It’s been a while, I know. I started a new job that took up much of my time. In addition, I needed to gather data and clean it so it can be analyzed. For those of you that are not familiar with the work of analysts, this is the most tedious and time-consuming task. But I am back! Hopefully the data I gathered will allow me to launch several posts in the upcoming weeks. Anyway, I promise not to hibernate again (though the NBA playoffs are just around the corner)!
The idea for the comeback post came to me while reading about the contraction of the American middle class. This is similar to an idea I was contemplating in the last few years: that we are seeing less and less middle size films in cinemas. It’s an all or nothing situation, either huge blockbusters or small art house movies. Like the middle class – it isn’t abolished yet, but it is my feeling is that it is shrinking.
Of course, this isn’t an original idea of mine, and not that new (which also prevails in other media). Already in 2004, Tom Shone described this phenomenon. He dedicated a book to blockbuster movies, starting in the mid 70s of the twentieth century with the distribution of Jaws and Star Wars. As we can see, the seeds of the shift were first planted then:
That was the real casualty of the blockbuster era, not the art house, which rediscovered the joys of plot and thrived , but Hollywood’s middle class of movies: the Ordinary Peoples and Kramer vs Kramer and On Golden Ponds. They’re the films you don’t see a lot of these days, and it’s hard to weep too much (my emphasis)1
I am less judgmental than Shone, and I do miss those small films (or, at least, some of them). But as a researcher, I am interested in the meaning of this trend, that has continued since the original publication of the book.
Box office results are a tricky thing. I, for one, am not a fan of the weekly hype commotion that is part of the box office coverage. These reports usually focus on comparing the current week’s number to the same week in past years. This results in headlines such as “Best grossing PG-13 film with a black horse distributed in February in a non-leap year”. In my account, this is nothing but fun trivia that doesn’t say anything significant about the industry. Because when comparing films year-over-year many problems arise: if you don’t take into account inflation, new movies will always top the older ones. On the other hand, when standardizing inflation adjustment, Gone with the Wind‘s box office reign is guaranteed for as long as they continue to make Fast and Furious movies (i.e. FOREVER).
A simple solution can be in the form of counting tickets and not dollars. But this doesn’t consider cultural changes: the birth of television, internet piracy, and general changes in movie spectatorship. As Shone describes the cultural climate at the beginning of the blockbuster era:
There was no ‘popular culture’ as we know it today. That phrase, with its charge of punkish, publicity endorsed glamour, was decades off. It was just, ‘junk’ or ‘trash’ and to track it down required patience, dedication, and cunning, like being an enthusiast of postwar Hungarian Cinema today2
That is why I am using a relative comparison method: looking at each year as a closed unit, and comparing between the inner structure of each year. But we will start with a simple chart, depicting the increase in number of films released in the USA during the last 35 years.
We see that along the years, the number of films released is constantly increasing approximately at the same rate. There are two major leaps in 2002 & 2011. Both resulting from a decrease in previous years caused by strikes: 2000 saw a 6-month actors strike and the 2007-8 writers strike. The growth only came a few years later, as film production takes time.
Middle of What?
There is no absolute definition of the middle class. I have relied on the following one: a member of the middle class is any household that has an income that is between 75 to 125 percent of the average income. From here remodelling for movies is simple: middle class cinema is all movies which make 75 to 125 percent of the average movie box office income.
From this graph we see that the middle is becoming narrower (decreased by 150%), meaning that its part in the total number of films is smaller each year. But another interesting thing is that the high grossing films are also in decline (decreased by 67%), while the small films increased by 40%.
This is how the change in percentage of the middle class films looks over those years:
Though smaller films are the dominant type, just increasing doesn’t say how they affect the earnings. For this we need to look at another chart, one that is similar to the Pareto principle, AKA the 20/80 rule: 80% of activities come from 20% of participants. Adapting this to the cinema industry, we would expect to see that 20% of films within each year will be responsible for 80% of the income.
The actual results mesmerized me. We can clearly see that graph is shifting from 180° towards 90°. This is contrary to the long tail that has a major part in the Amazon or Netflix success. What we see here is that as the years go by, the percentage of films that are responsible for the bulk share of yearly revenue is shrinking. Basically, by the time “Pirates of the Caribbean 27 – Treasure in Home Care” will hit cinemas, 0.1% of movies will be responsible for 99.9% of the income. This means that the relevance of medium to small movies for cinema owners is no more than are human rights for Trump voters.
Is Cinema Dead?
No. And it’s not dying. As any art form, critics must declare its death every now and then, usually following new technology (which is sometimes a new art form in itself). There are more movies hitting cinemas every year, though most of them are getting a smaller piece of the pie (some are only there to be eligible for the Academy Award. But don’t hold your breath for a change from that direction). But some of them are eating from a different pie altogether: the internet. To fully understand the state of cinema economics in the 21st century, one must look at visual media. It is not only that Netflix and Amazon are buying distribution rights, it’s also that television as a medium is as interesting as cinema (and the snobs will add that it is even better). Follow-up research will compare online spectatorship (and other home entertainment prior to that) changes to that of traditional cinema.
At the same time, other media can also account for the reason the top of the list includes only mega-hits. This is can be ascribed to the rise of the cinematic franchise and shared universe concepts. These have changed the field. Studios, or rather media conglomerates, are now investing millions if not billions in movies, TV shows, comics etc., all interrelated, trying to create “must see cinema” and assure the viewers will follow all the characters they like in all possible ways. Those movies are big and expensive, and must bring back even bigger money. Hopefully, in the future, I can compare the change in box office results to the appearance of those terms online.
Though cinema isn’t dead, I do have a feeling that the romantic comedy is dead – but as I am a data analyst, I will wait to back this claim with some hard data.
- Tom Shone: Blockbuster (2004). London, Simon & Schuster UK. ISBN 0-7432-6838-5. p.314.
- Ibid, 6.
- ABC Analysis by Asaf Lev-Ari.