The film industry is a global business. It’s only natural for producers to try to better engage local audiences and stimulate local economies through international co-productions that also create jobs in the industry. Hollywood studios aiming for global markets have increasingly turned to international co-productions as a means of improving profitability. A key strategy involves filming on foreign locations. These co-productions not only promote cultural diversity but also reduce production costs by taking advantage of various countries’ tax incentives. The film’s script doesn’t even need to be set in that country. Studios in the UK or Germany offer cutting-edge production facilities, while countries like Australia and Canada have well-developed post-production and VFX infrastructure — all of which come with government subsidies and tax benefits.
In the U.S., tax credits vary by state: California and Georgia offer 20–30%, while New York provides 30–40%. By comparison, Canada offers 39.5% in British Columbia and 34.1% in Ontario, and Australia provides 30% (with an additional 15% from state or regional governments). The UK recently removed its 80% cap on VFX-related claims and increased its production tax credit rate from 25% to 34%. European countries like the UK, Ireland, France, Germany, Spain, and Italy have long been Hollywood’s key co-production partners. Recently, countries like Hungary have joined in, with some European governments now directly funding Hollywood co-productions.
Italy, for instance, revised its tax credit policy to favor films rooted in Italian stories. After raising its production tax credit to 40% in 2021, it introduced a clause in 2023 reducing that rate to 30% unless Italian actors, directors, or screenwriters were hired. African countries like Morocco and South Africa are aggressively marketing their unique locations and offering tax rebates of 25–30% to attract productions. Meanwhile, several major Asian countries are also ramping up their location-attraction policies.
The Current Landscape and Examples of International Co-Productions
International co-productions are films jointly financed and produced by companies from two or more countries. In the U.S., these co-productions are usually initiated by Hollywood studios and conducted under formal co-production treaties, which specify the benefits and conditions offered by the participating countries. Common approaches include location shooting, hiring local talent and crews, and planning projects around existing IP for remakes or adaptations. Top co-production partners include Canada, the UK, Australia, Belgium, Colombia, the Czech Republic, Hungary, and New Zealand.
An analysis of the top 20 U.S. box office hits in 2023 — based on comScore data for the U.S. and Lumière/OBS for Canada — shows that five of them were international co-productions. The UK led with two titles, followed by one each from Japan, Germany, Mexico, and Canada.
<Table 1. Top 20 North American Box Office Hits of 2023>
<Source: Marché du Film 2024 (Lumière/OBS, comScore)>
1. Barbie and Oppenheimer
The UK was credited as a co-production partner for two major films: Greta Gerwig’s Barbie and Christopher Nolan’s Oppenheimer. Barbie grossed an astonishing $1.45 billion worldwide and was one of the highest-grossing films of 2023, earning eight Academy Award nominations including Best Picture at the 96th Oscars. The film’s global success prompted a major expansion of Warner Bros. Leavesden Studios, which is expected to be completed by 2027 and will serve as a key production hub for DC Studios, home to Superman, Batman, and Wonder Woman.
<Warner Bros. Studios Leavesden, the main filming site for “Barbieland” in Barbie.
Source: Warner Bros. Studios Leavesden>
The film Oppenheimer was directed by UK filmmaker Christopher Nolan and co-produced by his UK-based company Syncopy Inc. (co-founded with his wife Emma Thomas) and the U.S.-based Atlas Entertainment (Charles Roven). Distributed by Universal Pictures, Oppenheimer won seven Academy Awards at the 96th Oscars, including Best Picture, Best Director, Best Actor, Best Supporting Actor, Best Cinematography, Best Editing, and Best Score.
2. The Super Mario Bros. Movie
Ranked #2 at the 2023 U.S. box office, this film is a U.S.-Japan co-production based on Nintendo’s video game IP. Nintendo’s Super Mario was once in direct competition with Sega’s Sonic, which was adapted into the live-action film Sonic the Hedgehog 2 in collaboration with Paramount Pictures, ranking #9 at the box office.
3. John Wick: Chapter 4
Directed by Chad Stahelski and produced by Lionsgate, John Wick: Chapter 4 lists Germany as a co-producing country. Founded in 1912, Germany’s Studio Babelsberg received €621,600 (approximately USD 700,000) in support from the German Federal Film Board, based on the strong performance of the John Wick franchise, which previously drew over 1.7 million moviegoers. Ahead of its regular release on over 800 screens in Germany, the film earned $635,000 during Wednesday previews alone, outperforming its predecessor by 40%.
