Universal hits record profits with no blockbusters in 2014

Very interesting article on Universal's success this year with a full slate of relatively inexpensive films:

http://www.forbes.com/sites/scottme...ures-zero-blockbusters-equals-record-profits/

This was a bit of an accident - for instance, Fast 7 was meant to be released this summer but was delayed due to the death of Paul Walker. But they ended up with 15 films with budgets mostly in the $5-50 million range, topping out at $70 million for their most expensive film, and made 30% more profit than the previous year. Another interesting thing to note is that only two of the films were sequels.

This is counter to what seems to have become the conventional wisdom in hollywood that it's better to go with fewer films and larger budgets, and focusing on huge franchises over individual, original films. This trend has been cited frequently as wiping out a lot of the mid-range productions (good article on this here: http://flavorwire.com/492985/how-th...-generation-of-iconic-filmmakers-mia/view-all).

It'll be interesting to see if this influences any of the other big studios to re-evaluate the wisdom of betting everything on huge summer blockbusters. With the huge wave of superhero films set to crash into cinemas here over the next few years I'm wondering if we'll see audience fatigue bring about Spielberg's predicted blockbuster implosion - if it happens, Universal's success this year could point the way back to a more varied output for studios in the future.

thanks for the article. Interesting read.

I wonder if cinema-going has gone up this year.

From what I gather, the consensus that a few blockbusters is the way to go is mostly due to the fact that on average, people go and see less and less movies each year. People tend to go to the biggest movies, so you need a blockbuster to draw people in.

If people are now increasingly seeing mid-budget movies, then I'd say one of the two assumptions are wrong (either people go to the movies more often, or they don't go to the biggest movies). Would be interesting to see which.

What's also good to see: the movies making the most money weren't sequels. A glimmer of hope

Based on the numbers here:

http://www.the-numbers.com/market/

There's been a gradual downward trend in ticket sales since the peak around 2002. Box office revenues have gone in the opposite direction, with a gradual increase over the same time period:

http://www.statista.com/statistics/187069/north-american-box-office-gross-revenue-since-1980/

Basically what's happened is that higher average ticket prices (due to premium offerings like 3D and IMAX) have offset the decline in attendance and kept profits up - which is part of the reasoning behind the emphasis on "event" movies which can support the premium tickets.

I suspect what's happened is that the general focus on blockbusters has created an 'umbrella' market - with blockbusters at the top and a sizable gap below that's no longer being filled. Universal managed to fill some of that gap this year, but if everyone moved into that space it's likely that the overall box office numbers would drop. Of course, it doesn't really matter what the overall box office numbers are because they don't represent profits; it's entirely possible that box office returns could drop and everyone would still be more profitable based on the Universal example.