Nobody Knows Anything: Hollywood learns and then unlearns the same old lessons in deciding what films to make

In the movie business, do sequels thrive or do audiences want original stories? Or both? Or neither? Center director Jeffrey Cole explores the scope of Hollywood’s confusion when it comes to what works.

By Jeffrey Cole

While not thought of as a philosopher, Mike Tyson may eventually be considered one of the best alongside Yogi Berra (“It ain’t over ‘till it’s over” and “that restaurant is so popular no one goes there anymore”). Tyson’s great quote refers to boxing but fits equally well whether you are a startup, a successful incumbent business, or a movie studio trying to figure out what kinds of films to make: “Everybody’s got a plan until they get punched in the mouth.”

Every year, Hollywood has a perfect plan for what will succeed in getting audiences into the theater. Then it gets punched in the mouth.

The plan worked brilliantly in 2019 when nine films earned global revenues of $1 billion or more. The lesson of all those films was to build on familiar intellectual property (IP). Audiences would be comfortable with what they liked in the past and knew what to expect. At the top of the 2019 list was Avengers: End Game, which was the capstone of over 20 Marvel movies and continued a story from the film just before. Also hugely successful was Toy Story 4, the live remake of The Lion King, Frozen II, a live action Aladdin, Spider-Man: Far from Home, Star Wars: Episode IX and Jumanji: the Next Level.

The remaining two, Joker, featured a new actor and fresh take on the Batman villain who was well known from earlier films and comic books, as was Captain Marvel.

There were no original characters or concepts in the top 10 films of 2023.

Original IP Works or does it?

“Give the people more of what they have shown they like” was the clear lesson of successful box office, and then came COVID. It took a while to get back to significant original production. The two most successful films, before something resembling a normal summer resumed, furthered the lessons of 2019. These films, importantly, were made before COVID — Avatar: The Way of Water and Top Gun: Maverick — both sequels.

Building on what had been learned in 2019 and in the interim, 2023 was full of films that seemed guaranteed to succeed: The Flash, Indiana Jones V, Mission Impossible 6, a live action Little Mermaid, Aquaman II, Antman and the Wasp, and Fast X. All failed financially, most of them spectacularly so. There were a few exceptions with John Wick 4, Guardians of the Galaxy 3, and Spider-Man: Across the Spider-Verse. Even those that succeeded were so expensive their profitability was disappointing.

Film-making can and must be made less expensive. Special effects are the most expensive part of the budget (after huge stars) and often they detract. Their use should be carefully controlled. Filmmakers should always ask this question: do these effects really add to the story, or are they a substitute for poor writing or story development?

The real lesson of 2023 came from Barbie and Oppenheimer, which together with Super Mario Bros., formed the top three: audiences are tired of bloated sequels and remakes; they want original stories.

The Barbie and Oppenheimer lesson became the new plan. Its wisdom seemed to be confirmed at the beginning of summer 2024 when two, sure-fire hits (in production before Barbenheimer) tanked. The Fall Guy, based on a 1980s television series, starred two of the biggest stars in the world: Ryan Gosling from Barbie (who stole the show at the 2024 Oscars) and Emily Blunt from Oppenheimer. It was a good script, full of action and romance. Likewise, Furiosa: A Mad Max Saga was thought to be a highly anticipated sequel to the successful and well-reviewed Mad Max: Fury Road. Both failed, losing enormous amounts of money.

Their failure at the beginning of summer 2024 confirmed the Barbie lessons of 2023: audiences want new characters and stories. That was the lesson. It was affirmed and would become policy moving forward. Until it wasn’t.

Almost immediately, that lesson was completely reversed by the rest of the summer of 2024.

Revenge of the sequel

As of September 15, all ten of the top films of 2024 are sequels and remakes led by Inside Out 2 and Deadpool and Wolverine (which has become the most successful R-rated film of all time).

Also in the 2024 top 10 are, in order: Despicable Me 4, Dune II, Godzilla x Kong, Kung Fu Panda 4, Bad Boys: Rise or Die, Kingdom of the Planet of the Apes, Twisters and Aliens: Romulus.

Only when you get to number eleven, It Ends with Us, do you get an original title (based on a best-selling book).

What’s a studio to do?

They made a perfect plan after Barbie and Oppenheimer: fans wanted original stories. Then they got punched in the mouth with Fall Guy and Furiosa. Then the lesson switched back to 2019: what fans really want is sequels, re-makes, live action versions, and anything they have seen before.

