Why Hollywood Still Bets Big on $125 Million Box Office Flops Despite Audience Demand for Origin

Why Hollywood Still Bets Big on $125 Million Box Office Flops Despite Audience Demand for Origin

Hollywood continues to produce big-budget flops, often costing around $125 million, even as audiences show a growing appetite for original stories. The video examines this paradox, using examples like Moana and Obsession to question why studios keep investing in remakes and sequels that fail to resonate.

Why Hollywood Keeps Making $125M Flops. | Transcript:

So, the other day I asked my team what I thought was a simple question, like what's the best movie you've seen recently. A graphic novel, a sequel, another sequel, a horror movie, and a feature film, "Moana." OK. Well, anyway, every one of them is remade except for one, " Obsession." There is one original story. I know, like, who doesn't love a franchise movie and a little fanservice on a rainy Sunday? But isn't the obsession proof that people want fresh ideas for movies? Well, no offense to Charlie, who liked the live-action film "Moana," but everyone else on this planet seemed to hate it.

This is true. I have beautiful hair. So why does Hollywood continue to spend billions of dollars on this recycled crunchy stuff if everyone hates it? And if they keep losing money, why can't Hollywood just create new things? Has Hollywood lost its Fast 10, but it's actually 11. I've spent the last few weeks researching the numbers behind these big blockbusters, hundreds of movies over the past few decades. For the sake of argument, I've also watched every Fast and Furious movie. There is always room for family. And I think I found the answer, hidden deep in the papers. So let's get to the math behind Hollywood. OK. So, my team wouldn't let me finish this video and run this script unless I actually watched every Fast and Furious movie that I've seen, which is,

I've watched a few, but I don't even know which one. So, this is a Fast and Furious marathon. Greetings to friends. Okay, first I'd like to see what the numbers are, how it actually breaks down. How many original films do we actually get compared to remakes? So I classified each film into two broad categories. Brand new intellectual property, which are truly original ideas, and existing intellectual property. This is for everything else. These are remakes, reboots, sequels, adaptations of books, toys, games or TV shows. So for simplicity's sake, in this video I'll just call them remakes.

You can drink any beer, as long as it's Corona. And then I looked at the highest-grossing films from 1990 to 2025. That's 360 films in total. Only 76 of them were truly brand new IPs. Everything else is some kind of remake. Now let's take a moment to look at this little graphic, because that's the point of the video. These are the 10 highest-grossing films of each year. For example, in the 90s, 37% of these films were completely new IP. Are you talking about " Ghost," "Home Alone," or "Beauty." The three most popular films of the decade. These are not sequels. They are not based on a game.

They are not based on a book. There's just some writer, and it's an old typewriter or something. But look what happens in the 2000s. 27 %. In the 2010s, only 9%. And now we are going to 5% by 2025. This bar is shrinking faster than the plot logic of the movie "Fast and Furious." But there's something really strange about these numbers, because too many of these movies, the highest grossing movies, people didn't really like, and yet they still do amazingly well at the box office. For example, this one. This is the first sequel. Its budget was $75 million. It grossed about $235 million at the box office. Oh [__], he really made that leap. A few more examples. " Transformers: Age of Extinction," panned by critics, was not particularly beloved

by audiences. Number one at the global box office in 2014, over $1 billion. More revenue than the last Hobbit film, and even the Guardians of the Galaxy remix. The same goes for these movies that have reached the top. "Pirates of the Caribbean: Dead Man's Chest", " Transformers: Dark of the Moon", " Pirates of the Caribbean on Stranger Things" or " Transformers: Revenge of the Fallen". Really, how many of them do we need? But more importantly, look at the brand new bar of intellectual property and how it is shrinking every decade. In 1990, it was 40%. In the 2020s, this figure fell to just 12%. So, has Hollywood run out of ideas, or is everyone really excited about Fast & Furious 12?