Ranked 14th at the North American box office, The Hunger Games: The Ballad of Songbirds & Snakes is a spin-off of Lionsgate’s highest-grossing franchise, The Hunger Games. Lionsgate has seen major success with series such as The Hunger Games, Twilight, and John Wick. Directed by Francis Lawrence, who also helmed Mockingjay Parts 1 and 2, the film is a Canadian co-production, with VFX and post-production work completed in Canada.
Support for International Co-Productions
According to FilmLA’s 2017 report on international productions in the Los Angeles area, Canada led with 20 co-productions, followed by the UK (15), Australia (5), and France (3). These figures are based on an analysis of the top 100 global box office titles between 2013 and 2017, before the COVID-19 pandemic disrupted international mobility. For films with production budgets exceeding $100 million, co-productions with well-established VFX infrastructure and tax incentives were strongly preferred.
Key studio hubs included Pinewood and Warner Bros. Leavesden in the UK, and WETA in New Zealand. In the U.S., Georgia hosted 15 top productions, followed by California (10), New York (6), and Louisiana (5). While California remains the world’s premier production hub thanks to Hollywood, other states are becoming increasingly competitive.
California’s Film and Television Tax Credit Program 3.0 — launched in July 2020 — offers tax credits of up to 20% for eligible expenditures on productions filmed in the state. Eligible costs include wages, service expenses, and the purchase or rental of tangible assets. Originally set to end in June 2025, the program was extended to 2030 through the signing of Senate Bill 4.0 by the state governor.
One notable co-production is The Sympathizer, a limited HBO series directed and showrun by Park Chan-wook. Co-produced by the U.S., Canada, and Korea, it was shot in LA and Santa Clarita and received $17.45 million in tax credits from the California Film Commission, according to Deadline (July 18, 2022).
The Netflix and Amazon Strategy
Streaming giants Netflix and Amazon produce a significant portion of their content overseas. More than half of Netflix’s "original" titles are now international, and as of Q1 2024, around 70% of original content spending by Netflix and Amazon was for non-U.S. productions, according to Ampere Analysis. Since the global success of Netflix’s Squid Game in 2021, this trend has only intensified. Netflix has ramped up investment in localized content for specific international markets.
By building global partnerships and collaborating with local producers and creators, Netflix caters to multicultural and multilingual audiences — something traditional broadcasters focused on national networks struggle to achieve. With strong capital and distribution networks, Netflix invests directly in local productions and then distributes the finished content worldwide through its platform. These originals are 100% Netflix-owned.
Amazon Studios (Prime Video & Amazon MGM Studios) joined the Motion Picture Association as its seventh member on October 1, 2024. Amazon’s co-production strategy focuses on cloud-based production and virtual production. At its Culver Studios facility, Amazon installed a large LED “Volume Wall” in Stage 15 to reduce time and costs associated with location shoots and post-production.
Developed in collaboration with Dimension and DNEG (which worked on Avatar: The Last Airbender), the Volume Wall allows for ultra-high-definition backgrounds that mimic real environments, enabling production teams to shoot complex scenes without moving large crews to distant locations.
Conclusion
Hollywood has undergone dramatic changes in recent years as the globalization of film production accelerates. With the rise of streaming platforms and increased demand for diverse content, Hollywood — once the epicenter of blockbuster filmmaking — now faces intense competition from overseas markets. These changes are reshaping the landscape of production and distribution, bringing both challenges and opportunities.
A key driver of this shift is the availability of tax breaks and subsidies from foreign governments, prompting major studios and independent filmmakers to consider international locations over traditional U.S. ones. Countries like Canada, the UK, Australia, and several in Europe are now recognized as cost-effective, scenic alternatives to LA.
While the globalization of film and TV production may appear to threaten the U.S. entertainment industry, streaming platforms like Netflix are thriving by tapping into local filmmaking talent. Non-English-language content now accounts for roughly 30% of total viewership. Korea, Japan, China, India, and Southeast Asia have emerged as major investment regions for platforms like Netflix.
In light of this trend, it is time for Korea to consider its own strategic response to the growing wave of international co-productions by U.S.-based OTT companies.
Full report available on the KOFIC policy research bulletin board: "KOFIC Correspondents’ Report 2024 Vol. 45 – International Co-Productions in the U.S."
Written by: Ha Eun-sun, U.S. Correspondent for the Korean Film Council (KOFIC)
