Hollywood Struggles to Make Money This Year

Today, The Hollywood Reporter has an article that attempts to answer the question: "What's Behind Summer's Free Fall at the Multiple."


Entering the Fourth of July weekend, revenue for Hollywood movies was down 15% compared to last year. Revenue is down 19.3% exiting the weekend.

As The Hollywood Reporter points out, revenues are down across the board.  All types of movies are having difficulty making the type of money ther made in past years.


2014 looks to be the first year since 2001 that a Summer Blockbuster failed to reach the $300 Million mark domestically.  X-Men: Days of Future Past is this year's top revenue earner at $227 Million domestically.  Last year, Iron Man 3 earned over $400 Million.


Less expensive movies, including comedies and family oriented movies have also struggled this year.

Blended (Adam Sandler) and A Million Ways to Die in the West (Seth MacFarlane) both struggled to top $40 Million.  Adam Sandler's 2013 Grown Ups 2 grossed $133 Million and MacFarlane's 2012 Ted grossed over $200 Million.

Disney's Malifecent is the only family show to hit the $200 Million mark this year.  How to Train Your Dragon 2 only managed $140 Million.


So we know revenue is down across the board, but why?


Part of this is due to Hollywood.  Viewers get tired of seeing the same material regurgitated on a regular basis.  Hollywood's lack of originality may play a part in the lower revenues this year.


The primary problem, though, is probably the economy.

You don't hear much about this from the "main-stream" media, but the economy right now really isn't in great shape.


GDP shrank 2.9% the First Quarter this year.  A shrinking economy means people have less money to spend, and discretionary spending is always the first thing people cut back on.  That means less movie money.

The bad economic news has continued.  The June job numbers showed an increase of 288,000 jobs.

Great, right?

Not really.  The economy gained 750,000 Part Time Jobs and lost over 500,000 Full Time Jobs.  That shift from full-time to part-time accounts for the entire gain in the number of jobs.  There is no increase in the number of hours being worked and there may actually be a decrease in work hours (and wages).


I like to dump on Hollywood for lack of originality  (Really, another reboot?) but I don't think Hollywood itself is to blame for the disappointing revenue numbers this year.  They're the victims of a struggling economy.  It's just that the media refuses to report bad news when in comes to the economy right now.