Don't turn your family away. It turns out that it's not both. It's not that we don't have other options. There are a lot of movies made every year, great stories that just don't reach enough people. So lack of ideas is not the reason. Also, people may be tired of Dominic Terretto. This is Brazil. People weren't begging to see The Rock as Maui in a feature film. Well done, me. The real answer to this question comes much earlier in the process, before marketing, before box office, before any of it is filmed. This is inherent in how the film is made in general. Because, in short, a film is born in two ways. I call them " script first, production later." All of our videos on Stbein are very heavily script-oriented, except for this new short series we

started this month, which is more like a " comments first" series, because people ask what movie they want us to review. And we keep up with these requests and comments thanks to Victor. Because when we started the series, our community manager had to go through all these comments and find the disc we needed. And this used to take two or three hours a day. And then Victor works as an AI employee right inside Slack and reads every comment on our published shorts to figure out what film people want us to test next. Then Victor goes looking for a Blu-ray, hopefully at a discount, digs up a few weird facts about the release, sends me a short description, and then I can sit down and watch the movie myself. So what I like most is that I have

n't even opened my laptop yet, and it's already there. And it saves me over 2 hours a day that I spend watching pretty cool movies. Victor is an AI employee who works directly in Slack. It connects to over 3,200 tools right out of the box and doesn't just answer questions about them. He actually does the work. For example, if two vendors sell the same drive or the research seems inaccurate, the decision is still mine. He simply offers me options that I choose. It works on the model I choose, which is the best one that month, and

continues to work long after I log out. So, if you want to hire Victor for your team, you can use my link in the description and the code SBIN 100 or use this QR code here. You'll get $100 off his work for free, no credit card required, and it starts working in minutes. So thank you Victor for sponsoring this section of the video. Now let's move on to the Hollywood "script first" approach. Script-first films start with one person, the screenwriter, sometimes the screenwriter- director, and that person is not a collaborator.

Nobody hires them. They are just people who had an idea. They sat down to write it on their own, sometimes for years, iteration after iteration, edit after edit. It's a long process that could very well result in a script that stays on the shelf and no one ever picks it up. By the way, most people think of a movie script as the words spoken by the characters, but scripts have character descriptions, set descriptions, editing, narration. A script is actually a film without visual elements , something like a plan. And every line is an instruction for someone: for the actors, for the director, for the film crew, for the locations, for the editor. When the script is finished, the screenwriter goes and looks for a producer. The entire

job of producers is to serve the vision of the script. It's like co-founding a startup. No one hires anyone else. So the producers' job is to find financing for this film while protecting the vision of the story. Together they will go and pitch the film to studios, financiers, sales agents, and get a director, sometimes a lead actor, and a real budget until someone says yes. Now, contrary to what many people think, the director is hired by the producer, not the other way around. You bought my movie Again, hundreds of movies get stuck in this process. They never take off. But if the story is good and someone buys it, the producer becomes something like the CEO of that project. But still, this whole project is a

writer's world. The producer lives in it. And that's why the awards for best film go to producers, not directors. Although some directors do both, which tells you who is really in charge here, which is, of course, the producer, not the director. Maybe next year the government will introduce some immigration rules for the academy. Two Mexicans in.That's suspicious, I think. Um but anyway, let's look at a real-world example. So, "Obsession" was written by Curry Barker, who also edited and directed it. Curry Barker was a sketch comedian on YouTube. He directed a 2023 horror short film called "The Chair." He just posted it on YouTube and it got 10 million views. Producer James Harris saw this.

He got in touch through his manager and wanted to turn The Chair into a feature film. But Curry offered him something different. A wish that comes true in the worst way. I wish Nikki Freeman loved me more than anyone in the world. So producer Harris gave some money to write the script for this movie. It all started with a joke. Curry was watching a rerun of The Simpsons on Halloween, and here's this episode about a wish gone horribly wrong. So the next morning he told his creative partner Cooper Tomlinson about it, and a year and a half later the script was ready.

