Worst Box Office In 25 Years: Hollywood’s Problems Are Permanent & Deep

empty movie theater AFP

Even before this catastrophic Labor Day weekend is factored in (more on this below), the domestic 2017 box office is in hideous shape. This year is –6.3% behind 2016 and continues to fall behind 2015, 2013, and 2012.

If you figure in inflation, those numbers are even worse. For example, in 2012 the average ticket cost $7.96. Today it is almost a full dollar more at $8.89. Yeah, things are that bad and will look even worse on Tuesday.

With no apparent faith in their own product, this is the first Labor Day in 25 years where a new title has not been released on more than 1,000 screens. Over this weekend last year, the box office hauled in nearly $130 million. This year will do about a third of that.

Summer attendance is at a 25-year low.

The summer box office is down a whopping –16% compared to 2016.

Can a handful of titles — It, Kingsman 2, Bladerunner 2, Thor 3, Justice League, Star Wars 8 — save an entire year? Doubtful. Pull out of a dive? Maybe. Still, we are talking about only six big titles over four months, which is about on par with last year’s Passengers, Rogue One, Doctor Strange, Fantastic Beasts, Inferno, Sully, and Magnificent Seven.

Hollywood has had bad years before and it was not the end of the world. This year feels different, like we have crossed a Rubicon. Investors appear to agree.

We begin with the fact that some 15 years ago, the movie business stopped being a growth business. While revenues have increased a bit, admissions have remained stagnant. Those revenues were boosted through premium priced gimmicks like 3D and Imax.

One can argue that the worldwide box office has opened up considerably, and while true, entry into that market is an insanely expensive gamble, meaning a CGI’d frachise film, a $250-$350 million entrance fee when you account for production and promotion costs. Moreover, after exhibitors take their cut, a movie has to gross a little more than twice its budget just to break even. So if you spend $250 million and your worldwide gross is $550 million, you are still on the bubble.

China, which accounts for the most international growth of late, takes a whopping 75 cents of every box office dollar, and look at how much international revenue comes from a partner that eats up three-quarters of the pie. Yes, the international box office might be up a tick, but I doubt it’s ahead of inflation.

Anyway, that is just a summary of the lay of the land. Hollywood’s fundamental problems are much deeper and fall into three categories: product, ideas, and customer service.

A quality product, like a tasty burger, is the golden goose that keeps laying the golden egg. Great ideas, like iPads and iPhones, are the golden geese that keep laying those golden eggs. Great customer service — well, you get the idea. And Hollywood’s biggest problem right now, it’s most fundamental problem, is…


Outside of low-budget horror, today’s movie biz is only about insanely expensive franchises, which is fine, if you have enough of them. What happened this year and last, unlike any other years I’m aware of, is the death of a whole bunch of golden geese:

Straight up bombs include Alien, Transformers, Cars, Smurfs, Resident Evil, Underworld, Wimpy Kid, Xander Cage, Nut Job, Independence Day, Ice Age, Ninja Turtles, Divergent, Huntsman, Alice in Wonderland, Inferno (DaVinci Code), and Jack Reacher.

Underperformers include Pirates, Kong/Godzilla, Planet of the Apes, Star Trek, and X-Men.

Add to this an entire genre: the comedy, an area in which Hollywood painted itself into a corner primarily with raunchy titles aimed at teens. Casualties include Baywatch, Snatched, Fist Fight, Rough Night, Ghostbusters, The Boss, Why Him?, Neighbors, Barbershop, Dirty Grandpa, and Zoolander 2.

Dead golden geese. Pillars removed.

But this happens. Customers grow bored. Things wear out. And this is where ideas are supposed to come into play, because ideas breed more golden geese.




The longstanding joke that Hollywood is officially out of ideas is no longer funny. Here is a list of the new ideas, the potential new franchises, that died in the crib: The Mummy, The Emoji Movie, the poorly titled Captain Underpants: The First Epic Movie, The Dark Tower, Valerian, King Arthur.

I do not know of a single new franchise successfully launched this year, and last year there were only three to four: Deadpool, Suicide Squad, Doctor Strange, and Fantastic Beasts.

A handful of new franchises compared to somewhere around 20 lost and/or were severely wounded.

You do the math.

Customer Service:

The ideological conformity within Hollywood is not only destroying the greatness that comes from artistic tension, is not only shelving great stories, it is alienating and insulting half the customers.

Moreover, going to the movies today is not just an expensive risk when it comes to the quality of the product, but the theaters themselves are terrible at policing the talkers and texters who ruin the experience.

Going to the movies used to be a form of escape from the tyranny of everyday life. No more. Around 80% of movies disappoint, the rudeness of others aggravates, and the hyper-politicization of too much of the product and its pitchmen (the actors) drains your ability to remain spellbound.

Hollywood failed to listen to the canary in the coalmine that was the home video business. That pillar collapsed some ten years ago. Instead of looking inwards, instead of realizing that the quality of the product was such that no one wanted to experience it again at home, the studios blamed piracy, video games, and television.

Sorry, no.

The only problem is that your industry sucks and that it keeps getting suckier.


Follow John Nolte on Twitter @NolteNC.               Follow his Facebook Page here.


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