Maybe The Answer Is To Not Focus On Making $200 Million Movies...
- Thread starter TheDingo
- Start date
I think the author's premise is flawed:
"Except, when you follow a formula that says "we do this because this is what we do" rather than "how can we create something that people will like and will bring in more money than we spend?""
The premise is Hollywood goes, how do we spend 200 million on a movie so we can call it a "blockbuster", rather than trying to figure out how to make a good movie.
I don't think that's accurate. Hollywood has tried the shotgun approach the author suggests in the past. Make 10 movies that cost 10 million each, rather than one 100 million dollar movie. Most studios had an "indie" division for a while when indie films were doing well.
The truth is you can make 10 low budget movies for 10 million each that are all duds and still lose all your investment. More low budget movies does not guarantee success. Plus, you make more on the 100 million dollar movie that is a success, than if a lot of the low budget movies are successes.
No low budget movie has had the kind of monetary success of an Avatar, Avengers, etc., big budget movie.
The other thing to remember is big studios like Disney can make a disaster like Lone Ranger, and brush it off because they make so much profits on other divisions of the company. When a big movie pays off, it will offset a bad year that one of the other divisions has. It's called "diversification".
Another consideration is that marketing 10 movies is going to be MUCH more expensive than marketing one movie.
Eric Boellner
Well-known member
Not to mention, merchandising and other subsidiary licensing rights from the film. It's funny, because the author lists Pacific Rim among the bombs, but the reality is, that film will make WB/Legendary more than enough money off of toys, pillows, bedspreads, shower curtains, shoes, video games, etc. to recoup its budget and then some. And the difference between big budget films and low-budget hits, like you said, is that the "and then some" is so much bigger. Even if the profit ratio is 1.2:1 on a blockbuster and 4:1 on an indie, that .2 for the blockbuster makes up for ten of the indie releases.
-EMB
Barry_Green
Moderator
Agreed entirely.
I always love the "Hollywood doesn't know what they're doing" arguments, when -- Hollywood is where they're exhibiting every possible sign of business success. Mansions, private jets, red carpet events... clearly they must be on to something?
Hollywood has tried the small movie before. Here's the horrifying truth -- nobody cares about small movies. Nobody watches them. But EVERYONE watches the big blockbusters, no matter how "awful" they then decry them to be. And spending a hundred million dollars on ten $10 million movies will never generate licensing deals with Burger King and product placement deals with Acura and toy lines from Hasbro or Mattel and action figures and lunchbox deals (okay, maybe that one's passé by now) and play-along apps and spinoff book series and on and on and on and on.
"Hollywood" has this whole thing pretty well figured out, and they're the shrewdest businessmen in the world.
Do they make the "best" films? That's debateable. But what really isn't all that debateable is -- they sure seem to know how to make the "most" money. And when you're doing what you're doing, and what you're doing is generally working, why change it? Sure, there's the occasional "Lone Ranger" or "John Carter" but for every one of those, there's a "Pirates" or a "Transformers" or a "Matrix" or a "LOTR" or any other of hundreds of successful, franchise, licensed big-budget projects.
I also think the author's premise is flawed, but for different reasons: I think Hollywood doesn't care about making good movies. They care about making money. And they've proven to be, in general, really rather good at it. Even these "big bombs" are likely to recoup far more than their official accounting records will show. To Hollywood, it isn't about the film. The film is just a way to get them to what they want -- prestige, power, money, privilege, accolades, fame...
... and they'd get none of that from making little arthouse films. So, they're not interested in that.
As Gillvane said, when indie films were hot, they opened up or bought up indie divisions -- Fox Searchlight, etc. If that's where the money is, that's where they'll go. Right now, they seem to be focused on the big-budget extravaganza. Why? Because, inescapably -- THAT'S WHERE THE MONEY IS.
If Lucas/Spielberg's predictions come true and the bottom does fall out of the big-budget production, then they'll adapt. But Lucas knows as well as anyone, the big money isn't in the box office, it's in the licensing, and it's a lot harder to license a little no-name project.
Besides, lots of these films are paid for, or largely paid for, before they're even released. When Chevy pays up big bucks to have the Camaro featured in Transformers, that's a straight-up budget reduction. When Burger King pays big bucks to be the official fast-food partner for Transformers, that's another big chunk of the budget that's already paid for. Films aren't typically paid as cash out of the company's pockets, they're "packaged" -- when someone puts together the $200m budget, part of that is an understanding that they'll get a big percentage of that (Half? More?) before the script is even written! And that money doesn't show up in the "box office receipts" numbers we hear about.
