The figures stopped making plain sense somewhere around 2022, and the industry has been discreetly wrestling with that ever since. A film costs $250 million to create. An additional $120 million is added via marketing. After separating with movie theater chains, the studio keeps around half of the theatrical revenue. Therefore, the production must make at least $700 million at the worldwide box office in order to break even, not profit. That figure used to characterize a huge hit. The floor is now described.
One Battle After Another is a useful case to analyze. A serious movie with real critical support, a recognizable intellectual property, and a seasoned director—exactly the kind of subject that studios built their tentpole model around. Its box office performance of $200 million would have been judged reasonable by historical standards, possibly even encouraging for a challenging piece of material. At a $200 million budget with regular marketing expenditure attached, it reportedly lost the studio upwards of $100 million. The film performed. The model didn’t.
The aspect that is not given enough direct attention is cost inflation. The cost of visual effects, the assurance of A-list talent, the globalization of production necessitating multiple international locations, and the rising baseline expectations audiences have for franchise films have all contributed to Hollywood’s production budgets rising for decades. Technically, a Marvel film from 2015 and a Marvel film from 2025 are two separate things, and the difference costs money. However, viewers have not increased their moviegoing in proportion to cover those expenses, which is the point of contention. The equation’s supply side has become inflated. The demand side hasn’t kept up.
The at-home option has significantly improved in the meantime. A casual viewer can now have a truly satisfying experience with a 65-inch TV, a good sound system, a streaming subscription, and the patience to wait three months. Opening weekend enthusiasts, event film audiences, and families with small children who require the outing as much as the movie are the ones who continue to frequent theaters in large numbers. Those casual viewers who used to show up in the third week of a successful run and propel a strong movie into lucrative territory have mostly shifted their viewing habits to their homes. Word-of-mouth no longer has the runway it requires because the theatrical window that once allowed studios to develop word-of-mouth has shrunk.
Although a bit overdone, the franchise fatigue argument is valid. The problem isn’t that audiences have stopped liking familiar characters — they demonstrably haven’t. The issue is that the studios developed so much franchise intellectual property for so long that even devoted viewers began making decisions within the category because they saw it as dependable. The audience that used to see all five superhero movies in a given year now only sees two. The flicks didn’t get worse. They got crowded out by themselves.
It’s intriguing to observe the revived discussion about mid-budget filmmaking in the studios that are paying attention. Films in the $20 to $80 million bracket bear drastically different risk profiles, and numerous recent instances have achieved returns that appear quite appealing compared to the tentpole ledger. The industry is aware of this. It has long been renowned in the film industry. The obstacle is fundamental – the entire development, marketing, and distribution infrastructure was built around blockbuster films, and reconstructing it for a different product mix takes longer than addressing the problem does.
