Hollywood Is Giving Up on Comedy

By John McDuling

The Hollywood comedy is in decline. And there is a totally unfunny reason why.


Comedy Films as a Percentage of Total Releases, 2010-2014

(Source: Boxofficemojo.com, Nomura research)

As the above chart from Nomura shows, the output of comedies as a proportion of total releases at the biggest Hollywood studios is in structural decline. Blame it on (or thank, if you prefer) the globalization of box office returns.

While fewer Americans are going to the movies, it is a totally different story in many other parts of the world, where cinema is booming. Non-U.S. moviegoers accounted for about 70% of global box office receipts last year (which hit $35.9 billion) compared to about 63% in 2007. Emerging economies are responsible for most of that growth, and there is plenty of room for more, because there are significantly fewer cinema screens per capita and lower ticket prices in these countries than in the U.S.

But the emerging world enthusiasm for Hollywood films does not extend to comedies, or at least not relative to its love of action movies and animated films. In China, for example, U.S. comedies account for only 10% of box office spending, compared to 25% in the U.S., Nomura says. By contrast, Hollywood action films are 44% of the box office in China (the latest Transformers release has broken just about every box office record in the country) as against 36% in the U.S.

Comedy is the least profitable genre for the studios.


Average Total Profit Per Film, 2004-2013 

Animated films generate the highest profit on average.                   (Source: SNL Kagan, Nomura research)

 

Average Gross Profit Margin per Film, 2004-2013

Animated films generate the highest gross margins.                           (Source: SNL Kagan, Noura research)

And the ruthless profit machine that is Hollywood is responding. Fox in particular has scaled back its comedy output significantly (from 44% of releases in 2010, to just 8% this year). Disney is not releasing any comedies this year, according to Nomura’s analysis.

The decline of the comedy is a trend that has been under way for a while now. Hollywood’s reluctance to make comedies is also explained by declining DVD sales, itself caused by growth in streaming services like Netflix (which are commissioning their own original content, including comedy television).

Still, over the years, comedy figures (like Jerry Lewis, weirdly popular in France) have occasionally been a useful “soft power” foreign policy tool for the U.S. At another time of geopolitical uncertainty, if the world doesn’t think America is funny anymore, could it actually be a problem?

This article available online at:

http://www.theatlantic.com/entertainment/archive/2014/07/hollywood-is-giving-up-on-comedy/373914/