Along the way, a company came along that apparently offered them $2 million if he was willing to rewrite the main character into a more traditional hero. But Curry refused. See what I mean when I talk about the world of a writer? A screenwriter's vision is so revered and protected that even when someone waves $2 million, they don't change it. As if he would say "no." But this is certainly not a two-person team. And this can be understood by all the logos that appear before the film. Let's go. Film. Well, that seems intentionally misleading. So, Obsession was financed by Capstone Pictures with a budget of $750,000. Filming lasted 20 days. This was back in 2024. And

then Curry himself spent months editing. Now, before the film can be shown anywhere, it needs a distributor. Distributors are like intermediaries between the people who make the film and the theaters or platforms that show the film. They buy or license the rights. They are promoting the film. They choose when it comes out, and they deliver it to theaters, streaming platforms, television networks, and stores. Now the first stage of distribution is the most important. This is a movie theater rental. For a distributor, this means working with local cinemas, finding an international distribution partner if they don't have that reach, and ensuring that people come to the cinemas. In the industry, this part of the process, these costs

are called PNAs, and they will soon become really important. Distributors are usually found through film festivals. Most of the films shown at these film festivals are films that have been financed, that have been shot, but they are looking for someone to present them to the audience. This is why the films you see at festivals don't hit theaters for months, and sometimes don't hit theaters at all. They also have fewer logos before the movie starts. So, at the 2025 Toronto International Film Festival, Focus Features saw the film " Obsession," they believed in it, and they took a chance. They bought the rights to sell in the US for $14-15 million. And again, this is a finished film. They are simply distributing the film. This means they set a release date. They

deliver the film to theaters. They handle marketing, award campaigns, and cover the costs of its delivery. And it's all part of the distribution. This explains why you see all those logos at the beginning of the movie. Here's Focus Features, the distributor. Next comes Tisha Productions, a company that is responsible for the day-to-day operations. There 's also Bloomhouse, the production company that's acting as a marketing partner, and Capstone Pictures, the company that actually financed the production. When it comes to payments, a distribution agreement usually consists of two parts. First, the distributor pays the production company a fixed price for the film rights. If the film is successful and makes money in theaters, they

share those box office receipts. So producers are usually the last to get paid. Cinemas take 40 to 50%, and then the distributor gets about 35%. This is where marketing costs are reimbursed on a favorable day. Whatever is left over goes to the people who made the film. For example, in the film "Obsession," Focus paid $15 million upfront for the film rights. The cost of creating " Obsession" was $750,000, and it has now raised about $500 million. So Capstone, the company that funded all of this, got its share of the profits. In total, Capstone could have earned around $45-50 million. That is, it is more than three times more than the original agreement, which, by the way, is quite fair if you

ask me. People tend to hate " Hollywood Exclusive". But this is money that funds the next creative original film. But in any case, Karrie Barker, the person who wrote the script, directed and edited the film, probably still made less than the marketing company. We don't know exactly how much. We only know that it was less than $17 million. There was a whole argument with art director Sally Choi because she helped build the world on screen. She worked a lot with the sound system, sets, and graphic design. She traveled around, buying materials herself. She earned about $300 a day after taxes, which is about $6,700 on this film. If you want to know my opinion, she went on an entire internet tirade about it. I mean, it's a deal she accepted, and that's it

. Complaints about it now, I think, have just put off anyone who might hire her in the future. On the other hand, Indy Naret, according to her, made ends meet with $20,000 through Twitch broadcasts and dog walking. Hollywood is now obsessed with her Indian. But in any case, as you can see, it's a difficult process. Developing, financing, and creating a film with virtually no budget. More than half of the films that make it to the Sundance Film Festival arrive without a distributor, and not all of them find one, which means some will never get a true theatrical or streaming release. Their original stories are created with a passion to tell that story, not for reward. And yet there are films like Napoleon Dynamite, a 2004 Sundance hit that became huge, or

Paranormal Activity, which was also made without a distributor but ultimately became the most profitable film ever made, by return on investment. But that also explains it. Just looking at the chances of finding a distributor makes the film a pretty risky undertaking. So, is there a less risky way to make movies? Okay, let's talk about a different way of making films, a different path, a " production first" path. In this scenario, the word of the film's owner, the franchise studio, is above all else. Screenwriters, bless their souls, are hired to serve a larger structure that already exists. I'm on my seventh, because, you know, I live my life a quarter mile at a time.

