A Geeky Viewpoint

In a series of surprising announcements this week several major studios announced a profit for the most recent quarter.   When you couple this with quarterly or seasonal box office revenue down in two of the three most recent quarters/seasons and the over domestic and international movie revenues being down for the year those statements make little sense without taking a deeper dive into them.

In 2016 we have 8 movies domestically reach $200 M or more in box office receipts.  With 4 potential additional movies that may reach that plateau by years end.   This is clearly in line with the past five years with 12 or 13 movies over the $200 M mark.
The problem is $100 M dollar movies.     Over the past five years we have had an average of 20 movies take in between $100 M and $200 M in domestic box office revenue, this year we have 11.   With the release schedule for the remainder of the year, unless we have several break out hits we will have the fewest number of $100 M or greater movies since 2006.

In 2006 the average movie made $15 M in total domestic box office receipts, which is on the low end but pretty typical for the past 10 years.   In 2016 we are on pace to finish with sub $13 M average.  Major Studio releases are headed for a $59 M average domestic box office receipts compared to $69 M average over the past 5 years.   The lowest total in that time was $66 M.

If you add in the lack luster Blu-Ray and DVD sales and streaming sales (iTunes/Amazon/other) well below expectations how can it be possible that Studios are turning a profit.

The answer is fairly simple, Movie Studios are spending far less money on production of films this year than in past years.   This year of the top 15 films of the year studios spent on average $30 M less in production expenses than the previous 5 years.    When looking at the overall budget for Major Studio films the average has decreased by nearly $14 M a film according to multiple sources.