If you want to see when the bottom will drop out of the $200m movie, watch for when Burger King and Chevy and Acura and Apple and all the rest refuse to buy into them and be partners. When that money goes away, that's when the budgets will go down.
I always love the "Hollywood doesn't know what they're doing" arguments, when -- Hollywood is where they're exhibiting every possible sign of business success. Mansions, private jets, red carpet events... clearly they must be on to something?
Hollywood has tried the small movie before. Here's the horrifying truth -- nobody cares about small movies. Nobody watches them. But EVERYONE watches the big blockbusters, no matter how "awful" they then decry them to be. And spending a hundred million dollars on ten $10 million movies will never generate licensing deals with Burger King and product placement deals with Acura and toy lines from Hasbro or Mattel and action figures and lunchbox deals (okay, maybe that one's passé by now) and play-along apps and spinoff book series and on and on and on and on.
"Hollywood" has this whole thing pretty well figured out, and they're the shrewdest businessmen in the world.
Do they make the "best" films? That's debateable. But what really isn't all that debateable is -- they sure seem to know how to make the "most" money. And when you're doing what you're doing, and what you're doing is generally working, why change it? Sure, there's the occasional "Lone Ranger" or "John Carter" but for every one of those, there's a "Pirates" or a "Transformers" or a "Matrix" or a "LOTR" or any other of hundreds of successful, franchise, licensed big-budget projects.
I also think the author's premise is flawed, but for different reasons: I think Hollywood doesn't care about making good movies. They care about making money. And they've proven to be, in general, really rather good at it. Even these "big bombs" are likely to recoup far more than their official accounting records will show. To Hollywood, it isn't about the film. The film is just a way to get them to what they want -- prestige, power, money, privilege, accolades, fame...
... and they'd get none of that from making little arthouse films. So, they're not interested in that.
As Gillvane said, when indie films were hot, they opened up or bought up indie divisions -- Fox Searchlight, etc. If that's where the money is, that's where they'll go. Right now, they seem to be focused on the big-budget extravaganza. Why? Because, inescapably -- THAT'S WHERE THE MONEY IS.
If Lucas/Spielberg's predictions come true and the bottom does fall out of the big-budget production, then they'll adapt. But Lucas knows as well as anyone, the big money isn't in the box office, it's in the licensing, and it's a lot harder to license a little no-name project.
Besides, lots of these films are paid for, or largely paid for, before they're even released. When Chevy pays up big bucks to have the Camaro featured in Transformers, that's a straight-up budget reduction. When Burger King pays big bucks to be the official fast-food partner for Transformers, that's another big chunk of the budget that's already paid for. Films aren't typically paid as cash out of the company's pockets, they're "packaged" -- when someone puts together the $200m budget, part of that is an understanding that they'll get a big percentage of that (Half? More?) before the script is even written! And that money doesn't show up in the "box office receipts" numbers we hear about.
If you want to see when the bottom will drop out of the $200m movie, watch for when Burger King and Chevy and Acura and Apple and all the rest refuse to buy into them and be partners. When that money goes away, that's when the budgets will go down.
Barry_Green
Moderator
Funny, I was agreeing with Gillvane, but it took me so long to write out that essay that Eric came in and made many of my points for me. 
So I agree with both of them.
So I agree with both of them.I know there's a lot of accounting that goes on that's way over my head, but what I always find weird is when they declare the film lost money, which is right away. Someone Is still making money for Forbidden Planet which was made in 1956. Movies make money for a long, long time even if the revenue drops off steeply after they leave the theaters.
Eric Boellner
Well-known member
There's also massive tax incentives, like the $20mil+ Transformers 4 is getting back from Michigan, and multi-million-dollar foreign presales for riskier mega-budget films the studios are nervous about.
Barry_Green
Moderator
This is very true. I know someone who has points in a major, major, Oscar-winning from from about 25 years ago, an iconic film that everyone knows instantly, one that won four Oscars for Best Picture, Best Actor, Best Director, and Best Screenplay, and was nominated for four more. And to this day, those points have never paid off a single penny, the studio accounting still shows it as a loss.
Barry_Green
Moderator
Yet another fine example.
When Section 181 was active, I was able to show potential investors that we could get 87% of their money back even if the film never even sold a single ticket, never made a dime at the box office. The way the tax incentives at the federal and state level worked, and the tax rebates that were available at the time, would have shown that investing in a film was almost entirely risk-free. Of course, Section 181 doesn't exist anymore, and the incentives at state levels are drying up rapidly, but it's just another example of how successful packaging can work.
