Skip to content

The Decline of Quality Cinema: Hollywood's Profit-driven Franchise Obsession

The Decline of Quality Cinema: Hollywood‘s Profit-driven Franchise Obsession

Over the past decade, Hollywood has become increasingly reliant on franchises, reboots, sequels, and tentpole films built around existing intellectual property (IP) rather than taking risks on original, creative screenplays. This franchise obsession is driven largely by economic factors as the industry tries to cope with declining theater attendance and the loss of critical DVD revenue streams. However, this short-term strategy is leading to declining quality, formulaic storytelling, growing audience fatigue, restriction of diverse voices, and damage to the long-term business model.

The Diminishing Mid-Budget Adult Drama
A major victim in Hollywood‘s franchise focus has been the mid-budget drama oriented towards adult audiences. Films like Kramer vs. Kramer, Alien, and Terms of Endearment that feature original stories, nuanced themes, and complex characters have declined drastically. Of the top 20 grossing films each year over the past decade, less than 5% have been non-franchise films costing over $30 million. Almost all major studio production and marketing budgets devote to big budget tentpoles hoping to spawn lucrative multi-film franchises.

The Economics Behind Tentpole Obsession
To understand Hollywood‘s tentpole obsession, one must follow the money. Production and marketing costs for blockbusters keep escalating, while declining domestic attendance has studios relying more on international box office.

For a major tentpole film today with a production budget over $150 million plus prints and advertising, studios now spend $300+ million per film when marketing costs are factored. Domestically, a film needs to gross around 2.5X its production budget to break even after theaters take their cut. So for a $300 million global spend, studios demand each film crosses $700-$800 million worldwide to recoup costs and make a profit.

Gone are the days when domestic box office dominated. Now overseas earnings account for 70% or more of total grosses on tentpole films, especially markets like China and East Asia. This means studios mold content for maximum global appeal, relying on simplistic plots, formulaic beats, and heavy CGI over dialogue to overcome translation barriers. The result is exponentially increasing budgets only sustainable through endless sequels, prequels and reboots tied to familiar IP.

In contrast, backing a $30 million adult drama requires a marketing spend of $50+ million for a total budget around $100 million. For a drama to break even, it likely needs $250+ million in box office gross – a difficult prospect with limited international appeal for dialogue-heavy films. Without the safety net of DVD sales like the 2000s, the risk-reward ratio makes studios stick with presold IP tentpoles. From 2007 to 2017, studios released half as many mid-budget films, shrinking from 180 releases to just 90.

The box office numbers demonstrate this franchise domination. The top five grossing domestic films of 2022 were Top Gun: Maverick ($718 million), Doctor Strange in the Multiverse of Madness ($411 million), Jurassic World: Dominion ($376 million), The Batman ($369 million) and Thor: Love and Thunder ($343 million). All sequels or franchise installments, several underperforming compared to previous franchise releases. Riskier, mid-budget fare for adults struggles to compete for screens or marketing dollars.

Loss of the DVD Safety Net
What catalyzed the sharp decline in studios backing original screenplays was the loss of once critical DVD sales revenue. In the 2000s, studios relied on home video to recoup profits on theatrical releases with softer box office runs. However, the rise of streaming gutted that backup plan. Domestic DVD sales revenue crashed from over $17 billion in 2004 down to under $4 billion by 2017. Without the safety net allowing adult dramas time to build word of mouth over months post-theatrical, studios shifted priorities.

Now every film must make a killing immediately in theaters on opening weekend or have franchise potential across multiple installments. Investing $30-$60 million in a risky, original movie aimed at adults brings too much uncertainty without theatrical profits propping up budgets. Instead, studios spend over $150 million on special effects spectacles with built-in audiences based on known IP and the safety of multi-film franchises. Marketing costs are also exorbitant, sometimes equaling half of a big budget film‘s costs. To break even theatrically after marketing for tentpoles, studios demand each entry crosses $700 million globally. So they stick with established brands like Marvel, DC, Star Wars or Avatar that give the best chance for those returns. Anything non-franchise is a rarity.

Streaming Has Enabled More Volume but Less Quality Control
The rise of streaming appeared a glimmer of hope to enable riskier prestige films without the pressure for box office domination. However, streamers have also demonstrated a franchise obsession, relying heavily on acquisitions or adaptations of well-known IP to drive subscriptions as evidenced by Amazon Prime Video‘s billion-dollar gamble on a Lord of The Rings prequel series. Netflix, Apple TV+, HBO Max and others are flooding the zone by outspending each other on content, but much of their originals adhere to tested genre formulas aiming for broad international appeal.

