Today: Why are studios releasing so few original new films? Andrew deWaard on how movie franchises have conquered Hollywood.

+ Why did the U.S. and China settle their trade war so fast? What we’re tracking for this week’s member’s despatch. & New music from Daphni …

In theaters now

Since the 1970s, franchises have steadily grown in their share of the box office, at the expense of original works. At first glance, it’s not entirely obvious why Hollywood studios keep expanding their franchises with new films, despite many having had underwhelming ticket sales or been poorly received: The fifth installment of the Indiana Jones saga lost Disney nearly $100 million—also roughly what Paramount Pictures lost on the seventh Mission: Impossible film. This fall, Warner Bros Pictures’ second Joker movie, having cost up to $200 million, earned less than $38 million in its opening U.S. weekend. So why do franchises keep dominating Hollywood?

Andrew deWaard is an assistant professor of media and popular culture at the University of California San Diego and the author of the open-access book Derivative Media: How Wall Street Devours Culture. DeWaard says understanding the rise of film franchises means following the money—specifically, understanding the transformation of studio ownership, how that transformation has bent the industry toward a focus on short-term profits, and why that focus has favored sequels and prequels. For a while, streaming offered filmmakers well-funded opportunities to create original series, but now that too has been taken by the same logic—leaving not just less and less space for creativity in Hollywood, but more and more uncertainty about its long-term sustainability …

• “As recently as 1988, original stories accounted for more than 40 percent of theatrical U.S. box-office sales. That share fell to just 6 percent by 2019. Meanwhile, franchises—which used to have about a quarter of the market through the ’90s—now have nearly three quarters of the market—when you include other kinds of adaptations, they account for all but 6 percent. If we look at just the top 20 highest-grossing movies in the ’80s and ’90s, about 25 percent were prequels, sequels, spin-offs, remakes, reboots, or otherwise parts of franchises. Since 2010, it’s been over 50 percent every year. It’s actually reached 90 percent more recently.”
• “People often ask me why these entertainment companies behave in ways that might seem to hurt them in the long term. But it’s sort of like that line from When a Stranger Calls: “It’s coming from inside the house.” Industry CEOs and CFOs today aren’t as interested in the long-term health of their companies as you might imagine. There’s been runaway executive compensation: They’re making tens or even hundreds of millions of dollars every year; mergers, acquisitions, diverting profits to venture capital, cooperating with hedge funds, selling to private equity—it’s all very lucrative for the players involved.”
• “It seems shortsighted to have eliminated the well-oiled practice of windowing movies: starting by making money on a theatrical release, then putting the movie on pay television, and then eventually showing it on broadcast TV. Now, movies and TV series often go straight to streaming, which appears to limit long-term profits. But it would seem Netflix isn’t concerned with trying to maximize the long-term profits a movie could make—let alone cultivate interest in film as an art form—so much as it’s trying to position itself as a monopoly.”

Except on China.

What began as a round of universal tariffs turned into an exceptional new trade war with Beijing. Each side raised rates multiple times, with the U.S. eventually putting a 145 percent tariff on Chinese imports and China imposing import duties of 125 percent on American goods.

But a month later, in Geneva, each side agreed to reduce tariff levels by more than 100 percentage points. Soon after, though, the U.S. enacted a new array of tough trade restrictions on China, mostly on high-tech items. Yet by June, Washington had canceled those policies. At the end of the month, Trump declared the trade war was over and the two countries had made a deal.

Neither side has released details of the agreement, but it looks like China didn’t have to make any concessions or change anything in the way it had traded with the U.S. before the tariff fight.

Why not?

• Flooding along the Guadalupe River in Texas this past weekend has killed now more than 100 people, including 28 children. It’s the deadliest flood in the state since the Central Texas flood of 1921.
• The Russian government says Transportation Minister Roman Starovoit killed himself on Monday, hours after he was fired by President Vladimir Putin.
• Russian forces meanwhile fired more than 100 drones at civilian areas in Ukraine, killing 11 and injuring over 80, as Moscow increases its aerial attacks and its troops push their offensive in Eastern Ukraine.
• Executions in Saudi Arabia hit a record high last year, with 345 people put to death, mostly for drug-related offenses.
• Scientists in Hong Kong found that people who feel anxiety about Mondays—even retirees—show elevated cortisol levels even two weeks later.

See you Thursday …

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