The Movies Are Becoming Just Like The Markets: A Handful Of Blockbusters And Tons Of Losers
Back in July we first revealed something troubling: leadership breadth was collapsing not just across the Nasdaq...
... but the broader market as well:
As the WSJ had calculated, out of a total of 500 stocks, just Amazon, Google, Apple, Facebook, Gilead and Walt Disney accounted for more than all of the $199 billion in market-capitalization gains in the S&P 500. In fact, as of July, just these six firms were responsible for more than half of the $664 billion in value added to the Nasdaq Composite Index as of July.
Since then, the situation became more acute as the leadership thinned even further and as Goldman updated in November, only five firms – AMZN, GOOGL, MSFT, FB, and GE – totaling 9% of the equity cap of the index have accounted for more than 100% of the S&P 500 YTD return. Without these stocks the index would have posted a 220 bp lower total return or -2.2% YTD.
Of course, in the end, not even the thinning leadership was enough to offset the market being dragged down to a negative print, its first since 2008.
While all of the above should be well-known to regular readers, what may come as a surprise is that as go the markets, so go the movies.
According to the WSJ, Hollywood just had its biggest-ever year at the box office in 2015, collecting $11.1 billion in ticket sales, up 7% from the previous year and surpassing the record of $10.92 billion set in 2013. All of the growth, however, occurred at the top of the heap, or in other words, 2015 was a record year "thanks to a handful of blockbusters that left a whole lot of duds in the dust."
‘Jurassic World,’ left, was one of 2015’s blockbusters, Disney’s
‘Tomorrowland’ was among the year’s costly disappointments
But the runaway success of “Star Wars: The Force Awakens” and “Jurassic World” raises questions about the overall health of the movie business. The problem: More films that don’t have the muscle to be megahits are struggling to attract any audience at all.
What may be also little known is that for every megahit like Star Wars there were countless just as expensive flops:
A startling number of big-budget movies bombed in 2015, proving that no amount of marketing can pull audiences into theaters at a time when Netflix queues are long and social media spreads word about a stinker in a heartbeat. The year’s costly disappointments included “Pan” and “Jupiter Ascending” from Time Warner Inc. ’s Warner Bros., “Fantastic Four” from 21st Century Fox ’s Twentieth Century Fox studio, Walt Disney Co. ’s “Tomorrowland,” and “Pixels” from Sony.
It wasn't just a question of marketing: in 2015 eight movies failed to gross even $10 million despite full-fledged advertising campaigns, a record in recent years. In the past, spending $20 million or more to promote a film almost always guaranteed a respectable performance, said Chris Aronson, president of domestic distribution for Fox. But “there is no bottom anymore,” he said.
Another curious parallel: just like the middle class is disappearing in US society, so that staple of solidly profitable, if not blockbuster, 2nd tier movies is also on the extinction list: "worrisome to some in Hollywood is the disappearance of second-tier movies—those that aren’t blockbusters but are solidly profitable. Last year, 22 movies grossed between $100 million and $350 million domestically, down from 31 in 2014 and the fewest since 2006."
“Gigantic hits are actually becoming more common and the midsize hits are becoming rarer,” said Adam Goodman, a producer and former film group president of Viacom Inc.’s Paramount Pictures.
In total, the WSJ calculates that the five most successful movies of 2015 grossed $2.47 billion, accounting for 22% of the year’s total box office. The previous high for the top five was $2.05 billion, or 19% of the overall take, in 2012.
And here comes the punchline: for the other 129 films released nationally last year, the results were anything but impressive. They brought in a collective $8.65 billion, the lowest total for non-top-five movies since 2008, when ticket prices were 14% lower.
In other words, just like in the stock market, a record high portion of Hollywood "gains", or rather box office ticket sales, came from just five movies.
How to explain this curious schism?
Audiences have become “very binary” in their moviegoing choices, said Tom Rothman, chairman of Sony Pictures Entertainment’s motion picture business. “Either a film is relevant to them and penetrates the pop-cultural zeitgeist, in which case the upside is enormous, or it doesn’t rise to that level and they’re out altogether.”
“Many younger people no longer feel compelled to go to the movies as an activity in general,” said Sony’s Mr. Rothman. “Instead, they go to see a particular movie.”