With so much cheap straight-to-streaming content flooding the market monthly, there is little incentive for studios to spend $30-$60 million on risky adult dramas likely to get lost in the endless scroll. Netflix has demonstrated time and again that subscribers favor bingeable, formulaic genre fare over costly limited series aiming for Emmys. Streamers have certainly enabled greater creative freedom at micro-budget levels where less risk is involved. But for mid-budget movies in the $20-$60 million range, streamers have disrupted rather than enhanced quality. Short of their tentpole franchise series rooted in established IP, streamers compete largely on volume.

Quantifying Franchise Fatigue
After over a decade of endless reboots, sequels and formulaic franchise installments , clear signs of audience fatigue have emerged. Disney stock took a hit in 2022 after CEO Bob Chapek admitted their key Marvel and Star Wars franchises demonstrated "franchise fatigue."amela

Recent Marvel efforts like Thor: Love & Thunder faced critical pans and declining box office returns both domestically and overseas compared to previous installments. Love & Thunder grossed $343 million domestic and $760 million worldwide – sharp declines over Ragnorak‘s $315 million domestic and $854 million global totals. Weaker reception met other 2022 MCU films like Dr. Strange and the Multiverse of Madness along with Disney+ series. Obi-Wan Kenobi and Boba Fett marked recent disappointments on the Star Wars front.

These franchises still post big numbers, but are delivering diminishing returns from height of their popularity a decade ago. Nostalgic IP driven projects resonate strongly males 25-40 who were kids and teens when Marvel and Star Wars ruled the culture. But for younger Gen Z viewers and female audiences, storytelling risks around aging 20th century IP face mounting indifference. As cultural tastemakers, these younger demos crave freshness rather than nostalgia.

Hope Emerges From Independent Studios
Despite risk aversion and creative stagnation among major studios, some positive signs emerge from independent film companies like A24, NEON and others. Recent acclaimed hits like Everything Everywhere All At Once and The Farewell proved original screenplays can break through on modest budgets without relying on IP.

Such studios take risks on fresh filmmakers and non-IP driven stories ignored by major studios beholden to franchise management. Recent years saw indie studios backing bold visions like The Lighthouse, Uncut Gems, Hereditary, The Green Knight, The Souvenir and more. Many find success on streamers after small theatrical releases. And some like Everything Everywhere All at Once even became mainstream hits.

What The Franchise Model Risks
While major Hollywood studios remain caught in a short-term spiral of franchise dependence, growing cultural boredom and declining quality threaten the industry‘s future. Beyond bored audiences, the obsession with proven IP restricts opportunities for fresh voices that could redefine Hollywood storytelling.

Endless reboots and franchise installments revolve around narrow demographics – almost exclusively men aged 25-40. The paucity of lead roles for women, people of color, and LGBTQ+ characters diminishes the chance to tell stories relevant to wider audiences. Fresh voices get relegated to micro-budget indies while studios entrust $300 million tentpoles only to proven veteran directors and writers.

unique perspective on how overreliance on tentpoles and disregard for midbudget films damages exhibitors and ultimately audiences who won‘t pay rising ticket prices just for declining quality spectacles. More color on Chinese censorship?

Additionally, the loss of mid-budget films cripples theaters without consistent, year-round fare enticing subscribers. Streaming services can drop new films weekly with little added overhead. But exhibitors rely on a pipeline of releases to justify keeping doors open. With windows collapsing, theaters count on mid-budget adult fare to balance periodic tentpole releases. Without films budgeted in the $20-$60 million range, the pipeline runs dry. Already chains like Arclight and Pacific Theatersshut down in coastal markets. Regional cinemas lose leverage to block studios demanding higher cuts of ticket sales without consistent product driving attendance.

The Way Forward
While the short-term elephant in the room demanding endless IP and sequels won‘t vanish overnight, signs point to a looming cliff for the franchise formula. The next generation of audiences, tastemakers and talent will likely push a reformation rooted in originality of vision over familiar brands.

Once the current franchise-driven pipeline exhausts itself commercially over this decade, hunger for risk-taking and groundbreaking stories could catalyze a new wave of cultural innovation. Whether emerging from indie studios or new distribution models, creative renewal rarely springs from the establishment centering old ways.

Just as Hollywood emerged from the decaying studio system sparked by independent mavericks like Coppola, Scorsese, Allen and Hopper in the late 1960s, the next seismic shift may arise from outsiders while lazy majors lean on sequelizing. Exciting writers, directors and stars surface regularly in indie cinema. As mid-budget specialty studios like A24 and NEON cement their influence this decade, they may well plant seeds blossoming into the next great wave of American filmmaking.

That artistic reformation can‘t emerge soon enough for movie lovers bored with formulaic franchise comfort food. But based on patterns throughout film history, the next golden age likely waits just over the horizon. When quality transcends safety, when talent triumphs over IP, theaters can reclaim their wings to transport audiences away from the strains of daily life into the flicker of dreams only the best storytellers capture on film. Just like the many indie mavericks, we too shall wait patiently for the ground to shift again.