– July 16, 2020
movie theater

It’s the age of franchises, sequels, and long-running shows. Thor: Love and Thunder, the fourth installment of the Thor series, is slated to appear in 2022. Disney has given the green light to a fourth Star Wars trilogy tentatively slated for release in 2022, 2024, and 2026. The fourth season of Stranger Things is in the works. The 1980s cartoon ThunderCats is being rebooted as ThunderCats Roar. Just as Bernie Sanders asked if we really need so many different kinds of deodorant, you might be tempted to ask “Do we really need so many sequels, repackagings, and reboots?”

I don’t know the mind of God and cannot tell you for certain whether we really need these in some cosmic sense. If sequels and reboots pass the market test, however, then I think that is a pretty decisive test for whether people “need” them or not.

“But sequels are hardly ever as good as the original.” There are exceptions, of course. The second installment of Sam Raimi’s Spider-Man trilogy starring Tobey Maguire was excellent (the third was…not). Many Star Wars fans think The Empire Strikes Back is the best of the series. The Dark Knight was better than Batman Begins. My daughter’s favorite movie is Thor: Ragnarok, the third installment in that series.

Generally, though, sequels tend not to be as good as the originals. The Jaws, Rocky, and 80s-90s Batman franchises being among the best examples. The first season of Stranger Things was exquisite. Seasons 2 and 3 were entertaining, but they weren’t as good as the original. They’ve set up for the fourth season, and I expect it to be like seasons 2 and 3: entertaining sci-fi/horror stories soaked in 1980s nostalgia, but I doubt they will be able to match season 1 (I would be happy to be wrong). I have still never seen the Matrix sequels as far as I can remember.

Part of the mediocrity of sequels is explained by mean reversion. Think about a baseball player who has a series of great games and ends up on the cover of Sports Illustrated. His performance then falls off. It’s not the dreaded “SI Cover Jinx.” It’s the fact that his run of excellence was unusual and his post-SI performance was more normal. The average movie, book, or TV show is mediocre, so we shouldn’t be surprised that the sequel to a great movie, book, or TV show is also mediocre.

This seems depressing. Why do we have so many mediocre sequels? The short answer is that it’s profitable. People will do things until doing it one more time is just barely worth it. Sequels to a smash hit might not bring in the same kind of money, but they might bring in enough for it to still be worthwhile to make them. A studio makes a mediocre sequel that brings in $100,000,001 and costs $100,000,000 once all the costs, including the alternative uses of the money are accounted for, has chosen wisely according to the market test. It should not surprise us, then, that the final seasons of a show or the umpteenth sequel to a blockbuster isn’t that great.

The market test is decisive. A profit is a pat on the back from the invisible hand saying, “Good job; you have taken labor, time, capital, cameras, and so on and used them to produce something that people found more valuable as measured by their willingness to vote for it with their hard-earned dollars.” A loss is a smack in the face from the invisible hand saying, “Poor job; you have wasted scarce resources that would have been better used making a different movie or maybe not even making a movie at all.” Disney had to change its long-run strategy after Solo: A Star Wars Story struggled at the box office. Disney, of course, makes a fair amount of money thanks to absurd intellectual property rules, but I suspect that most of their detractors would still decry them even if they didn’t.

My inner artiste wants to turn my nose up and sneer at the fact that it’s all about the money. But then I catch myself: who am I, I wonder, to attempt to direct private people in what manner they ought to employ their capitals? People express their preference for movie sequels by spending their money to see them rather than highbrow fare. I’m free to think they are making mistakes, and I am free to try to persuade them to do something else. I do not have the right, however, to foist upon them my vision of what is good and tasteful–or to pick their pockets to fund what I think is good and tasteful when they would much rather spend that money on a ticket to see Blowed Up 4: The Blow-Uppening or whatever is popular these days.

Studios make sequels because they expect them to be profitable. This is a good thing, though, because they are working to make Mickey and Minnie Moviegoer better off as Mickey and Minnie choose to define it according to their own preferences, values, goals, and opportunities. That is very important: market tests encourage people to provide for people as they actually are, not as we might imagine them to be. Does that mean a lot of vulgar output? Yes, it does–”vulgar” literally means “of, relating to, or constituting the ordinary people of society.” In a free market, their money speaks just as loudly as anyone else’s.

Art Carden

Art Carden

Art Carden is a Senior Fellow at the American Institute for Economic Research. He is also an Associate Professor of Economics at Samford University in Birmingham, Alabama and a Research Fellow at the Independent Institute.

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