One silver lining: overseas ticket sales, which rose an estimated 5% last year to $27.5 billion according to Rentrak, can help make up for losses at home. “Terminator: Genisys,” for instance, grossed $351 million internationally, compared with $90 million in the U.S. and Canada. But foreign box office more often exacerbates domestic trends. The top five domestic movies were all among the eight highest grossing internationally.
Consider this the movies' equivalent of the "least dirty shirt" phenomenon in markets where foreign capital flows enter the US "just because."
But what is most troubling for Hollywood is the evaporation of creativity and originality when it comes to box office success.
As they have for a number of years, sequels and reboots continued to rule the box office last year. The only exceptions that made the top 10 were animated features, such as Pixar Animation Studios’ “Inside Out,” and Fox’s surprise hit adaptation of best-selling book “The Martian.”
The trend toward sequels, reboots, computer-animated films and adaptations of comic books, toys or videogames is likely to accelerate in coming years as the major studios, increasingly focused on big-budget “event” movies they hope will become blockbuster hits, rely on formulas that have worked for them before.
This trend toward mindless recreation of a successful formula which has worked while undergoing minor tweaks will continue:
there were about 27 such films last year, and nearly 40 are scheduled for release this year and in 2017. Some of them are new installments of successful movie series like “X-Men” and “Fast and Furious” while others, such as “Wonder Woman” and “Ghostbusters” are attempts to create or refresh big-screen franchises.
The appropriate market analogy? Since nothing else is working, take the one thing that still does work, namely parasitic frontrunning of order flow by HFTs and make it better, faster, more profitable: in short - change HFTs technology from microwaves to lasers.
The only good news is that at least unlike the "market", humans are at least still directly involved in the creation of movies. When algos start typing up movie scripts and participating in the obligatory sex scenes, that's when Hollywood execs should quietly exit stage left.
(14 votes)
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I was really disappointed with star wars 7.
With all the hoopla I thought they would at least think of something a bit different. I think the hardest part was seeing Princess Lea again. How do you say bummer in droid? Damn I must be getting old.
Well they got our money because of Christmas.
I saw her picture without makeup in the National Enquirer. If you're shocked by her movie aging then you better bring a vomit bag to the grocery store rack.
nflx looks like real buy at a PE of over 300.
sarc/
When the blockbusters show up in garage sale DVDs for 99 cents I'll watch them.
Hollywood doesn't have the balls to produce an original script anymore. JW and SW7 were both thin rewrites of old successes. Not too long ago there were still a few creative ideas out there.
Can't blame Hollywood too much either....it is the dumbing down of the viewers.
The problem is that Hollywood just makes too many films.
Nowadays the US churns out 600+ movies a year, that's two a day. Who the hell is consuming those?
There is only a mass market for about 50 films a year (max).
In any one genre there is only a mass market for 3-5 films a year, with perhaps kids films being the only exception.
If there are 5 other films being made in the same genre as your film and they have a bigger budget than you do, then you are in the shit at the box office.
There SHOULD be a market for thousands of movies a year. This is a massive country with widely diverse interests; a movie shouldn't require a potential audience of 300 million plus to be commercially successful.
However, the movie industry, like the music industry, is artistically dead, which is why the crap ain't selling. Notice the only things they do sell are effectively articles of nostalgia for an earlier age when creativity still existed in the creative arts.
Star Wars 7: The Forced Remix
Sorry, what pass for creative writers these days are all working for Rita Katz cranking out ISIS videos...
NFLX? No way! FaceBook is severely undervalued at $300 Billion...way short of it's true value north of a Trillion! It has a billion users ya know!
My daughter is very pretty, but in case she lets it go to her head, I showed her a few headlines at the grocery checkout:
"Jennifer Anniston ditched at the altar!!"
"Kardashian sisters all dumped by their boyfriends!!"
and in case an explanation was wanting:
"See over-40 celebrities without their makeup!"
That movie broke with reality so fucking often it was more of a comic than a thriller.
Just more feminist race mixing jew bullshit :D
Name a movie that doesnt break with reality.
Animal House.
Anus Invaders do Wall Street- The Trilogy in 3D
Idiocracy?
