There's a good reason that Hollywood is obsessed with sequels. So are you.

Movie-making has always been a risky business of hits and flops. But the globalization of profits makes the hits even more precious. It's no surprise (or secret) that Hollywood has responded to the pressures of creating lucrative decade-lasting franchises by turning their budget over to sequels, reboots, and adaptations to lift their annual earnings. Just look at the 25 top films in the U.S. and Canada last year. I've highlighted the ones I consider to obviously be sequels, prequels, or adaptations of already-popular products and stories*. Also consider that almost half were in 3D.



A dollar spent on a blockbuster goes further.

In The Hollywood Economist, Edward Jay Epstein revealed that the American box office accounted for less than 10 percent of the MPAA's total income (and international box office accounted for just a little more than 10 percent). "The other 80 percent now came from the ubiquitous couch potato who was viewing his movies at home via DVDs, Blu-rays, pay-per-view, a digital recorder, cable channels, or even network television," he wrote.

What does that mean for summer movies? It explains why $1 spent on a blockbuster is (all things considered) worth more than $1 spent on a non-blockbuster. The potential for each mega-budget movie to go big and create a train of merchandise, licensing and sequels makes it strategically wise to bet a very large sum of money on a very small number of big films.



Fewer typical moviegoers means fewer chances to get your money.

Another data point that strengthens the case for studios to sink hundreds of millions into just a few films a year is that, increasingly, Americans are only going to a few films a year. In the 1940s, nearly 80 percent of households went to the movies each week. Today, scarcely 5 percent do. Studios have to build a new audience each weekend for their releases with ad campaigns that can cost as much as $100 million. You can't do that more than a handful of times a year.



Films are for kids.

Finally, if you're wondering why the biggest movies are so childish, just remember that the population of moviegoers is more childish than you'd think. Moviegoers as a percentage of population by age peaks in the teens and declines considerably after that.



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*"Prometheus", a sort-of-"Aliens"-prequel, and "Hotel Transylvania" are on the cusp.









