Abstract/Summary

The film industry is characterised by high levels of uncertainty, yet the firms that dominate global film distribution have remained remarkably stable over the last century. The ability to transform uncertainty into risk, and to manage these risks effectively, has arguably been the outstanding achievement of major American film studios since the 1920s. This article examines how the risk management strategies of these firms have evolved over time, with a particular focus on the growing prevalence of sequels during the last 30 years. We analyse data on the box-office earnings and budgets of over 4000 films released between 1988 and 2015, and find that sequels have become an increasingly important source of industry profits since c.2000. We place this trend in historical context, and argue that while sequels themselves are not new, their role within film portfolios has changed, and that this represents a distinctive approach to risk management within the industry.