The economic story that the box office illustrates in a time when mega-blockbusters dominate ticket sales

In 2019, Avengers: Endgame, The Lion King, Toy Story 4, Captain Marvel, and Spider-Man: Far From Home have taken the top five spots for highest gross in the domestic box office (Box Office Mojo). 

What do these successful titles have in common, besides the fact that you could meet all of the films’ characters at a theme park somewhere? 

Well, it’s just that–all of the films are based on existing intellectual property (IP) with established fan bases. Studios are betting on these tentpole films in the box office, because they draw audiences into a theater and away from the social media, streaming services, and video games that have, in recent years, made it much more difficult to attract eyeballs to cinemas.

Beyond garnering attention, mega-blockbuster films bring in multiple sources of revenue for a studio, making its parent company look favorable to Wall Street investors. When a viewer gets hooked on Avengers and its cinematic universe (because how could one not?), that person is likely to be back for the next film, coming out in a year or so. Furthermore, being an Avengers fan will make a $129.00 Disneyland ticket seem much more attractive. Here, one can experience a superhero meet and greet, and soon, the Avengers Campus: a space at the park explicitly dedicated to the Marvel universe. Oh, and of course, you’ve got to buy your child an Iron Man costume for Halloween. 

From just the movie ticket, theme park pass, and merchandise purchases made by one family, Disney is making several hundred dollars in revenue. Conglomerates like Disney seem to be doing all the right things to adapt to the rapidly changing marketplace, taking advantage of revenue streams left and right. However, studios that do not control lucrative IP are being struck hard by the age of mega-blockbusters. 

This year, Warner Brothers has released seven small and mid-tier budgeted films that bombed at the box office, including The Good Liar, Motherless Brooklyn, and Blinded by the Light. About five to ten years ago, the studio could have deployed star power, marketing dollars, and a suitable opening weekend date to mitigate the risk of a box office flop. But nowadays, it is almost impossible to find a weekend not taken by something popular, such as the newest Pixar film, or to beat negative ratings on sites like Rotten Tomatoes before the film has even been released. If there is an excuse not to make the trek out to the theater, people will take it. If it’s not something from the Star Wars franchise or a beloved animated film, is it worth the time and money?

Despite having several of its films bomb at the box office, Warner Brothers is doing alright with the $1 billion in worldwide ticket sales made by The Joker. And moving forward, the studio is not ridding itself of mid-budget films. Instead of having a wide release in theaters, a film such as The Good Liar will likely be released on the WarnerMedia streaming service, HBO Max. 

Box office sales are indicating a shift in consumer habits surrounding entertainment; people are choosing to spend their own scarce resources—their money and attention—in places other than the box office. There is a plethora of content available to society right at home and for a low price via social media, video games, and online streaming platforms. People have always had to choose how to spend their money on entertainment, but now more than ever, it’s also about where consumers choose to spend their time. 

The box office illustrates a landscape where the stakes are much higher for studios; audiences are less likely to spend their time and money on a mid-budget film that may or not be good. They can watch an Oscar-nominated film at home on Netflix instead. 

To adapt to the entertainment landscape in 2019, studios are learning from the box office that it’s now a game of “go big or go home.”