More movie means more choice in the market to the point of confusion among consumers. Further increasing film output may be detrimental to the market; moviegoers may get alienated by unfamiliar choices, and films may find it more difficult to recoup costs.
The reasons franchises, especially superheroes, have been thriving in the last two decades is because of the excessive choice of movies. The general public struggles to pick which one to watch, so they pick franchises with expected plots. This market trend is partly why Disney's Bob Iger bet on franchises, acquiring Marvel and Lucasfilms.
The paradox of choice is best illustrated in Sheena Iyengar's "The Art of Choosing." An experiment showed that when supermarket shoppers were presented with more choices for a category (e.g. jam), they stuck to the choices they were already familiar with.