Star Wars: The Force Awakens opens next month, and is sure to put an exclamation point on what has been the year of the mega-movie. Next year – for better or worse – looks even bigger.
Fueled by a combination of hugely popular franchises like The Avengers and Jurassic Park, and big animated hits such as Inside Out, 2015 is on track to be a record year for Hollywood.
Paul Dergarabedian, a senior analyst at media measurement firm Rentrak, estimates the domestic box office this year will top $11bn (a 5% gain), while globally it could hit the $40bn mark.
“That’s impressive considering all the competition out there for audiences being pulled in myriad directions by content on the small screen and on various platforms,” he said.
That intensifying competition – from all kinds of entertainment options including Netflix and HBO, to PlayStation, to video increasingly on Facebook and other apps – is forcing the major studios more than ever to deliver the big-budget spectacles that drive audiences into theaters.
Another key factor is the growing importance of reaching international audiences as box office growth in the US flattens out. Jurassic World showed the way this summer as the fastest film to gross $1bn worldwide – hitting the milestone in 13 days.
That all points to a greater reliance on high-profile franchises, more likely to generate returns on the hefty investments required to make blockbuster movies. Consider that seven of the top 10 highest-grossing films this year are sequels or part of well-known franchises.
The bigger is better movement has had a disastrous impact on smaller, independent movies. Independent movies failed to score a breakout hit this summer and studios’ obsession with the mega-movie is likely to mean less time and money for smaller productions.
“I am big. It’s the pictures that got small,” Norma Desmond railed in Sunset Boulevard. How wrong she was.
No company highlights the focus on mega properties better than Walt Disney, where executives often refer to its “tentpole strategy” for feature films. A prime example of that approach is its Marvel franchise, whose films have averaged $820m in global box office receipts to date, according to Disney.
The latest, Avengers: Age of Ultron, is approaching $1.5bn at the worldwide box office. With the $4bn acquisition of Lucasfilm in 2012, the media giant snapped up the prized Star Wars franchise to go along with Marvel and its immensely successful Pixar Studio.
“It’s not about the volume, it’s about how good the quality is. And you’re going to be much better off as a company making fewer things, and concentrating on those,” explained Disney’s CEO, Bob Iger, speaking at an industry event last December.
Disney’s box office results this year suggest that less can indeed be more. The company has grossed about $1.5bn domestically from just 13 films, with four in the top 10. Universal is easily No 1, at $2.3bn, but that’s from 19 films, through last weekend. Warner Bros has grossed $1.4bn from 30 films, and Fox, $1.2bn from 37, per Rentrak.
In short, Disney and Universal have gotten more bang for their buck. “You don’t have to have 24 movies, and try by sheer volume, to generate some kind of big box office market share,” noted Dergarabedian.
That isn’t to say Warner Bros and Fox eschew tentpoles. Hardly. But for Warner Bros, in particular, 2015 has marked a fallow stretch as its powerhouse franchises like the The Hobbit, Dark Knight and Harry Potter all but dried up. And in their place came major flops like Pan and Jupiter Ascending.
Fox, meanwhile, showed with its reboot of the Fantastic Four this summer that even superhero movies aren’t always a sure bet. Its poor performance contributed to parent company 21st Century Fox missing analysts’ revenue estimate for the quarter ending 30 September.
Fox’s film division overall reported revenue of $1.79bn, down 28% from a year ago, while its profit fell by two-thirds to $149m. But the flameout of the Fantastic Four, which took in only $56m domestically, hasn’t discouraged Fox from thinking big. Along with Warner Bros, it is banking on a return to the franchise formula in 2016. The most widely anticipated release in that regard is Warner Bros’ Batman v Superman: Dawn of Justice, set to open in March.
The film will kick off the studio’s planned release of 10 DC Comics-based titles over the next five years, featuring other superheroes like Wonder Woman, The Flash, and Aquaman.
Next year will also see Warner Bros try to conjure the old Harry Potter magic with Fantastic Beasts and Where to Find Them, a prequel to the immensely popular films based on the JK Rowling books about the boy wizard.
“On paper, it looks like it should be a better year for Warner Bros in 2016,” said Tim Nollen, a senior analyst with Macquarie Securities who follows Time Warner.
For its part, Fox will fire up the X-Men franchise again next year, with X-Men: Apocalypse, along with new installments for hit animated properties Kung Fu Panda and Ice Age. Assassins Creed, starring Michael Fassbender and coming next December, could launch another lucrative franchise.
Representatives for Fox and Warner Bros said they expect to end up with about the same number of releases as this year, given the shifting of release dates or film acquisitions likely to take place during the next year. Fox has 17 on its 2016 schedule and Warner Bros has 22, according to Rentrak.
But given industry trends, Brian Wieser, a senior analyst at Pivotal Research, suggests Disney’s lean-and-mean approach to releases may become more common.
Discussing Time Warner in a recent research report, he expressed a lack of optimism “for more than middling expansion for the theatrical filmed entertainment space for Warner Bros (as well as for its peers), as slow box office and home entertainment growth leads to reduced investments into fewer, if slightly more profitable titles”.
