Domestic box offices had a terrific summer. In May, June, July and August of 2014, each of those months brought in about $1 billion in ticket revenue, fueled by hits like “Guardians of the Galaxy" and “The Amazing Spider-Man 2.” But what makes the summer months, and the blockbusters the studios release during those months, profitable? (Related: See Investopedia's article on How To Make Money on the Movies.)

More Time for Movies

Without the obligation to attend school during the day and do homework at night, students of all ages are looking for ways to occupy their time in the summer. Bigger audiences who are available every day and night help increase movie sales during the summer. In 2013, 2- to 24-year-olds made up 57% of frequent moviegoers, those who go to the movies at least once a month and drive ticket sales, according to the Motion Picture Association of America. 3D movies, which have higher ticket prices, are also more popular among this age group than among older viewers, and theaters increased their digital 3D screens by 7% in 2013 compared with 2012, MPAA data show.

Compared to other activities, going to the movies is one of the least expensive ways for families to enjoy an outing together. While visiting a theme park costs a family of four an average of $199.00 and attending a Major League Baseball game costs them an average of $110, going to the movies costs them about $33, based on a nationwide average ticket price of $8.13.

Broad Appeal

With larger audiences available for movie viewing, studios choose the summer months to release the movies with the broadest appeal because they know that familiarity helps to drive profits. Famous actors, popular superheroes, sequels and remakes compel people to visit the theaters and keep fans coming back for more. More than 20 of the films released in 2014 will be sequels. And since 2010, one in three blockbusters has been based on a comic book, according to a data analysis by lifestyle writer Walt Hickey at FiveThirtyEight. (See Investopedia's slide show on the Most Successful Movie Reboots.)

“A film franchise is like a well-known brand where the customers know they will not be disappointed,” says Barna William Donovan, a professor of communication and media studies at Saint Peter’s University in New Jersey. “This summer we have superhero films like the latest ‘X-Men’ film or the ‘Captain America’ sequel. People who like superheroes know that these franchises will always deliver exactly what the audience expects,” he says. “Over the last several weeks, 'Transformers: Age of Extinction' and 'Dawn of the Planet of the Apes' were both tremendous successes because they were able to attract an established fan base and give those fans exactly what they expected to see.” 

Big Name Producers and Actors

Big name producers and actors add quantifiable value to summer blockbusters. The Bankability Index, put together by Beverly Hills-based movie business research firm The Numbers, shows which people add the most value to the film industry each year. Many of the top-ranked individuals are associated with at least one summer blockbuster. For example, coming in a No. 1 in June was Steven Spielberg, executive producer of  June 2011 release “Transformers: Dark of the Moon,” which made $1.1 billion in worldwide box office sales. He also produced June 2009’s “Transformers: Revenge of the Fallen,” which earned $836 million worldwide box office sales. No. 2 is Samuel L. Jackson, the actor who played Nick Fury in May 2012’s “The Avengers,” which raked in $1.5 billion in worldwide box office sales. He played the same character in “Captain America: The Winter Soldier,” which opened in April 2014 and has earned $712 million worldwide and in “Iron Man 2,” which was released in May 2010 and earned $623 million worldwide. 

Repeat Viewings, Interconnected Plots and Carefully Timed Releases

Star-studded sequels, superhero films and action flicks, with all their special effects and stunts, offer a virtual roller-coaster ride entertainment experience that gets audiences coming back to see the same movie over and over again, Donovan says, and studios know their summer releases must inspire repeat viewings. “If audiences don’t come back for a summer film several times, those films have no chance of earning back their very large budgets and turning a profit,” he says.

In addition, the numerous Marvel movies interconnect to encourage moviegoers to see all of them at least once. They’re also carefully spaced to avoid competing with themselves. For example, this year, “Captain America: The Winter Soldier” came out in April, “The Amazing Spiderman 2” came out in early May,  “X-Men: Days of Future Past” came out in late May, and Guardians of the Galaxy was released in August.

Kids’ Movies

“Since the type of moviegoer who is looking for this sort of roller-coaster entertainment also tends to be young, another important element for a blockbuster profit is the youth appeal,” Donovan says. Four of the top 20 most profitable movies of all time based on absolute profit on worldwide gross ticket sales, according to The Numbers, were animated kids’ movies with summer release dates. “Despicable Me 2” (July 2013) made an estimated $549 million in profit, “Toy Story 3” made an estimated $512 million in profit, “The Lion King” (June 1994) made an estimated $418 million in profit and “Ice Age: Dawn of the Dinosaurs” (July 2009) made an estimated $417 million in profit.  “The Avengers,” the Harry Potter movies, the Twilight movies and the Transformers movies also made the list. 

Licensing and Merchandise

“The summer spectacle movies also have another element that helps guarantee blockbuster profits: these films are merchandisable,” Donovan says. The highly visual, kinetic and youth-oriented film franchises released during summer lend themselves well to action figures, clothes and toys that are a major source of income for studios, he says. Marvel/Disney and Warner Bros. Consumer Products have reported earnings of billions annually in licensing and merchandise sales. 

Horror Films

While October has long been the traditional month for horror film releases, last year, New Line and Warner Bros. released “The Conjuring” in July and it was a huge success. It became one of the top-grossing horror films of all time, with $316.7 million in global revenue, and was highly profitable thanks in part to a meager $20 million production budget. Another horror film released last summer, “The Purge,” was also a success with $89.3 million in global revenue and a miniscule $3 million production budget. But while horror movies can be highly profitable because they tend to be low budget, they tend to make most of their profits opening weekend, with ticket sales dropping off dramatically following weekend.  “The Conjuring” was an exception. 

The Bottom Line

While the summer films that studios hope will drive their profits aren’t always successful, companies like 20th Century Fox, Warner Bros. and Universal have the art of the summer blockbuster nearly down to a science. They know when viewers are most available and what audiences love, and they plan their productions and release dates accordingly. For the individual consumer, going to the movies in the summer is an inexpensive treat, but millions of box office sales add up to make the most popular summer movies hugely profitable.

 

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