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Then, after the war, America embraced world culture. It was only natural. GI's returning home from their first time abroad had some residual interest in the cultures of Europe and Asia; and the souvenirs they wanted were not so much of the war they'd served in as of the women war brides and whore-brides they had encountered. So to add a touch of exotica or erotica to their movies, American producers imported actresses from France (Corinne Calvet, Francoise Rosay), Austria (Maria Schell), Japan (Miyoshi Umeki) and especially Italy (Alida Valli, Sophia Loren, Anna Magnani, Gina Lollobrigida, Silvana Mangano ... and the twins: Pier Angeli and Marisa Pavan). These actresses and others gave an appealing face, and body, to foreign films, which had then what most of them lack now: star quality.
As I've written on this site before (http://www.time.com/time/nation/printout/0,8816,127065,00.html), foreign films were just one aspect of America's fascination with the world outside itself. Not everybody, but a significant minority plunged into non-U.S. books, music, theater precisely because they were different. But foreign films profited the most from this curiosity, because they were movies.
Sometimes they became mainstream hits, like Federico Fellini's La Dolce Vita, which, in tickets sold, may still be the all-time foreign-language boxoffice champ. The hits spawned satellites: suddenly Italian films were hot. In the years after La Dolce Vita, dozens of pasta pictures played the big cities; foreign-film fans sought them out because of the director, the stars, the country. Another Italian film of less reputable pedigree turned into a hit: the shock-documentary Mondo Cane, on which we can blame not just a raft of cheap-n-sleazy Mondo movies but the wedding-reception standard "More," which had been Mondo Cane's theme song.
DECLINE AND DVD
No specialized form of pop culture could keep the heat up for long, and in the mid-'60s the foreign-language film wave started to ebb. In 1966, Haliday and Harvey gave up control of Janus, with Haliday going to Europe to concentrate on his acting career. (IMDb notes that two of the films he appeared in, Devil Doll and The Projected Man, were cheesy enough to be riffed on Mystery Science Theater 3000.) The company was taken over by Saul Turrell and William Becker, who steered Janus into its non-theatrical middle age, and whose sons Jonathan Turrell and Peter Becker run Criterion today. They eventually did fine; the foreign-film genre didn't.
You can guess the reasons for the decline of foreign-film cachet. Some European directors came to Hollywood, as they had decades before, because that's where the action was and is. The two enticements foreign films offered U.S. audiences intellectual panache, with a little sex were no longer unique once Hollywood raised its I.Q. and dropped its drawers. Later still, many of the best filmmakers died or retired, and the films, frankly, weren't as exciting. (Or maybe, after all those years, we of the first film generation weren't so easily excited.) And the art houses that regularly played exotics from abroad switched to Sundance-type indie movies. Foreign-film revenue gradually dropped from its '60s high of about 5% of the total U.S. box office. Today it is .5% one-tenth what it was.