My problems with Hollywood - Pt I

I started writing this post intending to moan about Hollywood's recent lack of originality, and its studios increasing proclivity to produce sequels and spin-offs instead of bringing new scripts to our screens. But while writing the first sentence, it occurred to me that I may just be acting like a grumpy old man: you know, looking at the past with rose-tinted glasses, going on about the "good old days", even though these "good old days" may actually have been worse than today.

So I did what a decent data geek does: I built a database of the top 10 box office hits for each year from 2017 going back to the 1920s, and crunched the data. You can read about how I built the database, and access it yourself, here. My conclusions:

Hollywood is relying more on sequels...
Here is the % of top 10 films that are original scripts by year (note that "original" here excludes not only sequels and spinoffs but also remakes and adaptations - refer to the link above for details on how I classified the films in my database).

And most original scripts since 2010s are animations. In the 00s, 37% of original films were cartoons; in the current decade, the percentage is 67% (the only original top 10 films of this decade have been Gravity, Inception, Maleficent, Ted and Get Out, though the latter's only included because it is in 2017's top 10 so far.). Not that there is anything wrong with cartoons - many are exceptionally good; but it would be nice to have some original live action films every now and then.

(Of course, it could be that if we looked at the entire set of films produced instead of only the box office top 10, the % of original scripts would be much higher. In fact, given that it is becoming increasingly easy for wanna-be director hipsters to shoot indies, I'd expect this to be so; it may also be that big studios themselves are producing more original films, and it's just consumer tastes that have changed, propelling sequels to the top 10. But I doubt this; I think the studios put the bulk of their resources, both in terms of production and marketing, behind sequels.)

For the record, here's how the other types of films (remakes and adaptations) have fared:

... and it's not really making much sense to me

When I thought of writing this post, and before doing the data analysis, I was planning to make some wishy-washy statement about how, yes, sequels are more profitable and all, but oughtn't Hollywood care about artistic merit too? (Which, wishy-washy or not, is something I genuinely believe.)

But since I got the data together anyway, I decided to look into how much more profitable sequels are, compared to original scripts. The answer is, actually, they are less profitable:

(ROI here is calculated as (Revenue/Budget - 1). Both budgets and revenues have been adjusted for inflation to reflect 2017 prices.)

As you can see, the average original film has a far lower budget than sequels, but roughly the same revenue - and a higher IMDB rating. Now, it's true that these numbers are a bit skewed by one-off massive successes - in particular, the reason the non-weighted average is so high for original films is the Blair Witch Project, which had a tiny budget (~$100K) but proved to be a massive box office success (~$240 million). So I included the variance here: this is a measure of the extent of divergence in the data; the higher it is, the more diverse the values in the set - hence, variance is used as a measure of risk.

As the table shows, though sequels are less profitable than originals, they have much lower variance - in other words, they are a safer bet. Or so it looks at first glance: I also ran the data excluding the top 20% of box office hits - hence taking out of the picture once in 100 years outliers like the Blair Witch. Yet here again original scripts beat sequels:

This analysis is incomplete, however, because it suffers from survivor bias: what is says is that amongst films that made it to the top 10, original scripts outperform sequels. What about those that didn't? Like before, it may be that looking at the entire set of produced films would yield different results. Still, this indicates that if Hollywood executives placed more emphasis on discovering good original scripts, and marketed them well (not like they did, say, with the Nice Guys, which was an excellent film that no-one watched), they might do a service to their shareholders as well as to their consumers.

Higher budgets do not translate to better films

First I looked into the correlation between a film's budget and its IMDB rating. It's non-existent. Then at the correlation between a film's budget and its revenue - after all this is what an executive will be interested in. Again, non-existent.

Looking at the same correlations but only for sequels and spinoffs, I find that they are slightly stronger, but still not significant. So then I looked at a few recent franchises to see how their budgets, ratings and box office performance have evolved, all with the objective of answering the question, is a higher budget worth it?

The answer varied depending on the franchise, from kinda...

F&F films have maintained a remarkably consistent rating, but have been peforming increasingly well at the box office (the reason for the dip on the chart on the right is because the latest installment is still in theatres).

The Dark Knight films have also maintained a high rating and have performed well at the box office - though the significant increase for the third installment did not translate to higher revenue, nor to better score.

... to the no:

All these franchises have increased budgets vs the original, yet seen consistent or declining scores and revenues.

... to the God no:

With the exception of Jurassic World, these franchises have seen significant decline in ratings and box office performance in spite of budget increases vs the original.

The one interesting outlier: Mission Impossible has had lower production budgets for the last two installments vs the first and the previous ones in the series, but these have been better received by the viewers. Weirdly, however, they have not performed as well in the box office:

So looking at this data, if I were a studio executive, I'd really challenge my directors to explain why they want more money, when earlier productions had both higher artistic merit and better financial performance.

Having established that Hollywood is failing to produce original films, and that they are not particularly good at managing their money either, and given that I had already gone through the trouble of building a film database, I thought to have a look at a few other trends. Here are a few resulting observations:

Films are worse now than in the 60s

It is not just I who is looking at the past through rose-tinted glasses: older box office successes have a higher average rating than more recent ones:

Unfortunately, my database has a very low number of films from before the 60s, which is why these early decades have such a high average. But still, the 60s have a decent sample size, and a higher rating that recent decades.

Looking at the top 3 films for each year, it looks like earlier decades had higher average earnings too:

I imagine this is due to consumers' having more choices these days.

The highest grossing genre is animation; the highest rated is drama

Horror/Thriller, appears to be the most profitable, even excluding the Blair Witch project. Romantic films are the least popular (probably because Twilight falls into this category), followed by comedies. These probably explain the decrease in the % of comedies, and the increase in animation films:

Strangely, though, dramas are also decreasing, even though they are well liked and the second most profitable (though they do not make big box office hits).

The average film runtime has fluctuated widely through time

A few years ago, I watched a film with a friend, after which he commented: "man, that was too long. I swear there was a time you could watch a flick in an hour. Now everything seems to be two hours long". It turns out he's right: films are longer than they were in the 80s, but shorter than they were in the 50s:

As it turns out, longer films are perceived as being better, though this may be because old films were longer, and as we saw earlier, older films have a higher rating:

In summary: Hollywood is pretty broken; it may be that it needs a Moneyball solution - which would help bring some better stuff to cinemas. It would be interesting to compare films to TV by the way; it seems to me that the quality of TV (and Netflix/Amazon/&c) series is getting better and better. 

A few decades ago, excellent programmes like Freaks and Geeks and Firefly were getting cancelled due to low ratings; but I think we will see fewer cult series getting cancelled in the future. A TV station can only broadcast 24 hrs of content per day, and even fewer profitable hrs; so a niche show with few viewers will get axed in favour of a (perhaps blander) one that would appeal to more people. Imagine that viewers' preferences are represented by the following Venn diagram:

The big circle in the middle represents the number of people who watch a mainstream series, like Friends. The smaller circles represent more niche shows. These shows may be profitable - i.e. their ad revenue may exceed their cost of production; but a TV channel will just rank them by profitability, and will fit in as many of the ones at the top of the list as it can in its schedule.

Netflix by contrast will produce any series that's profitable (more or less, it also needs to take into account its cost of capital &c, but let's keep things simple here). It may still be the case that some excellent shows will never get produced, because they appeal to very few viewers; but it's certainly a better deal for the consumer than TV and cinema.

So perhaps we can (have to?) place our hopes for art on what was once seen as the lowest of the lowbrow entertainment media. At least until a Hollywood exec reads this and says "you know what? Screw sequels".