The Movie Sequels Business

How a Series Can Live on Beyond its Critical High

Movie series, on average, peak with the first film, both in critical reviews and at the American box office. So says a recent study from NerdWallet, which looked at every major film series since 1964 to calculate their average diminishing returns.

In their analysis, NerdWallet averaged reviews and box-office data for 130 series, which included 475 total films, including Pirates of the Caribbean, Alien and Iron Man – you can find a full list on their website. Critical reviews were collected from Rotten Tomatoes and box office revenue figures from Box Office Mojo. Box office revenue was adjusted for inflation, so the success of older films like Jaws wasn’t discounted next to newer box-office winners like Twilight.

If the average series earns less and less from one sequel to the next, then why do we keep on getting them?

For most movie producers, this U.S. box office problem is no matter. A sequel may not outperform its predecessor, but a sequel still often does exceedingly well compared to its contemporaries. The Dark Knight Rises, for example, earned $100 million less than the Dark Knight, but it was still the second-highest earner in the U.S. and Canada in 2012.

Gains outside the U.S. can more than make up for any losses, too. Pirates of the Caribbean, for example, may have earned less and less after the second film in the U.S., but, in international markets, each sequel has improved upon the last film.

Pirates of the Caribbean - Box Office Revenue (adjusted for inflation)

	International	Domestic
The Curse of the Black Pearl	$441,320,020	$413,295,000
Dead Man's Chest	$742,268,659	$527,367,500
At World's End	$734,214,689	$366,987,000
On Stranger Tides	$830,759,292	$244,208,500

Pirates of the Caribbean: The Curse of the Black Pearl (soundtrack) (Photo credit: Wikipedia)

The international market is still a moneymaker, and it’s growing at five times the rate of its American counterpart. Clearly, then, there’s plenty of room for the sequel business to grow, even as the American audience turns its back.

In any case, even if a sequel busts, movie producers can still turn a profit. All they have to do is ground their expectations – and therefore slash the budget of the next film in half.

Let’s look at Jaws for example. It may be the most famous film of all time, and its U.S.  Box office revenue – adjusted to 2013 dollars – is the seventh-highest of any movie ever.

As you’d expect, when its producers saw this success way back in 1975, they were elated. And so they set out to work on another, Jaws 2, with a budget nearly three times that of the original.

When it arrived in 1878, the critics fumed and the audience wasn’t quite there; the critics gave it a 53% – quite a severe drop after the original earned a perfect rating of 100%. Again, though, the decline of the Jaws series is all relative.

Jaws 2, compared to the other films of 1978, was still a smash; it was the fourth top-grossing film in the States that year.

And so, along came Jaws 3-D five years later. The biggest difference, aside from even more dismalreviews: the budget plummeted from Jaws 2’s astronomical $107 million, to $42 million – less than half than half of its predecessor and just slightly more than the original.

A sequel may not have the same firepower as the original, but movie producers continue to make significant profits. All they have to do is adjust their production budgets with prudence.

About the Author 

Author - Mike Anderson

Mike Anderson is an analyst for NerdWallet, a personal finance company dedicated to helping the individual consumer make informed decisions with their wallet. 

By day, he helps readers save money. By night, he enjoys reading the Great American Novel, going to concerts in his new home of San Francisco and biking around Golden Gate Park.

 

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