I’ll admit I’m not the most rabid movie viewer. I’ll see 2 or 3 in a theatre, and buy or rent a couple more.
But I look at Netflix at the piles and piles of B rate movies and I just can’t fathom how anyone makes any kind of money at it. Can someone make Battle of Los Angeles and get enough people thinking it’s Battle: Los Angeles to make a profit, when the latter movie didn’t exactly bring in the dough either?
How many movies would you think were made each year in the US? (Bollywood and the rest of the world notwithstanding) it’s easily in the hundreds.
I never saw word one about this film…it only shows up in Netflix because I’m not logged in under my account (which is heavily weighted towards my kids), but 92 THOUSAND people saw this and thought enough to rate it?
I can’t answer your question about economics but a lot of films only play in art house theaters in bigger cities. I saw 357 movies in the theater last year and only a fraction of the “new releases” (as opposed to classics, restorations, re-releases, etc.) were at multiplexes. Most of them were never released to a wider audience. It’s a damned shame too.
I’ve never heard of the one you mentioned but I wish I had, what a cast! I especially love Ray Winstone.
Not all, of course, but the majority. I don’t go see movies I think I’ll hate, unless they get good reviews, and sometimes I’m surprised. The majority had something to offer me: stories I liked, locations I’ll never be able to visit, directors and actors I already liked or newly discovered.
Tonight was the last night of the annual European Union Film Festival at the Gene Siskel Film Center. I saw 51 EUFF films in 30 days. I loved many. I liked most. I hated a few. It’s my 3rd year attending and I’m so glad I discovered it. Most, if not all, of the films will never open anywhere in the US. Some will, but will only play art houses. Some, like Unfinished Song (with Vanessa Redgrave and Terrence Stamp), Death of a Superhero, and tonight’s film, The Angel’s Share by Ken Loach, would have the potential to become crossover hits, but they’ll never get that chance. It’s sad to me.
If you’d like to read a good exposition of current filmmaking economics, you might want to read The Hollywood Economist by Edward Jay Epstein.
There were 698 films released in the domestic market (which mean the U.S. and Canada) in 2012. This includes those made outside North America which got released in North America:
The economics of b-movies (really, z-movies) are about the same as spam. If your costs are really low, you only need a few suckers to respond.
There is a reliable segment of the population who will rent any mindless movie for funsies. How many? Well, 92,000 is about one household in a thousand. Plus any additional money that can be brought in through all the other revenue streams: DVD sales, cable showings, hotel channels, rentals from all other sites, foreign distribution, and the other stuff that those in the business know by heart.
And if you can get people who respond to spam then there are certainly enough people who hear Battle of Los Angeles and think Battle: Los Angeles to make a profit.
I’m no expert on the movie business. But my understanding is that making movies is a profitable business - for the people that make the movies. The studios essentially get paid to produce movies. For them, selling tickets and videos is just a bonus. Investors are the ones who pay the studios to make the movies. If the movie succeeds, the investors and the studio both make a profit but if the movie fails, only the investors suffer a loss. This means studios stay in business while investors come and go (and with the glamour of show business there are always new investors).
That’s pretty far off today. All the Hollywood studios you’ve heard of are tiny pieces of giant corporations. They can provide their own financing, although they often make deals with one another to lay off costs. And they look for revenues streams that are, in the old word, synergistic, so that their own cable channels or theme parks or record companies or whatever get a taste of the aftermarket.
It’s the independents who look for investors. Investors can fork over the million or seven for an art house film. They’re not putting up $300 million for a blockbuster. Once made, however, the independent studios look to sell the film to a major who can do the proper distribution and marketing and take a large share of the profits.
The z-grade houses that churn out the duplicate title films are a third entity. They may have investors, but mostly they run extremely lean, make movies in a few days, and get them into the rental stream. You can finance yourself out of profits if you can churn them out.
I saw a documentary about a soft core producer/director who was making a film in a three-day weekend. The actors stayed in one rented house that they used for filming, did their own makeup, wore their own clothes, and ate sandwiches. The crew was the director and a cameraman. Period. Two people. He hoped to cut a day or two off the process in the future. Who needs investors if movies like that sold to Cinemax and made back their cost in the first sale? Hey, I found the title: Popatopolis: How to Make a Movie in Three Days. Funny and insightful.
I’m talking about low-budget movies - not nine-figure blockbusters or zero-budget indies.
Let’s say I’ve got my script for Lincoln’s Doctor’s Dog and there are investors lined up to put ten million into making this movie. I go to Straight Dope Productions and they greenlight our project.
The investors form a LLC to make the movie: Rover Company. Rover Company, LLC has assets of ten million dollars and its purpose is to produce and sell the movie Lincoln’s Doctor’s Dog.
