According to the critics, 2013 has been a vintage year for cinema. As Hollywood readies itself for the awards season, the competition for the top positions is expected to be the fiercest for years.
For Universal Pictures, it has been a lucrative year, too. The studio has taken 13.8pc of the $10.3bn (£6.3bn) US box office revenues, its highest share since 2000 and released two of the three highest-grossing films of the year on a global basis.
The number three film, Fast and Furious 6, might not trouble the Oscar nominations committee as it draws up the best picture list, but the latest in Universal’s street-racing series was a global smash hit.
The film’s $790m global box office take means that the franchise is sure to continue in spite of the death of one of its stars, Paul Walker, last month in a car accident.
The animation Despicable Me 2 was Universal’s biggest film of the year, beaten only by Iron Man 3.
It is a major achievement for Universal, which last had a release in the top five with Mamma Mia! in 2008.
David Kosse, president of Universal’s international business, has overseen the record-breaking year from his office in London’s West End. The company broke the $2bn barrier at the international box office for the first time, in September.
“The film business is always a hits business,” he says. “The thing that’s changed is that when we have a hit we’re all better at turning those into a franchise and running those hits longer.”
The American is responsible for every aspect of Universal’s non-US business, from giving the go-ahead to productions, to regulation, distribution and the exploitation of rights. He is also therefore in charge of the company’s growth opportunities, as theatrical and DVD revenues in the US are respectively flat and declining.
“The international box office is having another big growth year,” he says. “There are a few markets that are struggling like Spain. Latin America is growing very quickly. China is growing between 30pc and 40pc. The whole of south-east Asia is growing. Russia continues to grow.
“In the UK, cinema growth and cinema attendance is very, very robust. People are still in love with going to the cinema. The DVD business is on a slow decline, but it’s not that bad. Relative to the loss of retail, which has been pretty dramatic when you look at the number of retailers who have gotten out of it, it hasn’t been a huge decline in DVD revenues.”
The slow death of the DVD business as a result of the emergence of internet and pay-TV on demand services is one of the major structural changes to the film business Kosse has grappled with since taking the helm in 2009. The 51-year-old, originally from Portland, Oregon but a Londoner for 16 years, launched the distributor Momentum Pictures in 2000 and joined Universal in 2004.
The technological shift is now seen as an opportunity, opening the possibility of entirely new revenues in territories previously dominated by piracy.
“There also a lot of markets in the world where DVD just never caught on,” Mr Kosse explains.
“Piracy rates are high in places, and people don’t have a culture of owning things like that. Russia there’s no DVD market, China there’s no DVD market. But now with pay-TV and digital on demand there’s an opportunity as broadband speeds in these places pick up for people to see and pay for content, whereas they weren’t paying anything before.
“It’s getting people to pay for stuff they’ve been getting for free, and that will be a big digital windfall for rights holders like us.”
The biggest prize of them all is China, which is also in the midst of an unprecedented boom in cinema building. It is claimed 12 new screens open every day. Fast and Furious 6 topped the box office there and helped it earn 70pc of its worldwide gross sales outside the US.
Kosse, 51, jets between London and Beijing on a regular basis in an effort to smooth Universal’s relations with the government film bureau, which acts as censor and imposes quotas on foreign films as part of efforts to encourage the Chinese industry.
“We spend a lot of time dealing with it,” he says. “Also getting to know our partners out there and learning what they’re sensitive to.
“They look at Taiwan and see that 85pc or 90pc of the movies there are American and they don’t want that. But they look at Korea and Japan, where it’s 50pc and they want that. In order to get that Korea implemented screen quotas for Korean films. Now the Korean film industry is strong.
“China wants to head down that path. If we as outsiders can have 50pc of a market that’s growing 30pc a year then great. That’s still a huge business for us.”
The tastes of Chinese cinema-goers are an increasingly important element of Kosse’s contribution to Universal’s production process.
“Every market has its peculiarities and some have big weight in the decision making process.
“China is one of those that starts to have significant weight. We try to make movies that will play everywhere. Usually the thing the Chinese audience wants is the same thing a UK or German or Brazilian audience wants.”
What Universal believes audiences want is franchises and sequels, and the figures support that view. Of the top 10 grossing films of 2013, only the space adventure Gravity and the animation The Croods were not part of an existing franchise.
Kosse is unapologetic about the trend, and is working towards more repeat hits. Universal is developing a “reboot” of the Jurassic Park franchise and has begun shooting 50 Shades of Grey, the first in a trilogy based on EL James’ high-selling explicit novels.