Hollywood is not collapsing — American films still dominate global screens, shape popular imagination and remain one of the most powerful instruments of US soft power. Yet Hollywood’s dominance is no longer as unquestioned as it once was. Asia, long treated primarily as a market for American cultural exports, is increasingly shaping the global cultural landscape.

Over the past three decades, Hollywood has become increasingly dependent on international markets. A quick dive into the revenue data from 2024 tells you everything you need to know about who is truly driving the film industry right now. With international markets now responsible for upward of 70% of revenue, foreign audiences have become impossible for major American studios to ignore. Naturally, this financial lifeline comes with serious strings attached. Hollywood is in a constant process of cultural negotiation, regularly altering its narratives and softening their political edges just to ensure a film actually plays well overseas.

This is where the limits of American soft power begin to appear. For decades, Hollywood worked effectively because it did not look like state propaganda. It sold American values through entertainment: individual freedom, heroism, patriotism and the American Dream. Films such as English film director Tony Scott’s Top Gun (1987) and American actor and filmmaker Sylvester Stallone’s Rambo (2008) projected military confidence and American superiority, while many Hollywood biopics promoted the belief that personal struggle, discipline and talent could lead to success.

There was a time when Hollywood exported these cultural ideals with remarkable confidence. That one-way flow is far less secure today. Because international markets now shape box-office revenue, studios are forced into a more delicate game of cultural negotiation. They cannot simply project American ideals without adjustment. Globalization, which once expanded the reach of US soft power, now also dilutes it by forcing Hollywood to compromise with the very world it seeks to influence.

Asia’s rise as a cultural power

Asia has become central to this shift. The region is no longer only a destination for Hollywood films. It is also producing its own cultural narratives, industries and standards. Hollywood’s share of the global box office has fallen from 92% to 66% over the past two decades, alongside the rise of Asian film industries, particularly China. The success of China’s animated film Ne Zha 2, which grossed about $2 billion worldwide, signals more than commercial growth. It reflects a changing cultural order.

The old assumption that Western culture alone dictates global taste is increasingly difficult to defend. Entertainment today is becoming more multipolar. Asian cinema, television, music, anime and literature are no longer merely responding to Hollywood. In many cases, creators across the region are setting new standards for global popular culture.

South Korea offers one of the clearest examples. Through the “Korean Wave,” the country has transformed popular culture into a powerful diplomatic instrument. Korean pop (K-pop), Korean dramas, films, fashion, food and cosmetics now circulate globally, shaping not only consumer taste but also perceptions of South Korea itself. Le Monde has described the Korean Wave as having “conquered” the planet, a phrase that captures how far South Korean popular culture has traveled.

Japan provides another example through anime. The country has increasingly treated anime and manga as part of its cultural influence abroad, with Bloomberg describing them as central to Japan’s soft-power strategy. Anime does not merely entertain global audiences. It also shapes how many people imagine Japan and, more broadly, Asia.

Indonesia and local storytelling

Indonesia presents a different but equally important case in this global shift. Local filmmakers may not be able to compete with Hollywood in terms of visual effects or production budgets, but they do not need to. Rather than imitating Western blockbusters, the domestic industry has found strength in stories that foreign studios cannot genuinely reproduce: Indonesian fears, humor, family tensions, religious anxieties and everyday social realities.

Domestic films captured around 60% of Indonesia’s cinema market and attracted more than 80 million viewers, putting real pressure on imported films, including Hollywood releases. The numbers say something simple: Indonesian audiences are not just waiting for whatever comes from outside. They also want stories that sound familiar, feel close and speak to the way they actually live. In that sense, watching local films is not only about entertainment. It is also about recognition. Indonesian filmmakers do not need to attack Hollywood head-on to challenge its place in the market.

The decline of American cultural dominance

China has taken a more direct route. The geopolitical tensions in 2025 provide a useful example. Reuters noted in 2025 that Beijing began cutting back on Hollywood imports in response to US tariff increases. That kind of political retaliation puts real pressure on American studios in a market they are eager to keep. Combined with the growth of China’s domestic film industry, this policy shows how cultural power is increasingly tied to economic and geopolitical competition. 

The scholar Chua Beng Huat’s work on East Asian popular culture helps explain this broader transformation. Hallyu, Japanese pop (J-pop), Asian dramas and regional cinema can all be read as signs that American media dominance no longer operates without competition. Asian audiences are not passive recipients of American culture. They choose, reject, reinterpret and produce alternative forms of popular culture.

Soft power is no longer one-way

Hollywood’s soft power has not disappeared. It remains influential, profitable and globally visible. But it is no longer absolute. Its dependence on international markets means it must increasingly negotiate with the very audiences it once assumed it could simply influence. At the same time, Asia is no longer only a market. It has become an active cultural producer.

The future of global popular culture will not be shaped by Hollywood alone. It will be shaped through negotiation, competition and exchange between multiple cultural centers. The United States remains a major cultural force, but it no longer defines the global conversation alone. Increasingly, Asia is helping determine what stories travel, what values resonate and how the world imagines itself.

[Kompasiana first published a version of this piece in Indonesian.]

[Rosa Messer edited this piece]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.