But it's a car with a parachute, and I hope whatever screenwriter they wrote it with, I hope they're okay with it. In such cases, the film usually starts with an executive producer. Their job is not to serve the writer, but to serve the studio's desires, which usually means they're kind of spoiling the creative party. So, the producer is hired early in the process, just like before, but they are there only to turn that assignment into a script. So in these cases, the producer hires a screenwriter. This screenwriter will not own what he writes. The studio will own it, which means they can be replaced at any point in the process, and that's often the case.

The studio hires anyone, be it a director or a producer, and they can fire anyone whenever they want because none of them own what they were hired to do. The studio is the owner. And their perfect example of this corporate creativity is the live-action film "Moana," announced by Disney in 2023. There was no script. There wasn't even a screenwriter. Everything else was decided. They had intellectual property. Of course, they had Dwayne Johnson returning to play Maui. Then Jared Bush and Dana Leo. They got a call to write a script for a movie that the studio, I mean, had drawn in their heads. A completely different scenario than " Obsession," right? For example, here, the money and the cast existed first, and someone

was hired to simply fill in the gaps. And we also need a distribution warehouse for these kinds of films, except there's Sundance premiere this time. Disney owns "Moana." Disney is also releasing "Moana. " It's the same company that does both jobs. There was never a moment when anyone asked themselves, " Will anyone buy this movie?" because there was no one else who could buy it. This passion of a screenwriter, this presentation process, this life of a producer in a writer's world - none of that is here. And that's why so many of these live-action remakes are often heartless films. They don't fit into the story.

They simply activate the money machine. Literally, in some cases, like Spider-Man, for example, there is a contractual obligation to release a new film every 5 years and 9 months. If they do not start production within this designated window, they lose the right. That's why we have Spider-Man every few weeks. While this rule allowed us to get through the Spider-Verse, which is an exception to this whole problem, let's move on. Now this production process is what gives us this invasion of recycled stories. The last time an original film topped the box office was Avatar 16 years ago. There were no original films on the list of the highest-grossing films of. And it sometimes gets

a little absurd. Okay, they made a heat shield out of their cars for protection, and it worked. Perfectly. So, believe it or not, "Fast and Furious " is not the most successful franchise in history. No, no, no, no, no, no, no. Wait, wait, wait, wait. "Withering Heights" has been adapted into 35 films, TV series, and Oprah for over a hundred years. The latest adaptation, the 35th adaptation of the same story, grossed $250 million at the worldwide box office on a budget of $80 million. No, no, no, wait, wait. There has to be some way, right? What if we had a reliable lead actor attached to the project that had a guarantee, right? For almost 100 years, Hollywood has operated on this thing

called a star system. And we still have some traits of that. More than a screenwriter, more than a director or producer, people are attracted to faces, to actors. So back in the 1920s, film studios even contractually tied actors to the studio so that they could only appear in that studio's films. Of course, movie buffs like us were chasing other movies, right? We chased after our favorite screenwriters, for example. But most people choose actors, and that's okay. The modern version of this term is called " profit star". Tom Cruise seems to make the list every time. Go to hell. We do not negotiate with terrorists. Dwayne Johnson is not on the list.

It's about drive. It's about power. We remain hungry. We devour. There is one story here that is truly heartbreaking. Put Lady Galadriel on anything and I'm going to watch it. And I really liked " Tar". This is one of my favorite movies of 2022. It received six Oscar nominations, including Best Picture, Best Director, Best Actress, Best Original Screenplay, and also won a Golden Globe for Best Actress. "Tar" was the first film written by Todd Field to be distributed by Focus Features, the same distributor as "Obsession," but somehow " Tar" turned out to be a complete financial failure. The production budget was around $35 million. And again, even after all these award nominations, this film's theatrical gross was $29.2 million.

