Box Office Math: How Record Tickets Sales Results in a Summer of Loser Movies

The headlines surrounding this summer's movie ticket sales seem, at a glance, contradictory. The most prominent stories have been those about the failure of the majority of this year's big-budget films to perform up to expectations. But, on the other hand, we're hearing that movie-goers have been flocking to the theater in record numbers and that this summer is set to be one of the most, if not the most, lucrative summers for Hollywood in history. How can both be true?

The answer is obvious with the help of just a little math and some basic economics. First of all, this summer was overburdened with big-budget movies, and a disproportion amount of production-budget money was concentrated in relatively few films. This year, there were nearly two dozen movies with production budgets over $100 million, a level that used to be attained by very few films. In order for all those films to be financially successful, a lot of people needed to buy a lot of tickets.

And they did. So far this summer, fifteen films have achieved a domestic gross of over $100 million, and six of them have brought in over $200 million. Altogether, that's several billion dollars in ticket sales. As a whole, the movie industry has raked in a record amount of cash over the summer.

The problem is in how that cash has been divided up. For one thing, at least a third of those movies that made more than $100 million were not the ones with $100-million-plus budgets. They were relatively low-budget movies like "The Conjuring," "The Heat" and "Grown Ups 2." And many of the movies with big budgets—"The Lone Ranger," "Pacific Rim," "R.I.P.D.," "After Earth," "White House Down," "The Smurfs 2"—didn't make it into the $100-million club.

Put those two facts together, and you get a bunch of films that are surprising successes and a bunch that are big disasters. Overall, the math works out to a record number of tickets sold, but the performance of individual films varies widely—and sometimes catastrophically.

The lesson for studios is that the supply of ticket buyers for mega-budget action movies isn't limitless. Audiences aren't going to pay to see big-budget movies just because they're there, and there might only be room for one "Iron Man 3" per summer. When a multitude of big-budget movies—especially ones that are as unappealing to audiences as "The Lone Ranger" and "R.I.P.D."—compete against each other, everyone loses. Except, of course, the studios that make movies like "The Conjuring."