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Video-on-demand rentals and digital downloads helped a bit as the years went on, but the movie business never fully recovered. Annual home-entertainment revenue, and the studio profits that follow from it, fell by nearly half between 2004 and 2016, from nearly $22 billion to $12 billion. At the same time, Americans became much less important to the American movie business. As the economies of developing nations throughout Latin America and Asia grew, theater construction surged and the rising middle class spent their newfound wealth on what was to them the novel and luxurious experience of a night out to see the latest Hollywood flick. International box office exploded, from $8.6 billion in 2001 to $27.2 billion in 2016. The biggest driver of growth in recent years has been China; its box office grew from $2 billion in 2011 to $6.6 billion in 2016 and is expected to surpass U.S. box office before the end of the decade. Domestic box office, meanwhile, grew by only 40 percent between 2001 and 2015, to $11.4 billion—reflecting a slight decline in attendance, once you factor in ticket price increases. Both trends were like a siren’s wail to studio executives, urging them to make fewer, bigger, louder movies. DVD sales declines were smallest for movies with budgets of more than $75 million, and as studios tried to cut costs in response to plummeting home-entertainment revenues, risky original scripts and adaptations of highbrow books were the first to go. Annual movie releases by major studios were 139 in 2016, down 32 percent
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