Terminator 3 has the highest approved budget ever. I haven’t seen it yet (American movies come out a bit later in Europe), but judging from the trailers, it’s pretty spectacular, with lots of cutting-edge CGI (once more). Which leads me to my question: doesn’t CGI make films cheaper instead of more expensive? Why is it that almost every summer the “most expensive film ever made” is released, when the cost of sets, models, and stunts should be going down? I know inflation and expensive actors probably have something to do with it, but is that the only explanation? Does anyone have a clear view on this?
Lord no. That stuff can cost hundreds of thousands of dollars per frame, I think. And you also need to remember that films are progressively relying more on special effects, and are attempting more complicated CGI, which I’d wager is more pricey. Also, just because something uses special effects doesn’t mean it’s 100% done on a computer.
I’d say there are only a handful of actors who cost so much money that it drives budgets up stratospherically - although I think Arnie received $30 mil for T3 (which is going straight to his campaign fund, I’m sure). 
Also, I have seen Terminator 3 and can tell you there are a lot of non-CGI effects that look like they must have cost a fortune.
Greed?
He’s talking about why they cost more to MAKE, gatopescado.
If by frame you mean a single screen image which is shown for something like 1/32 (?) of a second, I’m sure the cost is much less. Otherwise a few seconds would soup up the entire budget. Anyone have better estimates?
There’s also inflation. The budget for Terminator 3 was $172 million. The budget for Terminator 2, released in 1991, was about $98 million. Using average inflation, Terminator 2 would have cost $130 million in today’s dollars. So the difference is not quite as extreme as it would first appear.
The budget of T3, as you said, was $172 million, so even expensive special effects would hardly soup the whole thing up (since that stuff is factored in). I’m obviously not trying to use a precise estimate, because in any case, different effects and things will cost different amounts of money. But my understanding is that effects are the very last thing put into a film (after all the editing is done) because you don’t want to waste ANY of the money you put into CGI.
Because film execs know that the summer blockbusters, and increasingly, the sequels to summer blockbusters, will be HUGE hits. All they need is one or two good weekends, at which point the next big movie will be on top.
Case in point: Terminator 3 has dropped to 4th place for earnings since opening, only grossing $9.3 million last weekend. Total gross, however, is $127.9 million, which, using friedo’s number, is almost 75% of what it cost. Once you count merchandising, DVD, pay-per-view, TV, the film is all but paid for.
Finding Nemo has grossed over $300 million, and what did that cost to make in comparison?
I think avr8mike’s reasoning is correct, but this bit is not. According to a film-industry seminar I attended a few years ago, a little more than 50% of that $127.9 million will go to the theatres showing the movie. The money doesn’t all go straight to the studio. When these films make the money they’re ‘supposed’ to, everything gets paid for, but I don’t think the profits are very large for the backers in most cases. And of course, when they flop…
Hollywood budgets have gotten bigger over the last 20 years both because the international market for Hollywood movies has gotten bigger, and because Hollywood has gotten better at squeezing money out of each release through channels like video and merchandising.
Combine this expanding revenue with competition and you get bigger budgets. Titanic cost a fortune to make … but it also made a lot of money. So all of a sudden you got people trying to make the next Titanic. “Sure it’s expensive,” the producers argue, “but we’ll make it back.” And by and large they have been right.
Spending a bunch more money on CG effects is a symptom here, not a cause. So are unbelievably bloated star salaries (Schwarzenegger was paid $30 million for Terminator 3.)
Actually, the theatres get very little from the profits of a movie (5-15%, depending on how many weeks it has been playing; the theatres make their money from concessions). It is the distributor of the film that gets the largest portion of the net profits, which, depending on the deal can range anywhere from 10 to 50 percent. (Cite)
In regards to the OP, I read/heard somewhere (DVD commentary, I think) that CGI is in fact getting a lot cheaper. So I don’t know where all that extra money is going.
A (very) rough rule of thumb is that a movie needs to gross twice its budget before it makes a profit for the studio. There are other sources of income, like the video release, games, product tie ins, and the like, but they are small potatoes compared to the ticket fees.
