Hollywood Has Become Incredibly Dependent On Overseas Viewers

With the box office in a slump this season, Hollywood could use some hits.

While analysts are hoping for the first U.S. hit of 2013 with this weekend's "Oz the Great and Powerful," the answer for a quick box-office turnaround may be appealing to the right audience overseas.

Last year, Hollywood had its best year ever to date earning a record $10.8 billion.

It wouldn't have come anywhere close to record numbers, however, if it weren't for the foreign box office.

With international grosses added into the mix, the top ten 2012 box office movies earned $9.2 billion at theaters. Without overseas earnings, the same films earned $3.2 billion.

Even bombs benefited from overseas.

"Journey 2: The Mysterious Island" earned $222 million abroad while barely surpassing the $100 million mark at home. The "Total Recall" remake earned more than three times its $58.9 million domestic gross overseas.

And Tom Cruise's weak box-office performance with "Jack Reacher" at home ($79.7 million) earned $136.5 million in foreign grosses.

"Battleship" may have seen earnings of only $65 million here, but went on to earn a massive $303 million worldwide. Despite Disney's $200 million write down on "John Carter" last year the film made nearly 75 percent of its earnings overseas.

With the foreign box office acting as a cushion for poor-performing U.S. films, it gives incentive for Hollywood studios to take a gamble on big budget films. If movies don't perform well at home, there's always the chance they will pick up abroad.

But don't expect overseas earnings to save a total flop.

"Foreign box office took some of the sting out of major misses like 'Battleship' and 'John Carter,' but both films still lost tens of millions for their studios when you factor in prints and advertising," Jeff Gomez, CEO of Starlight Runner Entertainment, tells Business Insider.

"John Carter," for instance, resulted in Walt Disney Studios President Rich Ross stepping down and a $200 million write-off.

So, what explains the overseas surge?

"Two significant markets have opened wider to Hollywood product." Gomez tells Business Insider. "Russia and China are both nurturing theatrical growth industries, and American movies will always be held as the gold standard there."

In the past year, five American-made films have surpassed the $50 million mark in China while another nine have crossed $25 million.

Last year, China overtook Japan to become the second-biggest box-office market in the world. A new report by Ernst & Young pits the country to overtake the US film market by 2020.

Worldwide president of distribution at Sony Pictures, Rory Bruer, told TheWrap one reason its films do well overseas is because of the storylines.

“If you look at the stories that we’re telling, like ‘The Amazing Spider-Man,’ these pictures are meant for every person on the planet,” said Bruer. “They’re not U.S.-centric. They’re relatable for everyone.”

3D and IMAX showings are popular overseas, adding a boost at the box office.

Gomez says another reason foreign box office has been booming is because of the increase of 3D and IMAX abroad in recent years.

"One of the major factors in the foreign box office boom is that overseas filmgoers have embraced 3D, far more so than their American counterparts," says Gomez.

"Action and spectacle have always been big winners internationally, and elements like 3D and IMAX boost the wow factor and continue to be enormously popular."

With the box office hurting right now, "Oz the Great and Powerful" could be the right combination both domestically and abroad with IMAX and 3D showings.

"Although the 'Wizard of Oz' story world has been relatively dormant for the past decade, it ranks with 'Star Wars' among the most highly recognized story worlds in all of global popular culture," says Gomez. "The film is tracking to be a hit domestically, and its huge international will be icing on the cake."