What started as an ambitious gambit by Marvel -- the shared universe -- has spawned a whole new way to make movies, and some box-office experts say it could spell doom for the film industry.
In a report dubbed “Memo to Hollywood: You Can't All Be Successful Doing the Same Thing,” Cowen analyst Doug Creutz explains how he believes the push toward big-budget releases framed around superhero franchises is reaching a tipping point that could lead to even more diminishing returns in regard to box-office take. As the title to his report makes clear — not every massive franchise can be a hit.
In a lot of ways, the crux of Creutz’s argument boils down to one simple idea: franchise fatigue. Just about every franchise with any value is either being rebooted or revived these days, and he posits that all those insanely expensive tentpoles will lead to diminishing returns for everyone. Here are some excerpts via The Hollywood Reporter:
“The box-office picture continues to get worse as studio strategies are clustering around tentpoles. 2014 is the fourth year in a row that box-office and film quality data suggests that a downward shift in theatrical demand curve has taken place. Additionally, we are increasingly concerned that the convergence to nearly identical film franchise strategies at the major studios risks damaging the ecology of the business and accelerating already existing negative secular trends…
The prevailing narrative at the studios continues to be one of box-office fluctuations being driven primarily by release slate appeal. Last summer was by some measures the worst summer the industry has had since the original Star Wars came out in 1977, despite the fact that the summer saw launches in the Spider-Man, X-Men, Planet of the Apes, How to Train Your Dragon and Transformers franchises, several of which were very well-reviewed. We think this narrative is looking increasingly flawed. Moreover, we think there is cause for increasing concern that the major studios are all moving towards increasingly indistinguishable strategies, as they all put more and more eggs in the franchise picture basket.”
Not surprisingly, much of Creutz’s assessment focuses on the superhero genre. It’s easily the biggest growth segment in the industry, with both Marvel and DC launching massive release slates as everyone from Fox (X-Men, Fantastic Four) to Sony (Spider-Man confusion) try to rip a few pages from the playbook and do the same. Creutz said he believes that as the glut of films in a genre goes up, the overall revenue per film goes down:
“In general, we think that the major studios are moving too far towards a reliance on film franchises in the action and animation genres. This is most obvious in the superhero genre where the number of major films per year will double from three to four in 2011-15 to seven to eight in 2016-17. Our experience with the animation genre suggests that this is very likely to lead to a decline in per-film box office due to competition.
While we think that the studios with the least appealing content and lesser IP are likely to carry the most risk, we believe that even Disney, which has the most powerful-looking collection of IP, will probably see its film performance negatively impacted as all the other studios crowd into the same corner of the film universe.”
The report makes some interesting points about the evolution of the superhero genre, and though Marvel has made an excellent effort to stay ahead of the curve by diversifying within the genre (i.e. space adventure, political thriller), you do have to wonder at which point you finally go over the cliff. We’ve already seen inklings of that with Sony’s lack of success with Spider-Man, and you can’t help but wonder with which franchise the next shoe might drop.
What do you think of the fate of the superhero genre? Are we living in a renaissance, or on the verge of an epic collapse?
(Via The Hollywood Reporter)