And it’s All Hollywood’s Fault

Hollywood is in the midst of a rough Summer movie season. Now, sure, we can argue over the semantics of starting the “Summer” season in April or May (as the studios have technically been doing for years now), but regardless, this is prime movie-watching time, and audiences just aren’t showing up like they used to. Everyone (well, maybe everyone except the suits in charge of the studios) acknowledges that the good times couldn’t last forever, that the expectations that every new, big-budget blockbuster could make Marvel Money, would sooner or later end (hell, right now even Marvel can’t make “Marvel Money” like they used to), but still, the stark reality of the situation has Hollywood shaking.

This year, so far, ticket sales are down over 20% since last year, and over 40% since their post-pandemic peak. Even then, Hollywood isn’t making the kind of money they used to when, every few months, Marvel would release a new superhero film and every other studio could ride the coattails, making a decent share with whatever they were releasing that year. Now, though, films are struggling and without a specific voice, and a lot of reasons to go back and see films, blockbusters are failing left and right.

Looking at releases from just this year (not counting films that were released in 2023 and carried over) the worldwide Box Office looks tragic. There are a couple of bright spots, like Dune: Part Two ($711.8 Mil against a $190 budget) and Godzilla x King: The New Empire ($564.1 Mil against a $150 Mil budget), but most films are struggling to break even in the current era of film releasing. Bear in mind that “breaking even” doesn’t have the same math as it used to. Studios have to spend a lot on marketing, which isn’t included in the “budget” of the film (because of Hollywood math), and the film has to perform well in theaters to be considered a success; it can’t have the “long tail” of home video sales anymore because the home video market has all but vanished at this point.

Plus, remember that movie theaters take some of the profits. When a film makes, say, $500 Mil, realistically the releasing studio only sees about half of that (and that doesn’t even take into account when studios share releases domestically and internationally, or have other weird partnerships that cause more splits of the take). Essentially, for a film to break even (not even be a smash, just break even) it has to make 2.5 times its initial budget in theater ticket sales. If a film dies in the theater, there’s a good chance it won’t find its audience after.

That’s why solid films like The Fall Guy (currently $130 Mil against a $135 Mil budget) and expected smash-successes like Ghostbusters: Frozen Empire ($199 Mil against a $100 Mil budget) are considered relative failures. The money they made might seem like a lot, but without the revenue from DVD sales (which used to be as much as, or even more than, what the film made in theaters) and licensing deals for running the films over and over again on broadcast TV and cable (since those are also dying in the new streaming era), these kinds of films are dying on the vine, leaving Hollywood in a bad state.

This is a ruin of their own creation, mind you. For starters, the studios ignored the promise of streaming to maintain their old way of releasing movies. Nothing was motivating them to change their ways, and even though NetflixOriginally started as a disc-by-mail service, Netflix has grown to be one of the largest media companies in the world (and one of the most valued internet companies as well). With a constant slate of new internet streaming-based programming that updates all the time, Netflix has redefined what it means to watch TV and films (as well as how to do it). was shooting up, eventually becoming the largest American production studio (even bigger than the Big Five movie studios of Warner Bros, Disney, Universal, Paramount, and Sony), the studios didn’t care. They were making “Marvel Money” during the massive superhero boom. Nothing short of a major disaster could make them change their ways.

Enter, of course, the COVID-19 pandemic, a major disaster that forced studios to change their ways. As the world prepared to shut down, all the major studios realized that they needed their own streaming offerings to take on Netflix. For years the studios had been licensing their content to Netflix, making that streamer bigger and stronger, and all the while Netflix was promising “everything you want to watch, right at your fingertips.” Who needs to go to the theater when the biggest hits will be on Netflix soon after. Who needs to buy DVDs and Blu-Rays when Netflix has a deep library of films and TV shows, all the hits you want to watch, ready and waiting for you. The studios let it happen right under their noses and they didn’t do anything until it was too late.

The switch to streaming for all the major studios – Disney with Disney+Disney's answer in the streaming service game, Disney+ features the studio's (nearly) full back catalog, plus new movies and shows from the likes of the MCU and Star Wars., Warner with HBO Go into HBO Max into MaxThe oldest and longer-running cable subscription service, HBO provides entertainment in the force of licensed movies along with a huge slate of original programming, giving it the luster of the premiere cable service. Now known primarily for its streaming service, Max., et al – came too late to stop Netflix’s dominance. It also only sped up the process of moving people away from theaters and into their homes. For a year and a half all the studios looked at new release schedules for their major films, testing out putting movies on streaming exclusively (as a rental before making them free for everyone else), or at the same time as their theatrical debut, or just holding off on releasing them at all until theaters opened up. Often this made the films feel less special, like commodities instead of events. People got trained to care less and less about theatrical viewing, and they cut a big chunk out of Hollywood’s coffers.

Now, while films are making money sometimes, the big hits aren’t as big as they used to be. Nothing this year has yet to cross $1 Bil at the Box Office. Last year only saw two releases that managed to make that feat, Barbie and The Super Mario Bros. Movie (while Oppenheimer at least got close). Compare that to 2019 (the last “big” year before the pandemic took over everything) when nine films broke $1 Bil, and Avengers: Endgame made $2.79 Bil. That was a huge year for Hollywood, but even years prior like 2018 (five films broke $1 Bil) and 2017 (four films) saw bigger success. And even when they weren’t breaking $1 Bil, they were still making north of $500 Mil. 18 films cleared half a billion in 2018, while 14 pulled that off in 2019. Last year only saw nine films accomplish that feat, and so far we only have three films this year that have managed it (the aforementioned Dune: Part Two and Godzilla x Kong: The New Empire, alongside Kung Fu Panda 4).

Looking ahead, there aren’t a lot of movies that could help Hollywood out. Furiosa (as much as I’d love it to be a huge success) is on track for a tepid opening weekend and might be lucky to even clear $400 Mil. The buzz for Bad Boys: Ride or Die is non-existent. Maybe Inside Out 2 can pull it off, but Disney has devalued the Pixar brand so much, spending years putting every movie from the studio out as a Disney+ exclusive, that most studio fans skip Pixar’s movies in theaters and wait for them on the streaming service. Probably Despicable Me 4 will succeed, but we’re looking at Jul 26nd for Deadpool & Wolverine for the first film this Summer that is guaranteed to be a smash. After that, who knows?

To be clear, I’m not rooting for Hollywood to fail. I love movies and want to keep getting awesome adventures I can enjoy again and again. I agree that it is sometimes hard to make it out to the theater, although much of that blame rests with the studios. They’ve made the same kinds of products over and over again for years, and audiences are tired of just another superhero film or another sequel, or the same old shit. And when you consider how much is available on streaming, and how you can find something from any studio when you want it on their services (which, of note, are also dying because running a streaming service is expensive) it’s hard to justify going back to the way Hollywood did things for years.

The studios have to find a compelling way to get audiences to connect with their films. They need to give them a value-add, something good enough to fight against the lure of streaming and the desire to sit at home. Until they figure out what that can be, their heady days of massive Box Office are going to be hard to recapture. And maybe they never will be able to.