Companies & Industries

Heroes of Hollywood's Summer Box Office (in a Half Shell)


Illustration by Josh Freydkis

The summer of 2014 was a disappointment for Hollywood. For the first time in 12 years, domestic box office revenues for the month of July failed to reach $1 billion. June’s total was higher, at $1.06 billion, but still off a hefty 16 percent from 2013. There has been some good news of late, however: Revenues for August, when the summer blockbuster deluge usually winds down, are on track to break $1 billion for the first time ever, helped by two flicks about unlikely teams of misfits: Teenage Mutant Ninja Turtles and Guardians of the Galaxy.

The surprising success of Paramount Pictures’ (VIA) Ninja Turtles reboot, which grossed $120 million in the U.S. and Canada in its first 11 days of release, can be explained by one of the short-term factors that often cause domestic ticket sales to soften: a dearth of kids’ fare. The situation was exacerbated by animation giant Pixar’s decision to move its planned May 2014 release of The Good Dinosaur to November 2015. But the larger problem behind this season’s box office shortfall is studios squeezing too many big action movies into a season that can’t be counted on to draw ticket buyers as it once did. That won’t be so easily solved.

Revenues for summer 2014 were never expected to be particularly huge, since there were fewer of the blue-chip franchises that often clutter the vacation-season calendar. Walt Disney’s (DIS) next Avengers movie isn’t due until next summer, and its new Star Wars installment is slated for December 2015. 21st Century Fox’s (FOX)Avatar 2—the sequel to the highest-grossing film ever—doesn’t come out until December 2016.

That doesn’t mean this summer wasn’t still insanely crowded with the so-called tentpole movies that studios hope to build into multi-film franchises. And therein lies a big part of the problem. The jam-packed release schedule of summer 2014 saw tentpole after tentpole, opening week after week—eating into each other’s box office. Godzilla, for example, had an impressive $93 million opening weekend in May, then quickly faded the following weekend as the top spot was taken by X-Men: Days of Future Past ($90 million), which was then vanquished the weekend after by Maleficent ($68 million).

Surprisingly, given their strong debuts, each of these films will fall well short of $250 million in total domestic ticket sales. Godzilla has barely made it past $200 million. Even Transformers: Age of Extinction, which opened with a heady $100 million in late June, has topped out around $243 million—a low for the four-film franchise.

The good news for all these movies is that they are doing exceptionally well overseas, as Hollywood films continue to chase expanding international markets such as China. In the U.S., however, the clutter will only get worse. “There’s not enough room in the slot we used to call summer,” says Lynda Obst, the veteran producer of Sleepless in Seattle and this fall’s much-anticipated Christopher Nolan sci-fi release, Interstellar. She’s also the author of Sleepless in Hollywood, a portrait of what she calls the “new abnormal” of franchise-obsessed Hollywood. “Movies are coming out too close together. We’re going to have to start redefining the season,” she says.

It could be argued that redefining summer is exactly what Warner Bros. Pictures (TWX) did on Aug. 6 when it announced that its buzz-heavy superhero team-up film, Batman vs. Superman, will open on March 25, 2016. The film had been slated for release on May 6, 2016 but found itself face-to-face with Marvel Studios’ Captain America 3 that weekend. By moving its heavy artillery ahead by more than a month, Warner has effectively set March as the beginning of the 2016 summer movie season. “It’s one of the most ballsy distribution moves I’ve ever seen,” says Obst. “That’s basically [Warner] looking at what happened this year and saying, ‘We have to get ahead of the whole summer. It’s not the bonanza it used to be.’ They’re moving out of the traffic altogether and saying, ‘You guys can all crash into each other.’ ”

Dan Fellman, Warner’s president of domestic distribution, confirmed as much in an early August interview with Entertainment Weekly. “We’ll be the first one up [in 2016], which is very important, and we’ll have six weeks before Captain America comes in,” he said.

Ironically, Captain America creator Marvel may have laid the groundwork for Warner’s decision. The current biggest release of 2014, Captain America: The Winter Soldier, opened on April 4 and managed to stay atop the box office for three straight weekends—demonstrating the viability of a spring release for a major summer movie.

Another reason Warner can risk opening the film earlier is that some of the traditional elements that made summer such an important release period are fading. Teenagers are no longer going to the movies like they used to. The Motion Picture Association of America says the number of 18- to 24-year-old frequent moviegoers plunged 17 percent in 2013, with 12- to 17-year-olds falling almost 15 percent. “That’s a systemic change in the business, and it’s not going away,” says Gitesh Pandya, editor of industry analyst Box Office Guru. “Summer is when we count on them to come out over and over again. But today the smartphone has become the new multiplex, and that is where so much of their leisure time is spent.”

Batman vs. Superman will feature two of the world’s biggest superheroes facing off (actually three, if you count Wonder Woman, who stars as well). Warner hopes the film will set up a panoply of DC Comics-related team-ups and spinoffs, much like the current run of lucrative Marvel Cinematic Universe films being released by Disney. Warner in August also announced release dates for nine other as-yet-unnamed films based on DC Comics, reaching to 2020. Five of those have traditional summer releases, but three are slated for late March or early April debuts.

Fox is also cranking out more movies with the X-Men family of characters, and Sony (SNE) is likewise trying to expand the Spider-Man films with additional heroes and matchups. There’s a risk this superhero arms race will try the patience of moviegoers. The success in August of Guardians of the Galaxy, a fairly obscure Marvel comic book title without the cachet of a Spider-Man or Iron Man, could be attributed to a thirst on the part of moviegoers for something more original. But some in Tinseltown think it suggests that studios may need to open their most-familiar franchise films in late spring, when they’ll appear freshest. “After that,” says Obst, “you start to suffer sequel fatigue.” For a Hollywood that’s poised to produce more sequels than ever, that’s a serious concern.

The bottom line: For the first time in 12 years, domestic film sales in July fell short of $1 billion. One culprit: too many summer releases.

Ebiri is a Bloomberg Businessweek contributor.

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  • VIA
    (Viacom Inc)
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