A big-budget movie that does well is the proverbial cash cow. One that sinks can take the studio with it (Just ask United Artists about Heaven’s Gate).
DD
The version I’ve heard is two and a half times the budget.
Yeah, I had a roommate who had managed a theater, and he said that the studios really put the screws to the theater chains when they know they have a big hit on their hands.
What are you going to do, Mr. Theater Chain Owner? Are you going to NOT carry MegaHit Action 2? I think not. You’ll take a very small percentage of the opening week, a slightly bigger one for the next week, and like it. You’ll live off that and the snaking concession lines.
I’ve been trying to find some figures on CGI costs, but couldn’t quickly find anything clear. I did read somewhere that CGI costs are dropping, though.
My take on cost per image was a bit unfair; I would imagine that it costs indeed thousands of dollars to produce the first image, but the next few images are essentially free since they are produced with the same constraints and elements. (if every image would really cost $100.000 and you’d need say 30 images per second, you could only produce 33 seconds of CGI for $100.000.000. So average cost must be much less for CGI-intensive movies).
Furthermore it would depend very much on the kind of CGI. Is it a full CGI image, or is it mixed (Stuart Little), or even based on an actual image/person (Gollum in LOTR)?
Mind you, a full CGI image is probably the cheapest of the three options Tusculan mentioned. That’a because with full CGI you don’t have to deal with the problems of blending real footage with the CGI. With full CGI, you also don’t have to deal with pesky problems like building physical sets or waiting for the sun to come out from behind the clouds. Thus Finding Nemo, which is 100% CGI, had a comparatively modest budget of $94 million, while a live action/CG mix such as Pirates of the Caribbean had a budget of $125 million.
CG is pretty clearly cheaper than practical effects for many things - it would, for example, be practically impossible to do something like the army scenes in the Lord of the Rings movies using anything but CG.
Special effects budgets have escalated, however, because the average effects movie today has far, far more effects shots in it than the average effects movie of, say, the 1980s. Special effects are just used far more often now than they were in the pre-CG era.
Have you guys seen the credits crawl at the end of these big blockbuster cgi-heavy movies? There can be thousands of people working on a flick, some longer, other for shorter time. One of the reasons (in the US) is that so many are there because the union rules. You’re in trouble if you’re ‘Best Boy’ and touch some stuff that the ‘Key Grip’ is supposed to handle.
Trailers, drivers, caterers, carpenters, painters, hairdressers, personal assistants. It just adds up.
Another factor is that most major stars will negotiate a percentage of the gross (or net), depending on the clout that star has. This forces the studio to pur a lot of money into marketing, essentially flooding the market and making everyone go and see it. Word of mouth doesn’t work with these movies and we’re getting to the point where they open all over the world at the same time, essentially becuase so much media is international. If there is a song, making it to #1, that often moves a lot quicker than a movie. So if Madonna has a new video out for the Austin Powers movie, that’ll be on tv in a lot of countries, helping the studio with the marketing. It’d be stupid to release the movie 6 months or a year later, when the song is not getting airplay any more.
In short, these global, massive marketing campaigns are costing a bundle.
And of course, the studios are doing it on purpose. A major studio might greenlight 10-20 movies a year, not more. The reason being that it really doesn’t matter if you’re making T3 or Maid in Manhattan. The star get’s a big cut, the crew is bigger on a bigger movie, but not small for the more down to earth films. J. Lo got $15 million for that movie, so I guess the production cost was ~$30 million. That’s actually taking a bigger risk than doing T3. J.Lo is basically carrying the movie all by herself. If she had lost the audience between production and release, the studio might take a major hit.
So they play it safe. Better to pour the moneys into bigger projects and market the hell out of them, than putting out a lot of less expensive movies and taking risks.
Yes, but aren’t there entire companies that do just the opposite, thereby making a lot of money? I seem to have read (no cite) that B-movies and straight-to-video movies almost never lose money, simply because they’re cheap to make and the studio is almost guaranteed to at least get their money back.
Sure.
But if you’re head of Disney, WB, Universal or Fox, you want to hang out at Spago or the Viper Room (or wherever they go these days) and have starlets at your… ahem … feet. You want to be the envy of everyone.
You do not want to be Golan-Globus.