Hit Makers: Why Things Become Popular

by Derek Thompson

The next best solution is to surround audiences with advertising to ensure that every consumer who might be interested in a new product is aware of it. Americans bought almost thirty movie tickets a year in the 1940s. These days they buy about four. How could studios wrangle this newly fickle crowd into movie theaters? It would have to turn movies into national blockbuster events—lavish productions buoyed by monstrous marketing budgets with nonstop commercial and posters plastered on every square inch of the country. In a 1997 economic paper, De Vany said movie studios could reduce the risk of failure through “unprecedented promotional expenses.” And that’s exactly what they did. The number of major-studio films has fallen in the last two decades while marketing costs have soared. In 1980, the major studios spent less than 20 cents on advertising for every $1 they earned at the box office. Now they spend 60 cents to get that buck.