• by Wayne Friedman , Staff Writer, April 5, 2019

As theatrical box-office hits continue to be the lifeblood of major film studios, one media analyst group worries whether mid-size and smaller-focused theatrical movies can move to OTT digital home entertainment platforms.

2018 films grossing more than $100 million a year in U.S. box-office revenue -- mostly the big action-adventure/ fantasy movies -- now have a 63% share of all box-office revenue (versus 49% in 2011), its highest share ever, according to MoffettNathanson Research.

This means the share for small box-office-producing movies has shrunk, in particular, those movies making under $50 million, which now have a 14% share, down from 25% share in 2011.

Movies making between $50 million and $100 million, however, have maintained their overall share at 24%, roughly the same as it has been since 2010.

Michael Nathanson, senior research analyst for MoffettNathanson, writes: “The industry’s push for premium ticket pricing and amenities, combined with the increasing globalization of the film market should further fuel the studios.”

But he adds: “What happens to the attendance for non-blockbuster movies as more content becomes available on the upcoming streaming services? Will studios keep creating these mid-range budget films for theatrical release if their OTT options are successful reaching scale?”

U.S. box-office revenue grew 7% in 2018 to $11.9 billion, according to the Motion Picture Association of America.

MoffettNathanson says the top 10 grossing 2018 U.S. movies had a 33% share of all U.S. box-office revenue -- about the same levels those movies have had since 2015, when it was 35%.

The big five film studios of the major five diversified media companies -- Walt Disney, Fox, WarnerMedia, NBCUniversal and Viacom (Paramount) -- posted another record year in 2018. Film revenues were up 3% to $32.1 billion.

This is the second year of low-percentage single-digit growth after a modest decline in 2016.

In 2018, Walt Disney gained 11% in theatrical film revenue over 2017, a whopping $3.1 billion — the biggest studio champ of the year.

Warner Bros. was next, pulling in $1.94 billion, flat results versus the year before. NBCUniversal was up 4% to $1.94 billion; Sony Pictures Entertainment was flat at $1.34 billion. Fox was also flat at $1.23 billion, while Viacom (Paramount) was down 8% to $757 million.

Looking at big diversified media companies, theatrical film revenues at WarnerMedia now represent 25% of all its revenues. Viacom (Paramount) is at 21%; NBCUniversal,  20%; and Walt Disney 18%.