I’ve been on something of a comedy-watching kick lately. In the past few days, I’ve re-watched Men at Work (1990), The Air Up There (1994), and, as I type this, Nothing To Lose (1997).
Because I’ve reached a certain age, I started wondering in my old-man brain, “Why don’t they make movies like this anymore?” Weirdly, that’s an answer that can be tracked pretty well.
The VCR Changes Everything
For those of you who don’t remember the 1980s, let me give you a bit of a primer here. You had a handful of channels. Shows came on at certain times. If you missed them, you had to wait for a rerun in the summer. Movies were shown sometimes late at night, but otherwise, if you wanted to see a movie, you went to the movie theater.
Then, the Video Cassette Recorder (VCR) came along. All of a sudden, you could watch movies at home, on your own schedule.
It’s pretty stunning how quickly VCRs became ubiquitous. In 1984, around 20% of US households had one. By 1989? Over 65%. By 1995, 87% of homes in the United States had a machine.
Of course, just having a VCR doesn’t get you movies. The tapes were pretty expensive to buy early on, and that gave rise to video rental stores like Blockbuster. In 1988, that nascent industry was already worth $9 billion. By the turn of the century, it more than doubled that.
Cable television was on the rise during this time too, and the biggest paid add-ons to cable TV in those years were pay channels like HBO and Showtime, which showed pretty much just movies. The brilliance here was that these films aired with no commercials and weren’t subject to the language and physical censorship of the broadcast networks.
The Need for Content
All of a sudden, studio executives were looking at an explosive demand for films. Video stores needed to line their shelves. Cable TV channels needed to fill their empty slots.
So what do film studios do? They ramped up production.
Theater owners figured out that putting more screens under one roof created economies of scale. By 1999, there were around 37,100 movie screens in the US, up from 23,100 just 11 years before.
Here’s the interesting note, though: While the industry produced 58% more movies during that span, the number of films released into movie theaters actually went down by 9.6%.
The New Economics
What theaters couldn’t have anticipated was that studios were developing an entirely separate distribution system that didn’t require a movie theater at all.
In 1997, Nothing to Lose cost $25 million to make. In order to put that out on 1,500-1,800 screens, which would indicate a serious release strategy, the studio might drop another $3 million for physical prints and around $20 million in marketing. So assume double the cost.
Nothing to Lose got the release. July 18, 1997, on 1,862 screens. It pulled in $44.5 million domestically and another $20 million internationally. But the studio didn’t get all of that money — theaters took their cut. So it’s entirely possible Nothing to Lose was still in the red when it left theaters.
But in 1997, leaving theaters wasn’t the end of a movie’s economic life. In some ways, it was just the beginning. That was the thing about this new set of economics. After theaters came pay-per-view, video rental, VHS sales, premium cable channels like HBO and Showtime, broadcast and basic cable rights, and eventually DVD and the film’s long-term value as part of the studio library.
That allowed one film to have like a half-dozen shots at making money.
And then this: In 1997, the stars of Nothing to Lose were Tim Robbins and Martin Lawrence. They were very close to A-listers in that era. Tim Robbins’ star was on the rise after The Shawshank Redemption and directing Dead Man Walking. Martin Lawrence had a hugely successful TV series and successfully transitioned to films with Bad Boys in 1995.
Now, put those two guys on the cover of a video rental, with a quote like, “Funniest Comedy of the Year.”
Makes for a pretty compelling argument to drop $3 on a weekend rental.
So What Happened?
We’ve gone a long way to be back at my original point: What happened to these movies? Don’t see a lot of these broad comedies with high-level stars anymore.
The short answer is: Streaming. But maybe not in the way you think.
The first thing that happened with streaming is studios got so excited about the new potential revenue stream that they inadvertently damaged all their other ones. Instead of mid-budget films getting all those separate bites at the apple, studios began collapsing many of those windows into one: streaming. The subscription model of paying $20 a month or whatever for unlimited access to a library of films helped disincentivize people from buying and renting films. That model works great for attracting subscribers. The problem comes when you’ve already attracted most of the people who are going to subscribe.
Then COVID devastated theatrical attendance, while the 2023 Hollywood strikes later disrupted an industry that was still trying to rebuild its release pipeline. A movie like Nothing to Lose once had five or six different chances to turn someone’s interest into money. On streaming, millions of people can watch it without generating another dime of direct consumer spending.
Suddenly, the risk of making films shoots through the roof.
Nothing to Lose had built-in marketing because Tim Robbins and Martin Lawrence were big stars, each of whom had their own audiences. Some of whom would go to the theater. Some would buy it on pay-per-view, on TV, etc etc.
But now, with streaming as king, there are fewer ways to turn that audience’s attention into revenue. Suddenly, stars aren’t enough.
Enter… IP
Ever ask yourself why Hollywood doesn’t have any new ideas anymore? Why do movies all seem to be sequels, franchises, based on… whatever?
Well, cause, they’re not. There are a considerable number of original films that come out every year.
But if it seems like that’s the case, it’s because the big dollars go to the films based on intellectual property. The sequels. The superhero films. Because those films have built-in marketing, audiences ready to come to the theater, keep their streaming subscriptions, etc… all just to watch those movies.
It’s basically this: The richer films are getting richer, and that’s taking money away from everywhere else. Including a film like Nothing to Lose. While that was made for $25 million in 1997 with two near-A-listers, today it would be made for considerably less (without even accounting for inflation) with up-and-coming actors instead of a big-time Oscar nominee and the lead of a top series.
Then, on top of it, the film gets a smaller marketing budget, and there’s a big chance it never sees the inside of a movie theater. Then it lands on streaming amidst thousands of other films.
Risk vs Reward
There was an old saying. I don’t know if it’s right, but it feels right. Once upon a time, studios lost money on 19 out of 20 movies, but made it all back and then some on No. 20. That model worked for decades. The point wasn’t that every movie needed to make money. The slate needed to make money.
Now… not so much.
But stay tuned. It feels like in the last couple of years that Hollywood is starting to get its legs back under it. I’ve seen some pretty solid mid-budget films with top-level talent this year, including The Invite, which I personally would put on the short list for Best Picture come January 2027.
I’ll have more to say on streaming over the coming months. For the record: I love it. It’s just Hollywood still has to work out the kinks in how it’s going to make money.