It is important to note that when we talk about theatrical collections, we mean how much a film earned at the box office. So these are sold tickets. Typically, movie theaters keep 45 to 50% of the box office, and the rest goes to the distributor. So out of 29 million, Focus may have only gotten about 14.6 million. In the case of "Tar", Focus Films financed the film's production and also handled distribution. And theoretically, theoretically, it's a done deal, right? Because there is no revenue share between the production company or the distribution company. They keep all the cash capital for themselves. So 29 million vs. 35 million doesn't look great, but that's just the theatrical box office, right?

Cars is on Netflix now, so I'm sure they can make some money off of that to make up the remaining 6 million, right? Well, there's one part of the budget that no one talks about in these estimates. Remember, we were looking at the production budget. This is what was paid to make the film. But with tar, focus features was also the distributor, which means all the series material we talked about depends on them. So, let's take a closer look at what PNA means. PNA stands for printed publications and advertising. Printed editions mean actual copies of the film that were previously on 35 million film. Each copy of the film cost about $2,000. So showing the film in thousands of theaters would cost

between $6 million and $8 million. If you want a classic "shimmer" movie, well, I mean it's worth it. Of course, most films are sent to theaters digitally. It costs about $150 per movie. So the P in PNA is worth almost nothing. Most of the money goes to A. This is advertising. But this is also no small matter. For example, preparing a trailer that is done by a company other than the production company can cost between $150,000 and $300,000. Then there is advertising, the typical display of commercials and television. Typically, $20-27 million can be allocated for this Then there is the press tour, which is also paid for by the distributor. This means that actors are taken to the red carpet of premieres, these interviews are organized

. You might think that these awards, like the Oscars truly honor the best film. That's exactly what they should do. But even the mere fact of a film being considered for awards requires it for your consideration campaign. You can see pirated copies of movies that contain this, and you need to create them to encourage Oscar voters to vote for this movie. In Los Angeles, you can even see billboards around Beverly Hills. Not advertising the film to the audience, but advertising the film to the critics with a "For Review" sign on the billboard. This is madness. And that costs money. Of course, a distributor typically spends $10 to $20 million just on premium advertising, sometimes more. But again, Focus did their job. They

received six Oscar nominations, although they did not win any. But let's summarize. On paper, TAR earned about $29 million. The New York Times says it cost at least $35 million to produce and market. So we thought Focus lost about 6 million on this. The theaters keep a significant portion of each ticket, and the studio still has to pay for advertising, for montages, and all that stuff. The truth is that Focus probably lost somewhere around 20 million or more on this once again critically acclaimed, solid film. And do n't think I was just picking on "TAR" as an example. There's "Nightmare Alley," um, "Locoris" pizza, and even "Fairytale Mets." They were all originally scripted, all received critical acclaim, all were nominated, and all of them flopped.

Franchises began to take over the world around 2012. By 2019, they accounted for only 42% of releases, but accounted for 82.5% of box office receipts. Meanwhile, the typical original wide release now earns around $6 million, down 82% over the decade. This explains it.every time I farted.Are you going to stop me? No, I'm not going to. You disgust me. Of course, there's a whole debate going on about whether The Lion King is an original story or simply an adaptation of Hamlet or Kim, but let's not get sidetracked. I was born in 1988. "The Lion King" defined my childhood.

For example, the death of Mufasa. Oh, spoiler. Freed an entire generation of children. How can we remake The Lion King? Of course, people hated the Lion King game. Soulless characters, without color, without emotion. Even Elton John hated him. Nightmare. A complete failure, right? The Lion King roared into theaters this week, grossing a record $185 million- $1.66 billion on a $260 million budget about $150 million of which was in the PNA box office. To this day, it is the highest- grossing film in history with an official poor rating. But Disney didn't need to sell you a new idea. PNA's $ 100 million budget wasn't created to convince you to watch the movie. It's designed to remind you that this is a story you already

know, and that it's back. For an original like "Tar," that money should go toward making you care about something you've never heard of. This is not easy. This is an education tax. So that's it? Are we on track to completely repurpose content by the end of our lives? How do we get out of this circle? The naive answer to this question is simply that we will force people to watch more scripted films. But that's easier said than done. And yet, for our next video, we're working on a that we developed that uses a few different methods to find movies that aren't obvious choices for you. You need to subscribe to be sure you'll be online when it comes out. But the success of "Obsession" was not only due to the fact that it was the first film to be

