Serenity did okay on DVD. The fact is that most big-profit movies earn more in the box office than they get in DVD sales - if DVD sales outweigh ticket sales, it’s usually perceived as a failure in theatres rather than a success in the video stores.
People like Kevin Smith, Woody Allen, Spike Lee, and Jim Jarmusch can get by on DVD sales. They make low-budget movies that can turn a profit with only $20,000,000 in DVD sales. But once you get into budgets of forty million dollars and up, you need box office sales to get it back and convince the studio to invest in your next movie.
I don’t see how this makes sense: if a movie makes profit in DVD sales, why does it matter whether the budget was wee or huge? All you want is for the sales to be bigger than the budget. And from my understanding, Serenity succeeded on this count.
I have no illusions about Whedon’s bankability; he’s a risky venture for a network concerned about the bottom line. But from my understanding, Serenity was a risk that paid off.
You have to consider it on a per dollar viewpoint, not a per movie viewpoint. The same money that’s spent on a sixty million dollar movie can be spent making three seperate twenty million dollar movies. If the single movie makes a twenty million dollar profit and the three movies each make a ten million dollar profit, you’re better off making the small movies, even though the sixty million dollar movie was the biggest individual profit maker.
And that’s what the studios are looking at, only with hundreds of different movies going on at once. The money you invest in one movie isn’t available to invest in another movie. Serenity made a profit but they figure that they could have made a bigger profit if they had invested the same money on a different movie.
A seven episode commitment means they have enough faith (no pun intended) in the show to order seven episodes up front instead of insisting on a pilot and deciding from there. It’s a good sign that they are going to give it a chance. Of course it means nothing if there are no ratings.
Serenity is turning out to be making a pretty good profit - the sales of the new collector’s edition surprised the studio.
Any movie which makes a profit is a success, considering that most of them do not. Take the current spate of anti-war films out this fall - every single one of them is a total box office trainwreck, despite being populated with huge stars and A-list directors and big marketing campaigns and huge budgets.
A movie like Serenity is actually a low-risk venture, because it has a built-in audience. Keep the budget under 50 million, and you know that the downside is very limited. If it doesn’t make money, the fan base will at least keep it near breakeven, and there is always the chance that it will be a breakout hit and make a gazillion dollars. And movies like this always have the possibility of developing into a franchise like Star Trek or Star Wars and earn billions.
But when you spent $200 million on a big-budget movie about Pearl Harbor or Iraq or Queen Elizabeth, you run the risk that no one will see it and it will be a financial disaster of studio-wrecking proportions.
There’s enough management turnover in the studios and production companies that a long-term-profitable movie may or may not reflect on the people who made the decisions about it who may or may not still be in the same decision-making capacities. The Princess Bride, to name just one example, was a flop in the short term, but a major moneymaker in the long term. The studio people who made the decision didn’t last in the short term; the people who succeeded them in the long term obviously can’t take credit for approving it. So while the film may objectively be a financial success on the books of the organization that owns it, this winds up making approximately zero difference in the careers of anybody involved.
That’s part of the financial tension in the movie business. The conglomerates want to stay in the black, quarter after quarter, and the bean-counters get nervous about the Hollywood business model where the profit from a film doesn’t start showing up until 18-24 months after the initial “go” decision is made and the completed movie finally comes out. That’s a major driver behind the current writer’s-strike roadblock issue of DVD profits: parent-company management sees DVD as a long-term steady profit center that can serve as insulation against the volatile up-and-down nature of theatrical exhibition. On the other hand, the actual studio executives and middle management who make the day-to-day decisions on which films get made, and how, want to compress the profitability timeline as much as possible, because it does them and their careers no good at all if a movie they greenlight earns its way into the black a year after they’ve been thrown out of their office for some other financial sin. That’s a driver for the ongoing rush to ever-faster home-video release following the theatrical run.
Serenity may or may not get a sequel due to its home-video earnings. But just because it turned out to be profitable, even very profitable, over the long haul, doesn’t guarantee anything. The situation is much more complicated than simple dollars and cents.
This consideration, incidentally, is part of the picture regarding Whedon’s return to Fox, after having gotten ass-raped on Firefly. Basically, three short years later, the network decision-making body is populated with a whole new set of faces. Even Tim Minear is back on board, despite his very recent terrible experience on Drive.
In the entertainment industry, there’s money, and there’s ego, and either factor may be more significant at any moment.
No–you need to consider it on a percentage of return viewpoint, not on a per dollar viewpoint. The numbers you picked are kinda cherrypicked: instead of using those, imagine a scenario in which the $60 million movie makes a 33% profit of $20 million, whereas each of the $20 million movies makes a 30% profit of $6 million. If those profits are net profits that really consider all costs, the studio is better off making the larger movie than the three smaller movies. Your example compared three movies each making 50% profit to a single movie making 33% profit–of COURSE in that hypothetical the smaller movies win, but that’s not the point.
Sam’s post about shortsighted execs makes a lot of sense, though.
Making a profit isn’t good enough - it has to make more profit than in you stuck the money in a T-bill or something. (or, in Germany, if the movie was UNprofitable enough to reap tax benefits)
Going back to the “7 episode comiitment” so the agreed to “order” 7 episodes. But will 7 episodes be produced? aired? Guess we’ll see.
And while I agree that Fox has aired risky shows (and given some extra chances to suceed), it has also aired them at bad times, preempted them several weeks in a row, etc.
My hypothetical figures reflected the fact that virtually any movie will make some money - even a complete piece of crap will get sold to Blockbuster to fill their shelves. So there is a bottom floor on video sales. As long as you can budget production costs lower than this minimum, you’re guaranteed a profit.
I set my three hypothetical cheap movies at ten million in sales to reflect this - virtually any movie will make ten million. Then to be fair, I doubled the profits for my hypothetical mid-budget movie. So if anything, my example was biased in favor of the sixty million dollar movie.
As an aside, there’s an upper limit to movie profits also. You can have the most popular movie ever but you’re only going to sell so many copies. People might buy a ticket to see a movie a dozen times but nobody’s going to buy more than one DVD just because they love a movie (not counting new editions). The exception is video stores but they’re actually working against you - the DVDs sold to video stores get rented out and cannibalize private sales.
There’s one other factor that hasn’t been mentioned - time is money. Ticket sales obviously come in earlier than DVD sales. Let’s say the movie gets released in theatres in July and on DVD in December and earns fifty million each from both releases. The fifty million you got in July will be re-invested in a new movie which might be making selling more tickets by December. The DVD fifty million just fell an entire movie behind in earning potential. Box office money has the advantage of quicker turn-around.
I’m sorry, but your math looks completely wonky to me, for a variety of reasons. For starters, you seem to be confusing gross with net. A movie that grosses $10 million, but costs $20 million, is not a success. And it’s not at all true that any movie will net ten million.
This is an interesting point; you can set against it the fact that there are a limited number of evenings on which people may go to see movies. A studio would prefer not to have its own movies competing against one another, I’d think: a single large movie that can monopolize screens is better than a bunch of small movies. If repeat ticket sales weren’t such a big deal, that might not be true.