Globalization is also having a similar affect. China, for example, used be a tertiary market for Hollywood films. Now it’s a major market. Low-budget comedies with distinctly American sensibilities don’t translate well in places like China. What does translate well? Robots, wizards, and super-heroes.

Hollywood economics

Over the course of the last decade, the number of films produced by the studio system has been steadily decreasing, while the average budget of each film has been increasing. To the gamblers out there, this might seem counterintuitive. Wouldn’t 10 movies produced at $30 million each have a better chance at succeeding than two movies costing $150 million each? Yes, but only if your idea of “success” is very modest.

When a mid-budget drama hits, it can yield a decent profit and some awards. When a $100 million movie hits, it can yield a billion dollars of profit, a theme park ride, and fives more films in the series. Hollywood is no longer in the business of hitting singles. They now swing for the fences almost every time they step to the plate, even if that means also getting the occasional, big-time strike out (see John Carter).