AFTER investing in everything from New York skyscrapers to Las Vegas casinos, foreign interests are now buying up parts of that most American of institutions: Hollywood. This week's $3.4 billion buyout of Columbia Pictures Entertainment Inc. by Sony Corporation of Japan underscores the growing presence of foreign companies in the United States movie industry.
Wednesday's deal also signals a growing consolidation and globalization of the entertainment business, a shift with potentially important economic, political, and cultural ramifications.
``If you want to get into position in the feature film industry, you have to own US,'' says Sharon Patrick, head of the media sector for the consulting firm McKinsey & Co. ``The market is here. The talent is here. The cultural product travels better.''
The sale of Columbia Pictures Entertainment Inc. (which has been 49 percent owned by Coca-Cola) to Sony is subject to certain conditions, but is expected to be finalized in November. When complete, it will be the second acquisition of a major US moviemaker by foreign interests in recent weeks. Earlier this month the Qintex Group of Australia agreed to buy the MGM/UA Communications Company for $1.5 billion.
Before the Sony deal, the Japanese were already expanding their presence in the entertainment business, although less ambitiously. Last month, for instance, JVC/Victor Company formed a partnership with film producer Lawrence Gordon under which $100 million would go into a new production company.
Earlier this year, a Japanese construction magnate put $50 million into a small studio called Apricot Entertainment. CST Communications Company, a consortium of three Japanese companies, is working with MGM/UA films. Other Japanese firms underwriting work in Hollywood: Shochiku-Fuji, an entertainment conglomerate; Zeron Group, a Japanese-run venture-capital firm; and Fuji-Sankei Communications.
A strong yen and moderate interest rates are two reasons for the Japanese interest in tinsel town. But there is more to it than that. The Japanese dominate the world in the manufacture of televisions, videocassette recorders, and other ``hardware.'' Now they want to control more of the ``software'' - movies, TV shows, and other programming - that goes along with it.
``This software can be exploited all over the world,'' says Toshihiro Nagayama, an executive with CST Communications. ``The marketplace for Japanese production is very much limited.''
Aside from Columbia's movie studio, Sony will get Columbia Pictures Television (a television production company), Tri-Star Pictures studios, a theater chain, and a valuable video library. Columbia vaults contain 2,700 movies and thousands of TV shows.
Changes in technology and deregulation of broadcasting is attracting foreigners to Hollywood studios, too. Commercial television networks are forming across Europe to compete with state-run outlets, and new distribution technologies - cable and satellites that beam signals direct to homes, for instance - are gaining wider use.
The result is greater demand for relatively inexpensive programming. Rather than produce their own shows, it is often cheaper to use US fare.
``Half or more of the media entertainment consumed around the world is from America,'' says Charles Slocum, an analyst with the Writers Guild of America/West.
Nor is all the activity a one-way street leading to Hollywood. US-based movie and TV studios are increasingly pushing products in overseas markets as the industry becomes more global.
The growing Japanese presence in US back lots may not have any immediate impact on what people see on the Big Screen. Sony, for instance, has a hands-off management style in running CBS Records, which it bought in 1987. Analysts do not expect heavy interference at Columbia.
``The Japanese understand that the dominant film culture is Western,'' says McKinsey's Patrick. ``They are not going to heavily legislate the product terms.''
If foreign ownership gets too pronounced, though, questions will surface on Capitol Hill.
``People may ask whether foreign ownership is good in these kinds of industries,'' says a congressional aide.