The Cost of a Movie

This is not the typical lament of paying an arm and a leg to see a movie at the local Cineplex, and then taking out a loan to order the tub o’ corn.  But, have you ever stopped to really think about the cost of a movie? Yes, there’s the cost you pay at the box office, and the sometimes whopping amounts that ‘A’ list celebrities get for starring in the summer blockbuster, but there’s much more. The cost of a movie includes the time it takes those involved to make it, the years it took for them to get there and the hopes and dreams of those invested in it, and even the amount of time people spend watching it, this is the total cost of a movie. Sometimes the cost is great and other times not so much. But how much should a movie cost? Does the cost matter if, after years of effort and millions of dollars spent, no one ever watches it again?

The average person has no idea what it really takes to make a movie, they think of all the glamor but not all of the hard work. Someone with a little more of a sense of industry can guess that it takes some management to make a movie, but that’s far from the whole story.

Whether you’ve got a major Hollywood studio bankrolling you or you’re a film school dropout, to produce a movie not only takes a ton of planning but it takes many years of learning the art and the business of making films. It’s like how people believe in overnight successes, but they don’t see the years of pounding the pavement for that overnight success to actually come to fruition. Even big time movie producers will have lots of low budget films they made before anyone ever heard of them. Of course, everyone else working on the film, from the actors to the cameramen and lighting guys, have all spent years learning and working to get where they are too.

All of the people that have taken years to get to where they are, is also what causes a lot of the cost. These people need to get paid and the better they are, the more they cost. For all the real costs in terms of time and money, however, Hollywood movies are in fact bloated in terms of financial cost and there are a variety of reasons, some political and some just mismanagement. You’ve also got to consider the fact that everybody tries to get a piece of the pie. People seem to have a general mentality that if people want something that they can charge whatever they want and people will pay it. As much as Americans love movies, there’s a ton of entertainment alternatives, not just the smaller screen that is getting ever smaller on your phone to the ever bigger screen in your living room, but the tons of activities, sporting events, and destinations people have to choose from. With all the entertainment choices, that doesn’t even take into account the other choices people have, like paying bills.

Less has to be more. Whenever I see businesses seeming to gouge customers for some ridiculously high amount for a product, I just think, “don’t they know if they charged a reasonable price they would get a lot more customers and make even more money?” To which the business owner might respond, “You don’t know all the hidden costs.” Well, I have an idea, but fear of losing money and pushing your prices higher isn’t the answer. It’s just a simple fact of human nature and economics that the more something costs the fewer people will do it.

Let’s be fair though, in a movie you have the above the line costs, which are the producer, director, script rights, actors and then all the below the line costs which include, production insurance, travel, location rental, equipment,  props, and the army of crew including catering editing, makeup, grips, best boy and so forth. There’s also post production costs, like errors and omission insurance and of course marketing (as much as the whole movie budget sometimes) and then you lose like half of the money the film makes to the distributor.

The reality is that each year the domestic film industry grosses about $12 billion dollars and that doesn’t count the thousands of films made every year in foreign countries including the biggest producer of films, Bollywood. But when adjusted for inflation films aren’t necessarily making more money every year, and a lot of movies lose a lot of money.

The other part of the puzzle is that low budget movies have succeeded and they have the potential to make much more than they cost. The average Bollywood movie has a budget of 1.5 million compared to a Hollywood movie which averages about $50 million. Bollywood makes over 1000 movies a year compared to about 700 that make it to release in Hollywood.

Some of the most successful movies of all time in terms of ROI include many Christian or independent films. The reason they can make so much money is because they cut out as much as the top of the line costs as they can, by doing a lot of the work themselves and getting others to volunteer. The second thing they do is, they are honest to goodness penny pinchers when spending money because they have to be.

So where does the future lie? No one really knows, but certainly Hollywood can stand to pinch a few pennies and it could give more people a chance to showcase their talent than just the big names. But really it seems there could be a future in niche markets.

Let’s go back to this idea of cost. Movies can take years to make, and those 3D animated movies that we love can take 7 years or more to make.  Is it worth it when you consider that in the best of circumstances people will flock to see a movie by the millions for a couple of weeks, and then by the next year most movies will hardly be watched again?

For me, a movie is more about the journey than just the cost. Movies even though they take years to make and produce only a 2-hour product are financially successful as businesses, and they build on top of each other. If you want to help bring the cost of movies down, actually buy your favorite movies and go back and watch them again in a few years. For some people, watching a great movie even just a couple of years later is like a whole new experience with just a bit of déjà vu. But you can’t just count on those movies being available on Netflix.

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