Now as I’m making my movie, Rover Company is spending its ten million dollars on various production costs. I’m paying for stuff like gaffers and electricians and key grips and camera work and sound work and editing - and the company that is providing Rover Company with this stuff is Straight Dope Productions.
So three months later when Lincoln’s Doctor’s Dog is finished, Rover Company has spent eight million dollars and not sold a single ticket. But Straight Dope Productions has already been paid four million dollars for the work it did for Rover Company.
Now I spend the remaining two million dollars Rover Company has marketing the movie. Maybe I sell it to a distribution company for thirty million dollars, which I split. The Rover Company investors get fifteen million and Straight Dope Productions get fifteen million. Everybody wins.
But suppose my movie fails big time and I end up dumping it for a hundred thousand in video rights. The Rover Company investors, who put in ten million dollars, only get back fifty thousand. Straight Dope Productions also only gets fifty thousand from the video sale - but they also got the four million they were paid for the production costs.
This shows how a studio can stay in business making movies that lose money.
The distinction between independents and studios is subtle these days because most of the well-known independent studios have been bought up and made part of the giants. I think I’m just objecting to your use of “studios” to describe the remaining independents; they are not studios in any way we normally think of the term. I don’t disagree with your description of that process, just that it describes a pretty small slice of the business.
You have to be pretty darn old to know about the phrase Lincoln’s Doctor’s Dog. And I’m a decade older than you. Thanks a lot for the reminder.
I read somewhere that revenue streams other than the domestic US box office are a big part of the business. I vaguely remember reading that the domestic US box office is (typically? on average?) only twenty percent of a movie’s revenues. Other revenue sources include foreign box office, broadcast television rights, pay cable/satellite rights, streaming revenues and revenues from broadcasts on airplanes. And then there are things like joint marketing agreements like when you see an add for Panasonic televisions featuring clips from a new action movie and product placement fees.
I think one of the Bond films in the past decade about as much in product placement fees as the production costs, although perhaps there is more product placement in a Bond film than others (and people seem to accept it more easily in the Bond films).
There are tons of small, independent films that barely get screened (if at all) at some small film festivals. These are productions that might have small budgets, but still cost the director/producer every cent they own and run up huge debt in the process. Those lose money big time. However, it might help them get another film, or help an actor get another role, so all is not necessarily lost in the long run.
Even large studios can suffer with a huge bomb.
Remember the film Cutthroat Island? Many think that single, very expensive bomb was the reason the entire production company, Carolco, went belly-up and folded. Nobody is totally immune to suffering the loss of revenue when a film bombs, and even with large studios, this will mean canceling other films in pre-production or severely cutting back on new film projects.
Yeah, there is money to be made from DVD or cable or whatever, but often nowhere near enough to compensate for the huge loss in box office revenue.
It should also be noted that the example in the OP, 44 Inch Chest is a British movie. The economics of foreign movies are often very different things, especially on the financing side.
This is a great example of the niches in movies these days. There are horror niches, teen age twerps niches, cheap scifi niches, but also indie quality niches. I’ve never seen Sexy Beast, but I’ve heard of it, and I think it is considered quite good. I can imagine a lot of fans of it seeing this movie also, hoping for a repeat of the experience, just like people read the second, third, and 26th book of detective series.
Every so often one of these breaks out and makes a lot of money, which I suppose makes it worth while. And lot of nothing is nothing compared to Oz the Great and Powerful, of course, just a lot compared to their budgets.
There have been periods where film-making was a deliberate taxshelter. Basically, a fun way to lose money that you could then deduct against other income.
While this is true, there are many low budget movies that really don’t take much revenue to turn a profit, especially if the distributor can spin it into a cult movie, or even play off the badness of the film. (See Megashark Vs. Giant Octopus and sequels for example of type.) This has been the case since at least the advent of “grindhouse” films, but with streaming video services virtually any professionally made film (trained actors, decent production) values can make a reasonable return if they control production costs no matter how crappy the plot. The same cannot be said for $100M+ blockbusters, so many of which fail to turn a profit it makes one wonder how the industry manages to stay afloat on only the occasional genuine success.
It’s from four decades ago but Max Baer Jr, best known as Jethro Bodine on the “Beverly Hillbillies”, made a fortune in the 1970s with cheaply made drive in films like “Macon County” and “Ode to Bilie Joe”. Something like $25 million in revenue against $110,000 in costs. You could make at least 200 other “Macon County"s that don’t earn a dime, and still come out ahead. And with a lot of tv channels, streaming services, they need product, whether it is a great film like “Battle Los Angeles”
or a putrid piece of garbage like 'Serenity”