Batutta
Major Contributor
Sadly, I think the only lesson Hollywood will learn from this summer is to not try anything new. Most of the big bombs were from original ideas or attempts at new franchises (Pacific Rim, Lone Ranger, RIPD, White House Down). Only World War Z managed to be somewhat successful, and even then just by the skin of its teeth. I personally believe this year is going to be remembered as the year the movie industry finally became a niche business. The idea of the 4 quardrant film, that elusive movie which appeals to all demographics, is just about dead. I think it's actually been dead for a while, with the biggest hits actually only appealing to a couple demographics but seeming bigger because of inflated ticket prices. When you look at actual tickets sold, attendance has been declining for a long while. Audience attention is becoming more and more split up. People aren't going to the movies as a family anymore. So the idea of a movie which appeals to everybody ends up appealing to nobody. People want what THEY want. The kid is happier watching his entertainment on an ipad. The parents are happier watching cable shows in their living room. The teenagers are still going to the theater to get out of the house, so that's why most of the theatrical stuff is aimed at them these days.
S. Matthews
Well-known member
There has been indies that have grossed far more than many blockbusters but only a few and they are the exception to the rule, but if I remember correctly the highest grossing film of all time is my big fat Greek wedding (made for 6mil adjusted, and earned over 350mil profit), slumdog millionaire was very profitable as well.
Thing is you need big specatacle movies as well as human interest movies exploring the human condition. problem is people are not as willing to pay big bucks to see a b spectacle movie, on the mass scale we have gotten far to used to the crazy high quality effects, and the fast pace of trends and techniques these days push the spectacle further and further each year to set themselves apart. This increases or at the least maintains the high cost of production for your standard action fantasy and scifi genres. I think it's all about these big budget movies having the confidence in their work not to use explosions and massive pointless car chase and crashes to hook their audiences, go back to the Jaws style where the less you see of some things the better they work. Or perhaps just use some innovation and imagination rather than regurgitation and the old money hose to solve all their problems.
then again what do I know
Have a good one!
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Drew Ott
Wish I were banned.
Regarding the elusive 4-quadrant films, I still think the low/medium budget "indie" film is where that spot exists.
Think of Juno or Little Miss Sunshine type films. They're really dark, funny, family films. I still have faith in the "story is king" mentality, though with the caveat that, of course, execution has to be perfect as well. It also helps to have A-list actors.
Think of Juno or Little Miss Sunshine type films. They're really dark, funny, family films. I still have faith in the "story is king" mentality, though with the caveat that, of course, execution has to be perfect as well. It also helps to have A-list actors.
intrinsic pictures
Member
It's all about demographic. Hollywood doesn't make movies, they make amusement park rides.
adkimery
Veteran
It's not just in Hollywood that this is happening. In video games and books as well the 'middle class' offering is quickly disappearing. The market is heading in a direction to where only the polar opposites survive (an expensive AAA title or a low/micro-budget title).
-Andrew
refocusedmedia
Veteran
I was going to mention this as well. 2015 looks to be about as "stacked" a year and the movies have ever had. I expect it will be a record-setting year, regardless of any "flops". The worst part though is it will only reinforce the notion that audiences want sequels and franchises.
Audiences do want sequels and franchises. Why wouldn't they if the IP is good? What would be the point in only making one Harry Potter movie and not doing another one?
I think the perception is that Hollywood won't make anything new but that's not true or else we wouldn't ever get new movies to sequel or franchise. What happens is that Hollywood is not good at originating new story franchises. The new IP franchises tend to come from books, video games, and comic books. For whatever reason these mediums seem to be better for developing new stories people want to see turned into movie franchises, rather than brand new movie scripts.
We do see new movie scripts. A good example is Looper. A solid movie many people liked (I didn't care for it but just because I'm not often entertained by time travel stories that create paradox). Although it was a new script, it's not IMO very franchisable (not really a word I know).
I think a lot of these did well at the box office, as in made money compared to their budget, and are spec scripts not based on an existing IP:
http://scriptshadow.net/article-top...-2012-and-what-it-means-for-your-next-script/
Andrius Simutis
Veteran
Marketing a sequel is much easier and cheaper than starting from scratch. People are also more comfortable gambling on something they know the basic outline of. So that's a big part of the reason why we see so many sequels or rehashing of known stories like comic books.