'Avengers' Scores, But Flops Hurt Movie Studios
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What is the main topic discussed in this episode?
Your Money Briefing. Money and market stories from The Wall Street Journal. I'm J.R. Whelan in New York. Some movie blockbusters out this summer are expected to pull in between half a billion and one billion dollars each. But that doesn't necessarily translate to good news all around. We'll explain in a moment. First, these money headlines. The Trump administration is expected to make about 15,000 additional H-2B work visas to available for low-skilled foreign workers this summer. And that's important for businesses like fisheries, landscapers, and those in summer tourist spots. The program is also popular with businesses, including some of President Trump's properties, who say they can't find sufficient workers, particularly when unemployment is at 3.9 percent, the lowest since 2000.
How big were the summer blockbusters like Avengers and why does that matter to studios?
This year, work visas are being issued via lottery because of high demand. The program is opposed by critics, including some in the administration, who say that foreign workers drive down wages and take work from Americans. And the cost to take out a federal student loan will go up this year. The interest rate for undergraduate student loans will rise to about 5.05%. for the 2018-2019 academic year. That's up from 4.45% last year. For federal Stafford loans for graduate students, which have a limit of $20,500 per year for most graduate students, the interest rate will rise to 6.59%, up from 6% last year. The interest rate hikes will only affect borrowers taking out new loans for the coming year, which they can begin doing on July 1st.
And given that the U.S. Federal Reserve has indicated it plans to continue to increase interest rates, it's likely that the cost to borrow from the federal government will continue to go up. This is your Money Briefing from The Wall Street Journal. Welcome back, everyone. It's the summer of Avengers Infinity War. The Disney superhero blockbuster made almost half a billion dollars. That was just two weeks into its release. That's good news for Disney.
What is 'box-office inequality' and how have big movies grown relative to others?
But heard on the street columnist Justin Layhart is here to explain why hit movies don't always mean good news all around. So, Justin, you write in your column in The Wall Street Journal that these blockbusters like Avengers and Black Panther, they create box office inequality. What do you mean by that?
Movies have always been unequal, right? There's always some big movies and most of the others are smaller. But what's happened recently, just in the last few years, is that the big movies have gotten much, much bigger relative to everyone else. So, you know, this year we have Avengers, we have Black Panther. There's some other big movies that are coming out during this summer movie season. But then if you look just a little few a few names in, there's a huge drop off in terms of the expectations of what kind of money it's going to draw. There's been just a change in the business, it seems.
So you've got Jurassic Park coming out this summer from Universal. And then you've got your assortment of the garden variety rom-coms and such that are much smaller.
Yeah, I mean, there's some other big movies. Incredibles 2 is coming out. That's going to be big. There's Solo, the Han Solo movie. But then you get this big drop-off. You get sort of down to the Ant-Man movie. You know about the Ant-Man movie?
Oh, Ant-Man and the Wasp?
Is that what it is? Yeah. It's not going to do nearly as well as the others. And then you get into kind of rom-com territory. And it just doesn't look that exciting. The other thing is, I mean, we just haven't seen these breakout, big breakout comedy type movies. That hasn't been happening lately. And it's a lot of it, you know, a lot of it is sequel driven, superhero driven, that type of movie. It does really, really well. And the studios are obviously pushing it and they're pushing it for a reason. They're pushing it for a couple of reasons.
So from your column, I got that the law of averages says a certain number of movies are going to fail.
Why do studios increasingly rely on sequels and superhero films to draw audiences?
And the more budget busting films there are like Avengers and movies like that, the more likely one or more of them is going to fail.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:46
2
How big were the summer blockbusters like Avengers and why does that matter to studios?
0:46–1:59
3
What is 'box-office inequality' and how have big movies grown relative to others?
1:59–3:56
4
Why do studios increasingly rely on sequels and superhero films to draw audiences?
3:56–6:09
5
How does the rising cost of tentpole films increase the risk of expensive flops?
6:09–7:18
6
What role do changing home entertainment choices play in moviegoing behavior?
7:18–9:13
7
Why is China’s import quota pushing studios to make bigger blockbusters?
9:13–9:30
Speakers
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