RIPS
Hunger Games: 2 hours of staring at a skanky ugly morose face. Yuch.
Nineteen-Eighty-Four.
Jackass
The first Matrix.
++ = All the Matrix movies.
- Bonus Keanu fans = John Wick is pretty BadAsS, check it out , on NFLX
AgentSMITH is NOW RECONSTITUTED AMONGST ZEROS
D**p Th^&at
Ferris Beuller's Day Off
Did you know that Matthew the jew Broderick killed a woman and her daughter in Ireland?
He paid 175.00 for it.
It must be awesome to be a jew and kill goys and get away with it.
http://youtu.be/fX94Vg0RMAE
I wait for the 20% off sales and kill them for 140.00. Deploy your capital efficiently.
thanks skinwalker - I would really appreciate any Zero's feedback on this movie. Afterall, it's reached a Billion 1st of movies... remember Lucas had to apologize for calling Disney's goons "White Slavers" after selling out to them for $4 Billion.
vigilantcitizen.com covers the overt freemason/illuminati symbolism rampant in the hollywack music & videos ... all the Star Wars posters featured the infamous one-eye photo ...
did anyone like this movie? (starwars7)
I thought it was ok if your expectations were in line..... a thin plot and expensive special effects plus return of a few old characters. Sorta like watching bugs bunny & road runner on saturday morning.... good mindless fun.
Can't say I liked it much. Maybe because I didn't see it and have no plans to. Any time there are huge promotional campaigns (which I am mostly unaware of because I don't see the ads) chances are the movie is at best mediocre.
Save your money. It is the same as the first Star Wars (episode IV) except Luke Skywalker is now a girl, Darth Vader is a weak-assed dork who cannot kill a janitor in a light saber fight (literally), R2D2 now rolls on a ball instead of a tripiod structure, and the bad guys still have a death ray built into a planet this time, instead of an artificial planetary satellite. I kid you not it is virtually the same with a bar scene and all. I was sorely disappointed that they could not come up with something that had one iota of originality. Pathetic!!!
I forgot to mention, in typical Disney-NWO-fashion, the surviving good guys are quite multicultural and all old white guys die.
I forgot to mention, in typical Disney-NWO-fashion, the surviving good guys are quite multicultural and all old white guys die.
Sums it up perfectly, I was disappointed I went to watch it, but it was more due to going with my brothers son then anything else.
A complete rehash of star wars, just with an even feebler empire and JJ Abrams signature style of movie, ie no build up of suspense or characters, a complete lack of any science (draining the sun, what are they going to orbit!), and a total lack of any emotional involvement with any of the cardboardy faces they roll out.
I was even disappointed with the SFX, the rebel alliance was reduced down to just 15 or so fighters, it was like watching the climax to a saturday morning cartoon because they had so few in the final battle. Best to avoid, while my brothers kid was not against it I did not get the feeling he was particulary impressed any more than watching some random cartoon.
Save your money. It is the same as the first Star Wars (episode IV) except Luke Skywalker is now a girl, Darth Vader is a weak-assed dork who cannot kill a janitor in a light saber fight (literally), R2D2 now rolls on a ball instead of a tripiod structure, and the bad guys still have a death ray built into a planet this time, instead of an artificial planetary satellite. I kid you not it is virtually the same with a bar scene and all. I was sorely disappointed that they could not come up with something that had one iota of originality. Pathetic!!!
Seriously F*** Hollywood and F TV. I am so sick of idiots I know asking me if I saw Star Wars. Even George Lucas recently called Disney "white slavers" after they lined his pockets to the tune of $4 billion for Star Wars franchise.
Lucas was decent when he started because he was friends with Coppola who is not slime and mostly hates Hollywood. Coppola basically gave Lucas his start with the excellent THX 1138. Alan Ladd at 20th Century Fox greenlighted Star Wars, the first film which was great. The next two were fair and the rest - were so bad that I did not see them. 10+ years ago I said f**k off to Hollywood and TV.
Shortly after Star Wars was a hit, Alan Ladd again at 20th Century Fox greenlighted Alien to be made. A classic.
Disney is just a vile shit company. They hire H 1Bs and force Americans to train them then fire them. No train, no pay or severance.