In his classic memoir Adventures in the Screen Trade, the great screenwriter William Goldman (Butch Cassidy and the Sundance Kid, All the President’s Men) said of Hollywood (and indirectly referring to life): “Nobody knows anything.” The toils of trying to learn what an audience wants to get them buy a movie ticket proves his point.

There is one lesson that every filmmaker must learn. Unlike the ones above, it stands the test of time: very few films should get budgets of $200 million or more with an additional $125 million to market and advertise. Great stories can and should be told with much smaller budgets, which is not only possible but also often enhances the quality of films.

There’s a difference between money and value

The films of 2023 now considered significant financial flops (the issue of their quality or worth is left to the critic and the viewer) — The Flash, Indiana Jones, Mission Impossible, The Marvels and the live-action Little Mermaid — all did between $60-65 million on their opening weekends; these are impressive takes. In the past, that kind of box office would have been the road to great financial success. However, those films cost between $200 million and $450 million, and then another $125 million to market. They needed to earn between $400-700 million just to break even. That’s an almost impossible hurdle that few films reach.

Think of making a film knowing it must be one of the most successful films of the year, if not all time, just to break even. The costs frequently do not make a better film.

Let’s take The Flash. Other than cameos, the film has relatively new, inexpensive actors. CGI was a significant part of the over $200 million budget. Much of the criticism from fans argued that CGI was used too aggressively and ruined the film.  The same argument was used against the The Little Mermaid.

It’s hard to argue with handing over $200 million to James Cameron. After Titanic, Avatar, Terminator and much more, he has earned those budgets. But $200 million for a tired sequel to Indiana Jones or a live-action remake of The Little Mermaid? Disney seems incapable of making anything but huge-budget, expensively marketed films. Their defense after well over $1.5 billion of failures is Deadpool and Inside Out 2.

However, it’s illuminating to look at the films Disney inherited from its purchase of Fox that had a different strategy. Fox had a history of taking mid-budget films, such as The Greatest Showman or Bohemian Rhapsody, and marketing them aggressively into hits. Even under Disney, what is now called Twentieth Century Studios (the old Fox) made hits with Planet of the Apes, Poor Things, and Alien: Romulus.

Another 2023 lesson came from the most successful film of the year based on a multiple of return: Sound of Freedom. Made on a budget of about $12 million with a marketing campaign that was crowd-sourced, it returned $250 million. Angel Studios didn’t need a massive budget: it learned how to mobilize an audience to come to the theater.

Other than another Avatar or the next Deadpool, the traditional studios should shy away from massively budgeted films. Apple seems interested in taking over that space. In the last year, it invested close to a billion dollars in Killers of the Flower Moon, Napoleon, and Argyle. All failed and lost enormous amounts of money. But this is not a significant problem for a company worth over $3 trillion. Apple’s movie losses don’t even show up on the ledger.

Audiences want new characters and stories. That was the lesson. It was affirmed and would become policy moving forward. Until it wasn’t.  Almost immediately, that lesson was completely reversed by the rest of the summer of 2024.

Not every film can be made for $12 million. Some can. Most can be made for under $100 million. That means a financial hit to the biggest movie stars, but does anyone believe that as the market changes they would refuse to work for $10 million and a share of the gross?

Film-making can and must be made less expensive. Special effects are the most expensive part of the budget (after huge stars) and often they detract. Their use should be carefully controlled. Filmmakers should always ask this question: do these effects really add to the story, or are they a substitute for poor writing or story development?

Furiosa: A Mad Max Saga was a financial disappointment, but about 40% of its $168 million budget was covered by Australian subsidies. Australia is particularly friendly to filmmakers with lots of below the line talent available as well as every variety of scenery (it is a continent!). And there are other countries, as well as many U.S. states, that subsidize movie making. It’s a clean industry, and everyone likes a film production in town.

We will see successful $250 million films with expensive stars and lots of effects based on past films or well-known stories. But they will be surrounded by three times as many films with the same budgets that fail. How long can that scenario continue except for Apple and Amazon?

The lesson that will make sense in 2025, 2026, and beyond is that films need to be less expensive, have fewer distracting effects, and tell a good story. Leave the huge budgets to Cameron and Christopher Nolan. Even Steven Spielberg doesn’t ask for those budgets anymore (although he could get them).  He has learned how to make less expensive, equally good films with great characters.

Maybe Goldman is wrong, and we do know some things!
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Jeffrey Cole is the founder and director of The Center for the Digital Future at USC Annenberg.

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September 18, 2024