http://money.cnn.com/magazines/fortune /fortune_archive/1999/11/08/268531/index.htm.

29 For a discussion of "Euro pudding," see Anne Jäckel, European Film Industries (London: BFI, 2008).

30 Steve Solot (Rio Film Commission, former vice president of MPA Latin America), interview by author, August 2010, Rio de Janeiro.

31 Carl DiOrio, "Sagansky: Go with the Global," Hollywood Reporter, February 10, 1997.

32 Ibid.

33 Sharon Swart, "Sony Spans Globe for More Local Films; Deborah Schindler Ramps Up in Berlin," Variety, June 13, 2008, http://www.variety.com/article/VR1117987443?refcatid=1019.

34 Pflanner, "Hollywood Turning"; Akemi Nakamura, "Hollywood's Japan Units Pursue Local Blockbusters," Japan Times, December 12, 2002.

35 Pflanner, "Hollywood Turning."

36 Lynton, "Globalization and Cultural Diversity."

37 Iona de Macedo (former vice president of production for Latin America and president of Columbia Films Produc- ciones Españolas), interview by author, January 17, 2011, Madrid.

38 John Sinclair, "Geolinguistic Region as a Global Space: The Case of Latin America," in New Communications Land- scapes, ed. Georgette Wang, Anura Goonasekera, and Jan Servae (London: Routledge, 2000), 19-32; Straubhaar, World Television.

39 De Macedo, interview.

40 Holson, "Hollywood Seeks Action Overseas"; "Sony Pictures Creates International Motion Picture Group," PR News- wire, April 30, 2007, http://www.prnewswire.com/news-releases/sony-pictures-creates-international-motion-picture -production-group-58893427.html. Gareth Wigan passed away in February 2010, and I was unable to interview him for this project. See also Gareth Wigan's obituary by Nikki Finke, "R.I.P. Gareth Wigan," Deadline, http://www .deadline.com/2010/02/r-i-p-gareth-wigan/; Justin Kroll, "Gareth Wigan: CineAsia Visionary of the Year," Variety, December 5, 2008.

41 Leigh, "Think Globally"; Pflanner, "Hollywood Turning."

42 Eric Hansen and Cathy Dunkley, "SPE Makes Mark in Germany," Hollywood Reporter, February 13, 1998; "Sony Pictures Unveils Moviemaking Unit in Asia," Reuters, September 28, 1998.

43 Hansen and Dunkley, "SPE Makes Mark in Germany."

44 Pflanner, "Hollywood Turning."

45 "Sony Shutters German Film Unit," Hollywood Reporter, March 13, 2003.

46 "Sony Pictures Unveils Moviemaking Unit in Asia."

47 Nicole LaPorte, "Local Pix Pique H'wood," Variety, September 12, 2004.

48 Ibid.

49 Former Sony executive, interview by author, January 2011.

50 Jeremy Kay, "Isabel Hund to Head Sony's German Production," Screen Daily, August 31, 2009.

51 To explain the Madrid closure, Wigan, de Macedo, and other former Sony employees cite the rise of online piracy, declining profits from theatrical and home entertainment, and generally the growing financial instability of the Span- ish economy. De Macedo, interview.

52 Elaine Guerini, "The Land of Promise," Screen International, August 5, 2010.

53 Cacilda Rêgo, "Brazilian Cinema: Its Fall, Rise, and Renewal (1990-2003)," New Cinemas: Journal of Contempo- rary Film 3 (2005): 85-100.

54 Manoel Rangel, "The Regulatory Structure of the Audiovisual Sector in Brazil and International Co-Productions," in The Brazilian Audiovisual Industry: An Explosion of Creativity and Opportunities for Partnerships, ed. Steve Solot (Rio de Janeiro: Latin American Training Center, 2012), 55.

55 Sony do Brasil existed previously as Columbia Pictures do Brasil, and Columbia had maintained since the 1950s a historical position in partnering with local companies to produce projects. It was only by the 1990s that Sony had developed a consistent coproduction effort that became part of the local-language production strategy. Rodrigo Saturnino Braga (managing director of Sony do Brasil), interview by author, September 15, 2010.

56 Industry professional working in the audiovisual policy sector, interview by author, August 2010; Saturnino Braga, interview.

57 Elaine Guerini, "Brazilian Cinema Boom to Follow Shopping Mall Growth," Screen International, June 28, 2011.

58 Ibid.

59 De Macedo, interview.

60 Sony do Brasil and Buena Vista International are a joint venture. They share the same director (Rodrigo Saturnino Braga), employees, and office, but the two businesses are completely separate.

61 "List of National Co-Productions," MPA Brasil, http://www.mpaal.org.br.

62 De Macedo, interview.

63 "Filme sobre Chico Xavier."

64 This budget average comes from a 2007 MPAA market report and marks the last year the organization released specific production costs in their annual report. Most likely, the budget averages for Hollywood films have risen in recent years. MPAA, "Theatrical Market Statistics: 2007," http://www.mpaa.org/policy/industry.

65 Chris Evans, "The Pain in Spain," Screen International, February 10, 2011, http://www.screendaily.com/reports /territory-focus/the-pain-in-spain/5023315.article.

66 Sarah Rainsford, "Spanish Vote amid Mass Protests," BBC News, May 22, 2011, http://www.bbc.co.uk/news /world-europe-13488385.

67 De Macedo, interview.

68 Ibid.

69 Pamela Rolfe, "Next Stop on SPE Co-Production Journey: Spain," Hollywood Reporter, September 25, 2001.

70 Ibid.

71 Although produced in Spain with local talent, many in the industry, such as the lead actress Paz Vega, considered the film a Hollywood film; de Macedo, interview.

72 Speaking with the general managers of Warner Bros. and Universal in Madrid, I learned that they have a similar centralized green-lighting process. This appears to be an industry LLP standard in Europe.

73 Former Sony executive, interview.

74 Ben Fritz, "In Spain, Internet Piracy Is Part of the Culture," Los Angeles Times, March 30, 2010, http://articles .latimes.com/2010/mar/30/business/la-fi-ct-spain30-2010mar30.

75 Instituto de la Cinematografía y de las Artes Audiovisuales, "Boletín informativo de cine: Producción, distribución y exhibición de películas," http://www.mcu.es/cine/MC/BIC/2011/Portada.html; Tracy Rucinski and Iciar Reinlein, "Spanish Piracy Law Draws U.S. Investments-Minister," Reuters News, July 22, 2011, http://www.reuters.com /article/2011/07/22/us-spain-piracy-idUSTRE76L32A20110722.

76 Rucinski and Reinlein, "Spanish Piracy Law."

77 Rolfe, "Next Stop."

78 Curtin, Playing to the World's Biggest Audience, 107.

79 Former Sony employee A, interview by author, January 2011.

80 De Macedo, interview.

81 Former Sony employee B, interview by author, January 2011, Madrid, Spain.

82 Ivan Losada (Sony Pictures Releasing España), interview by author, January 18, 2011, Madrid.

83 Pablo Noguerones (Warner Bros. España), interview by author, January 28, 2011, Madrid.

84 De Macedo, interview.

85 Jenkins, "Cultural Logic," 38.

86 Curtin, Playing to the World's Biggest Audience, 106-108.

87 John Hazelton, "A New Approach to International," Screen International, November 6, 2012.

88 "Sony Corporate Fact Sheet," http://www.sonypictures.com/corp/corporatefact.html (accessed June 15, 2010); Mike Goodridge, "Breaking the Language Barrier," Screen Daily, August 9, 2007, http://www.screendaily.com/breaking -the-language-barrier/4033953.article.