Disney pays their people at hotels, theme parks and other places basically minimum wage or less. They are total scum.
Americans are so stupid they would trade their freedums and liberty, which are mostly gone, for a new iPhone, facebook page update and the next installment of Star Wars. How f**king stupid are these people. At least Rocky 8 was slightly different then the next Star Wars will be.
Saw Star Wars 7 today (because kids wanted to see it). Started to think about 10 minutes in that it might be bad but never imagined how shitty it would turn out to be. Whoever wrote the dialog should be shot.
I assume the script was changed at Harrison Fords request to ensure that even if he becomes demented in a few years he can't ever come back.
Finally, is it just me or are they trying to re-create SW1 all over again? Update hero, update villain, add special effects, proceed directly to bank do not pass go.
Overall agree, yes Fuck off Hollywood. There is still some good tv but hard to find (The Wrong Mans).
- Rocky 8 ? what ?... i'm waiting for his grandson to come out against the new and improved TransGendr ApollA Creeda - She's been calling for any Rocky's to stand up and state their name ... ApollA Creeda she'll kikck'lil ol' GMO'eatin' Rocky the 3rd inthe nuts ... stand back BiiiitCheZZZ.... Tranny Apolla is On the Stage!!!!
Rocky 8, Stallone takes on the bully at the rest home.
Empire Strikes Back was a really cool movie. Everything after that was just filler...
Recycled and repackaged content....may as well cue up some old James Bond movies and see them again "for the very first time".
being a big fan of old black & white HollyWOOD''s classic screen gems, no way would I fork out $70 or more to take the family out for the latest indoctrination proPAGANanda flick...
let's see some Katherine Hepburn ..... gimme some Bob Hope *(as far as I know, his initial Palm Springs $50million listing was halved to $25 half a year ago...betcha could pick it up for $17.2 m cash) ....
look, we got to see ADULTS act when we were little.... these kids today see people of adult AGE act like kids ...
check out Infowars David Knight's "It's a Wonderful Lie" dub on Jimmy Stewart's movie ... excellent....
is KSA really proxying Iran / Russia a new War ? Are we really doing this folks ? anybody actually talk about this simmering cauldron of shit with their relatives over the ChristXmas ChanuKaWanzu Holy=Daze ? ....
Watch Shooter (2007) and get back to me about all movies being propaganda. CitizenFour, Zeitgeist, Four Horsemen and Network are also all mandatory viewing for zh-ers
I watched Zeitgeist (years ago) with an open mind and when it was done did a little research, finding the entire first section is full of falsifications. Acharya S, a pseudonym for author DM Murdoch, was one of the main "references" for this first section. People eat it up though, without any checks and balances, because it fits what their ears want to hear.
I'm mad as hell and I'm not going to take it anymore!
https://www.youtube.com/watch?v=dib2-HBsF08
All movies are new if you use the memory eraser afterwards.
Only 10 % of movies (and records) ever made their costs back. That was always so.
Most movie producers cannot compete with a campaign like Star Wars had, full spectrum access to all media channels with advertorials.
I am boycotting the star jews multicult feminist jerkoff movie for obvious reasons.
I don't get the jurassic world hype. Saw at the dollar movie.
It was stupid, but had a lot of manly red pill stuff (go figure from hymiewod, maybe they are making fun of the nerdy feminized male?)
Although opies daughter makes me long for a tall pretty red head.
To bad women are crazy and wild and ruined and pretty worthless.
If I had a biological weapon I would wipe out humanity....and start again.
hmmm....and let me guess: you would start again with "help" from Opie's daughter?
[BTW, the camera certainly does love her...I wonder how long before Howard is more famous for being her dad than for anything else he's done]
if he could get help from Jimmy Page's current flavor : http://www.dailymail.co.uk/tvshowbiz/article-3382031/Jimmy-Page-71-hand-...
i'm sure we could win any battle fighting for this Queen.... Please Jimmy, proCreaTe with this Goddess ! :)))))))))))))))))))))))))))))))))))))))))))))))))
No thanks. Sabet looks insane, literally.
Her eyes go from wonky, to sanpaku, judging from her pictures....
I bet she is a sex slave.