The 6 Graphs You Need to See to Understand the Economics of Awful Blockbuster Movies - Derek Thompson - The Atlantic: 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.
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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.