The now multibillion-dollar cinematic franchise, Marvel Entertainment had filed for bankruptcy in 1996. Merrill Lynch had given them a $525 million loan in 2005 when the world economic growth was weakening. Though this may look risky today, it was in line with the working of financial institutions before the financial crisis of 2008.
Marvel had then decided to launch a new superhero Iron Man, who was considered a B-list superhero. Fortunately, this gamble paid off and Iron Man went on to make more than $585 million at the box office. This movie came out towards the end of 2008, around 6 months after the financial crisis hit.
‘Iron Man’ in Domestic Box Office in 2008
Source: The Numbers
There was also an upward spike in the ticket sale and at the box office between 2008 and 2009.
How did movies do well during a recession when going to movies was considered a luxury good? It seems that these movies provided escapism. The movie and the characters were something people could keep coming back to and it had managed to get the perfect combination of nostalgia and comfort. According to behavioral economics research, some movies perform better in bad times. Drama and action are the most common tropes of Marvel movies and these two genres were found to perform the best during recessions. Christopher Nolan’s ‘The Dark Knight’ released at the start of 2008 had performed better than ‘Iron Man’ at the box office that year. Daredevil, Elektra, Hulk, and several other superhero movies came before these movies, but they all failed to make an impact.
After the Great Recession Nominal wage growth has been lower than expected. In 2017 the Global wage growth fell to its lowest since 2008. So, the ‘escapism’ mentality might still apply. In the end, economics is about supply and demand. The superheroes and their gadgets, the incredible characters, and the witty one-liners provided a much-needed positive escape. No one wanted to see movies with tragic endings when the reality was equally depressing. The initial boost during this time lead to increased investment in the making of these movies. The technology upgraded and the storylines became more complex, better-written, and intertwined with each other.
Now, these superheroes have become a part of everyday life.
REFERENCES:
· Ferris, H. (2018, February 14). The Economics of Superheroes. COLOUR THROUGH THE LINES. Retrieved 10 April 2022, from https://www.colourthroughthelines.com/master/2018/1/3/superheroes
· Global wage growth lowest since 2008, while women still earning 20 per cent less than men. (2018, November 26). ILO. Retrieved April 10 2022, from https://www.ilo.org/global/about-the-ilo/mission-and-objectives/features/WCMS_650551/lang--en/index.htm
· Iron Man (2008) - Financial Information. (n.d.). The Numbers. Retrieved 10 April 2022, from https://www.the-numbers.com/movie/Iron-Man#tab=box-office
· Movie Comparison: Iron Man (2008) vs. The Dark Knight (2008). (n.d.). The Numbers. Retrieved 10 April 2022, van https://www.the-numbers.com/movies/custom-comparisons/Iron-Man/Dark-Knight-The#tab=day_by_day_comparison
· The Economics behind the Marvel Cinematic Universe – Business Review at Berkeley. (2019, November 15). Businessreview.berkeley.Edu. Retrieved April 10 2022, from https://businessreview.berkeley.edu/the-economics-behind-the-marvel-cinematic-universe/
· The Rise of Superhero Films. (2017, June 30). New York Film Academy Student Resources. Retrieved 10 April 2022, https://www.nyfa.edu/student-resources/the-rise-of-superhero-films/
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