Pennywise isn’t a superhero—but after It broke box office records over its opening weekend, he might want to consider a career change. A clown that spends his time in the sewers looking to drag his victims down with him has managed to elevate Hollywood’s year at the box office, which, to this date, was looking a little bit like poor Georgie in the opening scene of It.
To say that Hollywood’s summer was rough would be an understatement. Since early March, the following films have either underperformed or outright bombed at the domestic box office: (deep breath) King Arthur: Legend of the Sword, Ghost in the Shell, Valerian and the City of a Thousand Planets, Baywatch, The Dark Tower, The Mummy, Alien: Covenant, Pirates of the Caribbean: Dead Men Tell No Tales, Transformers: The Last Knight, War for the Planet of the Apes, and Snatched. Some of these films had no real chance at succeeding. Valerian and the City of a Thousand Planets lacked any real star power and was simply too strange a film to achieve mainstream success; King Arthur: Legend of the Sword was a massively-budgeted reboot of an intellectual property that has never grossed more than $51 million at the domestic box office, and Ghost in the Shell was a niche property whose production was mired in controversy from the start.
There has been plenty written about the summer box office malaise. Articles looked for one big lesson that Hollywood could learn from the summer’s struggles. The truth is that there a number of lessons that film studios can take away from the past year in film. The simplest one is, “make better movies.” However, a comprehensive Medium post showed that contrary to popular belief, there was no correlation between Rotten Tomatoes scores and box office performance. Any movie fan will know that box office success is very rarely an indicator of a film’s quality.
The post also indicated that audiences are getting more adept at judging the quality of a film, which means that they become more discerning about what movies are worth seeing and what movies aren’t. This seems to bear out the general notion that if a movie has strong reviews and good word-of-mouth, then it will have a good chance at finding success. Such examples from this past year include Logan, Baby Driver, Dunkirk, and Wonder Woman, all of which either lived up to or exceeded expectations at the box office.
So what are the lessons studios can learn from this past summer’s box office? There’s one major issue with asking that question: it’s not necessarily fair. That’s because the idea of a “summer blockbuster” has become antiquated. This trend has been years in the making, as movie studios pushed the start of the summer movie season to early May. Last year, Warner Bros. released what was one of its tentpole films, Batman v. Superman: Dawn of Justice, in early March. These moves continued into 2017: the highest grossing film of the year so far, Disney’s Beauty and the Beast with more than $1.2 billion worldwide, was released in mid-March. Kong: Skull Island and Logan, both in top 15 for domestic gross for the year, were released in March, and Fate of the Furious hit theaters in April. Going forward, two blockbusters will most likely come close to or surpass a billion dollars worldwide: Thor: Ragnorak (to be released November 3) and Justice League (to be released November 17). These superhero one-two punch are going to make November a huge month at the box office (a month usually reserved for just one big release), and then December will see The Last Jedi arrive in theaters, which will easily make at least $1.5 billion.
The number of blockbusters released within the late-May to late-July window, the time that was once considered to be the summer movie season, has declined significantly. Studios are adapting to spreading films out over the course of the year. A look at Disney’s 2018 release schedule confirms this: Black Panther will be released in February, Avengers: Infinity War and the still-untitled Han Solo movie will hit in May, The Incredibles 2 in June, Ant Man and the Wasp in July, and then Wreck-It Ralph 2 in November. Disney avoids oversaturating the market quite adeptly, and they appear to be following a similar release pattern as they did in 2017. This plan is not foolproof. Pirates of the Caribbean: Dead Men Tell No Tales was released in May, a full three weeks after Guardians of the Galaxy Vol. 2, and still underperformed. But release dates do matter, and avoiding competition between Disney films is an excellent way to maximize ticket sales.
One studio that ran into trouble with its release dates in 2017 was 20th Century Fox. Alien: Covenant underperformed badly in May, which can most likely be attributed to franchise fatigue and audience confusion concerning the film’s relationship to its predecessor, Prometheus.The studio’s summer tentpole, War for the Planet of the Apes had a good combination that should have led to box office success. It was the third film in a trilogy, which avoids franchise fatigue, and it received positive reviews with a 93% fresh rating on Rotten Tomatoes. However, there was one problem: the film’s release date, July 14, was wedged between a Marvel superhero film, Spider-Man: Homecoming (released July 7) and a Christopher Nolan film, Dunkirk (released July 21). War opened well with $56.5 million in its opening weekend, but plummeted by 62% in its second weekend when matched up with Dunkirk. The film finished with $145 million domestically, and a stronger worldwide showing made the film profitable, but Fox would have been smart to move the release date further back to avoid conflict with Dunkirk and Spider-Man.
