Selling French Films on Foreign Markets: The International Strategy of a Medium-Sized Film Company

Foreign markets largely shaped the business strategy of Les Films Albatros, a medium-sized, internationally networked specialty producer of films in interwar France. Depending more on foreign revenues than did the Hollywood studios, Albatros also realized higher gross returns. Because films were capital goods providing a perishable product (seats at a specific time), their price depended on both expected performance and the threshold ticket-selling capacity necessary to recoup cinema fixed costs; some films could not be sold at any price. Given the small potential market for its films, Albatros had to find an intricate balance between producing at low cost and delivering films with at least threshold ticket-selling capacity. It did so by differentiating its films, entering film distribution in France, coproducing internationally, and cooperating with Pathé and Gaumont, the two largest French film companies. While its larger European rivals were obsessed with operational effectiveness vis-à-vis Hollywood, Albatros, by adopting a distinct strategic position, hardly had to pay attention to operational effectiveness at all. It was making a differentiated product for needs unserved by Hollywood.