Many have been predicting the demise of movie going. With the release of The Force Awakens, many and rightly so have seen a rebirth in movie going. But it also solidifies a series of trends which spell doom for the smaller and story driven picture. We may have to face that that movie theatres have become solely the domain of the spectacle picture.
It took just rapid 15 days for Star Wars: The Force Awakens to overwhelm Jurassic World’s domestic box office. Last Friday, the film earned a first place with $34.46 million to increase it’s box office to a Disneyriffic $686.43 million. Of course this is best domestic box office for a film released in 2015, but more important is that it is strong enough to overtake Titanic and push it into second place . As for the the Force Awakens, we are looking at a weekend projection of $95 million , give or take $5 million. That said, it has already broken a couple of major records—Fastest to $650 million and Biggest Domestic Hit of 2015..
The record-breaking performance of The Force Awakens, the new Star Wars sequel, has declared that marketing has won over creativity in Hollywood . Now , this times anyways Hollywood, however, isn’t to blame: Because of the diversifying ways we watch movies, Hollywood is increasingly reliant on a few huge financial bets – and sequels are the safest.
Making smaller budget movies for better or worse is a business with rapidly diminishing returns. Our business has been rapidly eroded . All content industries have been battered by the technological revolution and those poor folks in Hollywood is no exception. Netflix made $US6.4 billion in revenue last year, which represents 62 per cent of the total US theatre gross. People have taken notice and more importantly the banks have taken notice. People still love movies, but they would rather watch most movies at home or even on their mobile devices. People going a theatre not for story, not for actors…..they are going for a massive visual experience.
The ticket sales of the effects driven blockbusters have actually overtaken ticket price inflation. That makes sense, too: Movies such as the latest Star Wars offering are best seen on a big screen. On a small screen, much of the power of today’s Hollywood behemoths is often lost on a 42 inch Samsung. It costs a lot to produce one of these technological marvels. The Force Awakens had mere $US 200 million budget. Disney, still rubbing the teeth markets out, as a result of John Carter really needed this.
The 2013 movie, The Lone Ranger, starred Johnny Depp and cost $US215 million to make. It grossed only $US89.3 million in the US and $US260 million worldwide, resulting in huge losses for the studio. Big pictures must make double their budgets theatrical in North American to see a profit. The Lone Ranger was not a sequel and, from a business point of view given industry trends should never have been made.
Sequels, prequels and remakes have been consistently shown to perform better than original movies. This explains the many declarations that Hollywood is dead creatively. The truth is…is that Hollywood has gotten very conservative. Using Box Office Mojo data from 2011 for his recent master’s thesis, Catolica-Lisbon School of Business and Economics student David Polido determined that the average ratio of revenue to budget stood at 2.24 for sequels, compared with 1.56 for non-sequels. The numbers show that sequels make good sense..
Usually revenue often declines as the number of movies in a franchise increases, recent box office number contradicts this dictum. Series such as the Harry Potter films have not suffered from diminishing returns.
Disney, having paid $4.1 billion for the rights to the Star Wars franchise, given their investment they were more than cautious with the marketing efforts. As someone who pines deeply for the halcyon days of the 80’s when a more varied cinema was the rule of the day, would like to see more innovation in our movies, and maybe a but more concerned about the art than the business sometimes. But unfortunately economics and the rise of technology may have doomed the smaller movies to the vod universe. I personally fin this more than risky.
Our continually changing viewing habits have pushed Hollywood to make bigger, and oddly safer bets. But as Hollywood have proven time and time again…..that at some point this strategy will fail. Maybe Universal is right…..more and cheaper.
