Originally Posted by kane

It isn't the sole reason, but it plays a role. The studios know that there is going to be a certain amount of piracy that they can do nothing about. In the case of smaller movies that might be enough to keep it from getting a wider theatrical release. The studios then decide that the risk of making a handful of smaller movies might no be worth it so they make mostly big movies that they can count on making money and those are the movies that are produced to appeal the the lowest common denominator.

There are other factors as well, of course. For example a studio would rather make a movie where they can also sell toys, make a partnership deal with a fast food place, sell a soundtrack and other products that are associated with the movie. Not to mention how many people will buy it on DVD/Blu Ray when it comes out.