Once again the box office is in crisis. Almost none of the fall dramas and comedies have succeeded financially. These films — original stories not based on existing franchises, often star-driven with budgets lower than a typical blockbuster — are struggling.
Cue the think pieces and finger pointing. Variety faults subject matter that isn’t entertaining enough. The Hollywood Reporter suggests problems with a wide release model. Industry podcast The Town blames moviegoers trained to ignore all but the biggest event movies.
But the main problem is demand, not supply. Younger generations are less interested in movies than older audiences are. Films are just one option among endless digital entertainment alternatives, from TikTok to PS5 gaming. No supply side fix — lower ticket prices, longer theatrical windows, fresh original screenplays, or new release strategies — can reverse that trend.
The movie industry’s split strategy will only deepen. High budget franchise films will still occasionally command massive audiences. Practically everything else will see demand continue to fall. A decade ago, mid budget dramas and comedies made dependable profits through theaters and DVD rentals. Today, that revenue has plummeted. Video on demand sales brings in less, and streaming services are buying scaled fewer films.
There’s only one practical remedy: lower budgets. Spending $40 or $50 million for a star-led moderately priced film is too high. Trimming budgets to $20 or $30 million provides more breathing room for a film to succeed as overall revenue falls.
This year’s failures prove the point. After the Hunt cost $70 to $80 million. The Smashing Machine, Bugonia, and Black Bag all cost around $50 million. All flopped in theaters, and none will make their money back through VOD or streaming. If these movies had been produced at $20 million or less, at least half would have been profitable.
Of course, some costs are hard to cut. Shooting on location in places like Tokyo (The Smashing Machine) or London (Black Bag) is expensive. But the four examples here are ensemble dramas with minimal action and visual effects. After the Hunt and Bugonia set most of their action in just one or two locations. Furthermore, earlier films from the same directors were typically well under half these budgets, even with similar screenplay ambitions and at least one recognizable star.
High actor salaries are the likely culprit. Stars like Emma Stone, Julia Roberts, and Dwayne Johnson command $10 million or more for otherwise low budget movies. But A-list stars are no longer a guarantee of major revenue, even with decent reviews and word of mouth. Under a new financial landscape, high tier talent must accept serious pay cuts for smaller films. They should accept contracts with revenue opportunities on the back end, and otherwise be patient for big windfalls on big budget studio films.
This year’s Roofman and Die My Love show how smaller budgets could work. Both movies have recognizable actors — Jennifer Lawrence, Robert Pattinson, Channing Tatum, and Kirsten Dunst — yet each movie was made for around $20 million. Admittedly, neither is a box office hit. Die My Love will end its theatrical run with probably little more than $10 million, Roofman at around $32 million. But with VOD and streaming, each movie could likely break even or eke out a small profit.
It’s true modest profits won’t entice your average financier. Why not stick to the mega-franchise bets that make hundreds of millions? Still, every year a few smaller budget movies break through. All it takes is the right awards buzz or a passionate audience. Materialists clearly connected with a romantic comedy fanbase and made over $100 million in theaters on a $20 million budget. Oscar visibility around The Substance and Anora helped boost each to over $60 million in theaters, with a long tail of success on streaming and VOD.
Beyond the economic angle, star driven indies matter culturally. They serve an important role for the industry, a “happy medium” that falls somewhere between international micro budget festival movies and big budget studio productions. These movies introduce audiences to new genres, directors, and other challenging fare beyond the biggest mainstream hits.
But none of this matters if these movies continue to bomb. The potential endgame is grim: studios eliminate mid budget movies altogether, narrowing their portfolio to a few IP-driven blockbusters each year. That would leave moviegoers with even fewer alternatives to franchise bloat, whether at theaters or at home. Here’s hoping Hollywood wakes up to its new reality.