scripted. Moreover, it was about breaking the PNA budget template. Take, for example, "Smile " from 2022. They paid actors to smile for random cameras. Very creepy. Crazy placement in Major League Baseball games. Millions of views on TikTok from reposts of what? An idea that cost a few hundred dollars. Brilliant. And if you're as old as I am, maybe you remember this too. I'm going to die from here now. The old Blair Witch project, not the new one, because, of course, a Old. They spent practically nothing, no TV ads, no billboards. This was before

social media or algorithms took over the world. They created a fake documentary website claiming that the students had actually gone missing. They handed out flyers about missing people at festivals. They used early internet forums to convince people that the footage was real. An independent film with a box office of 60 thousand became a global blockbuster with 250 million. The reason you watched " Obsession," the reason it became Lindsay's favorite movie, was probably not because the critics loved it, but because the PNA budget was maxed out, and because the movie's distribution seemed to take on a life of its own. I knew there were moments in this movie that could possibly become memes.

I mean, sure, you hope and dream, but I didn't expect this whole movie to become a meme. I mean, people just use, you know, her face is a meme, when she smiles, when she frowns. Dinner scene at Lil Tony's. This is all becoming a kind of meme. This is really funny. So many coincidences for this story to happen, right? This is a YouTuber who understands internet culture, who understands memorable moments. The main character who broadcasted on Twitch. And don't get me wrong, I liked the movie " Obsession," but I do n't think the quality alone is what makes everyone talk about " Obsession." It's all in this PNA box. But such stories are rare.

Very, very rare. For every Blair Witch project, there are hundreds of originals that tried something similar and just disappeared. So why does Hollywood continue to spend $250 million on a remake that everyone claims to hate? God, they really hit the Nost button on this one, because the biggest risk is n't in making the movie. The biggest risk is convincing people to care, and remakes avoid that risk because they have decades of free marketing. Well, the live-action film "Moana " is a tiny hope that this will stop. It cost $250 million, about $120 more than PNA's cost, and grossed $294 million worldwide. So Disney could actually lose money on this movie. Perhaps they flew too close to the sun.

Released as competition to Toy Story 5, Moana 2 grossed over a billion dollars, but just 19 months earlier, audiences had already gotten their dose of Moana. Dwayne Johnson's wig probably didn't help either. But here's the actual math. Disney doesn't suffer when it loses money on projects like the live-action film "Moana," because "Moana" isn't the only remake they've remade. " Beauty and the Beast $160 million at the box office, $1.2 billion worldwide. "The Jungle Book"- $165 million, revenue almost a billion dollars. In each of them, they used a trick that we now know.

Take a name that people already love, skip that education, PNA tax entirely, and let decades of nostalgia do the selling for you. So yes, nostalgia is a cheat code. Here is the drink you are ordering. The real villain here is not laziness or lack of ideas. This is how expensive it is to make people worry. As a YouTuber, I am very optimistic about YouTube films like this. Obviously, now that YouTube is seemingly becoming television, I can't help but wonder if it's a platform for a new generation of filmmakers. For example, I grew up in Costa Rica. I studied film production and gave up on the possibility of ever creating anything resembling a film because it was a

different world that I would never be a part of. So my idols were these unreachable people on the other side of the world. Movies are art, and YouTube is just social media. But now that I see Curry, Markiplier, and Kane, along with other creators, leaving the tiny screens of their phones to create for the big screen, it makes me incredibly happy. Perhaps it is YouTubers who are changing the trend of unoriginal ideas. Maybe it's YouTubers who are using our audience, our understanding of guerrilla marketing, to finally turn this trend around. In the end, it all comes down to family.

I don't have friends, I have a family. Get out of here. Thank you very much for watching. YouTube thinks you'll like this video from our channel, you should watch it. And don't forget to subscribe to be notified when our recommendation system is released. See you next time.

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