A move to the first weekend of August may have been the most savvy move for War. This August was historically bad. The Hitman’s Bodyguard three-peated at number one, finishing first one weekend while grossing less than $10 million. This doesn’t have to be the case. Warner Bros. dropped Suicide Squad on August 5 of last year, and despite negative reviews, the film opened big (setting an August record with $125 million) and ended up grossing $325 million, thanks to weak competition. The Dark Tower tried to replicate Suicide Squad’s success this year, and bombed amidst poor critical and fan reaction. There was room for a movie to do well in the vacuum of August. It’s a pity that War was so overlooked after being jammed between two huge releases.
But release dates aren’t the only things that matter. A lot of a film’s profitability depends on its production budget. The point seems obvious, yet Hollywood continues to make frustrating mistakes. The previously mentioned Medium post shows that increased production budgets are becoming less and less of a solid projection of financial success. Big-budget superhero movies are essentially the only surefire hits left in the movie studio’s arsenal. As previously mentioned, King Arthur: Legend of the Sword is the best example of idiotic budgeting on a property that has no proven track record.
To be clear: this is not a call on Hollywood to start drastically slashing the budgets on non-superhero or non-franchise films. But a more frugal approach would bode well. Take two of Warner Bros.’ biggest hits from this year. Wonder Woman was made for a (relatively) reasonable $149 million, while Dunkirk was budgeted at $100 million (although other reports put the number closer to $150 million). Wonder Woman broke the $400 million mark domestically to make it one of the highest grossing superhero films in the United States, but had an even split with its international gross, putting it around $820 million worldwide when all was said and done. This put it second in the DC Extended Universe’s pantheon behind Batman v. Superman’s $873 million gross. However, Wonder Woman was approximately $100 million cheaper to make, which means that it is the most profitable film in the DCEU so far. Similarly, Dunkirk’s budget meant that it was profitable despite being Christopher Nolan’s lowest grossing film in years, having just crossed the half-billion mark worldwide. Simply put, while total austerity is not in order, studios could benefit by keeping budgets reasonable.
An excellent example of a genre that budgets smartly is the horror genre. Horror movies are notoriously cheap to make. It was made for $35 million—and that’s towards the upper end of the typical horror budget. Annabelle: Creation was made for just $15 million, and the smash hit Get Out had a paltry budget of $4.5 million. The genre consistently provides studios with their best returns on investments. Blumhouse Productions has built its entire business on funding cheap horror movies that have generally been hits with audiences. The studio has started to branch out into different genres as well, with one thing in common: low budgets. Warner Bros.’ Conjuring franchise has grossed a total of $1 billion overall on a combined budget of $81.5 million between four films. The future certainly is horrifying, just not in the way that many pundits think.
What will muddy the waters a bit more for Hollywood’s future is the international market. Transformers and Pirates of the Caribbean were once considered stalwarts when it came to franchise movie making. The third and fourth Transformers films grossed more than a billion worldwide; as did the second and fourth Pirates of the Caribbean films. Both of these franchises did well domestically, but made more than 60% of their total grosses overseas. The international market saved both of their latest entries after they underperformed horribly in the United States. Transformers: The Last Knight and Pirates of the Caribbean: I Don’t Feel Like Typing This Annoyingly Long Subtitle Anymore grossed $130 million and $172 million, respectively, in the States. Both films ended up gaining just 21% of their total revenue stateside. But even the response of the international audiences was tepid. Previous entries in these franchises crossed the billion dollar mark thanks in large part to international grosses. Transformers: Age of Extinction (2014) made more than $850 million overseas, which goes to show that there really is no accounting for taste. By contrast, today, international audiences are no longer responding to franchises that were once goldmines. (The one exception to this appears to be the Fast and Furious franchise. Fate of the Furious grossed more than a billion dollars overseas alone.) Conventional wisdom once dictated that overseas audiences were drawn to big-budgeted action films with loads of special effects; CGI is, after all, a universal language. With these two franchises underperforming, Hollywood will probably have to keep leaning on superhero films as tentpoles.
Overall, the 2017 box office is going to be fine. It is breaking records, Blade Runner 2049 and Murder on the Orient Express should both do well, Justice League should get close to a billion, Thor: Ragnarok will most likely continue Marvel’s winning streak, and The Last Jedi will threaten to outgross The Force Awakens during its opening weekend. There are still legitimate reasons to worry, though. The rise of streaming services and market oversaturation do loom over Hollywood’s future. Superhero movies and Disney live-action remakes are starting to corner the market, which raises questions as to how much longer the superhero bubble can sustain itself. But if one thing’s for certain, it’s that film studios will survive. It just becomes a question of whether audiences will trek to the theaters to join Pennywise in the sewers or to save the world with the Justice League, or if they’ll start to prefer the cinematic experience from the comfort of their own homes.
All box office statistics and production budget information are taken from Box Office Mojo.