Are Film Studios Losing Money Due To A Strong Dolar?

11:36 AM Joseph Aberl 0 Comments

It almost looks like the International Box Office might be damaging the success of companies, as even Universal Pictures might have to take in some damage control even after having some massive successes such as Jurassic World or Fast & Furious 7.  Thanks to the excessive growth in China, it seems the worldwide Box Office is 6% ahead of that from last year and might even pass $38 billion for the first time. With such massive successes alongside other projects passing the $1 billion mark, what exactly is the problem?[1]

Well, the classic issue with any exported products is the various exchange rates between the various countries. The other currencies have been dropping in value, which may be a sign that many of the massive production companies will have to calculate with a total of $3 billion by the end of the year. The overall worldwide Box Office haul will lose around 10 – 12% ending in $26 billion according to Rentrak.

The Euro dropped around 19%, Russian Ruble down 38%, Brazil with 24%, Japan with 15%, Mexico 14% and so on. These are some significant drops in exchange rates for such a successful year. So by calculations it seems that while Universal made a phenomenal $4 billion internationally, it will have to calculate losing around $400 million. Even Disney, who ranks in 2nd overall, had massive successes with Avengers: Age of Ultron and Inside Out, but the sequel was a bigger hit overseas seeing its numbers drop as a result. This could be a reasoning why Disney considered it a failure, as it wasn’t as strong as expected in the domestic market.

If anyone is wondering if this is a bad sign for the future, do not worry. It is something that technically happens over time and around two years ago the U.S. even profited from a weaker dollar currency. Naturally, it would be almost impossible for companies to adapt to these changes, as it is simply not possible and no one can predict these changes precisely.

What are your thoughts on the matter? Leave a comment below!