Why are American films more expensive than many foreign ones?

[athelas]

(Flipped a coin between GQ and CS, and decided on CS.)

In America, films regularly cost in the tens of millions of dollars to produce, while the big-budget ones regularly exceed $100M. Now, I only have a few data points for foreign films, but it seems that the price is much lower overseas. Night Watch and Day Watch two Russian vampire/fantasy movies, were shot at about $4M apiece, and the latter in particular looks comparable to a middlebudget Hollywood production. Hero, although sporting a very different aesthetic than most American films, still has many of the expensive features of big-budget affairs - large, ornate sets, choreographed fight scenes, and hundreds of extras. It cost $30M.

What is the source of this disparity, and more broadly, how is all that money spent?

[Max_Torque]

The amounts quoted for most blockbuster productions are, shall we say, not exactly “the studio put down this much cold hard cash” figures. Slate has published a number of articles by the author of The Big Picture: The New Logic of Money and Power in Hollywood, Edward Jay Epstein, that explain some of the creative accounting tricks that go on in movie production. One such article is this one, How to Finance a Hollywood Blockbuster, which explains a bit about how, paradoxically, making an “expensive” movie is cheaper for the studio.

The short answer for why foreign movies are cheaper than movies that are “made in America” with similar features is, basically, that America is expensive, that we’ve been doing movies here a long time and as a result have a very mature filmmaking industry that believes it should be paid well, and because foreign nations that want a piece of the action often seek to encourage their own film industries by offering generous tax breaks and other favorable gestures to domestic film production.

[Zebra]

It can be hard to get an apples to apples comparison as we don’t know exactly what the major hollywood studios actually spend on producing their movies. They sometimes inflate those numbers, just for publicity’s sake. Also, we don’t know what counts as ‘production costs’ in the other countries.

Part of it is that labor in some countries is much cheeper. “Hundreds of extras” is much easier to do in some countries than others as are carpenters, electrictians and catering.

Do these films in other countries have stars that cost $20 million dollars plus the assorted perks that are required? (limo service, extra hugh trailer, personal chef, etc. etc.)

The movie business, in the US is huge, so larger up front investments make sense to US producers as it is possible to make that money back and more.

[Little_Nemo]

Another factor may be that while small-budget films get made all over the world (including in the United States) making big-budget films is a specialized industry which happens to be centralized in Los Angeles.

[beowulff]

Hollywood also loves special effects, and they are much more expensive than just filming a couple of actors sitting at a café.

[Green_Bean]

I imagine that the fact that so many of the people involved in making an American movie are unionized has some effect on the cost as well.

A question–does an American movie take a longer or shorter time to film than a comparable foreign one? 'Cause each additional day of filming is expensive! I know it’s really hard to make a good comparison here…but imagine an ordinary romantic comedy with no special effects. Will the American one typically require a more or fewer days of filming? And if there is a difference, why?

[Arnold_Winkelried]

@Green Bean

I imagine that the fact that so many of the people involved in making an American movie are unionized has some effect on the cost as well.

I’m not an expert on the subject, but I would guess that the difference in salaries for carpenters, make-up artists etc. in Los Angeles (USA) vs. Vancouver (Canada) are not what really cause the huge budgets in the USA. It’s more the difference in the huge salaries given to the “big names”, and the amount of money spent on special effects (computer graphics added , amount of material destroyed, etc.)

Here’s a Los Angeles Times article on the making of “Rush Hour 3”:
Brett Ratner: Traffic cop / After six years of major detours, the director brings ‘Rush Hour 3’ to the screen.
By John Horn, Los Angeles Times Staff Writer / August 7, 2007

As [the director Brett] Ratner and the film’s producers would come to learn, wanting a sequel and actually lining up the key players were two dramatically different games. Thanks in part to the success of the first two films, the salaries of all of the key creative people had skyrocketed. Not counting any gross profit deals, [actor Chris] Tucker’s new price tag was $25 million, [actor Jackie] Chan’s $15 million, Ratner’s $7.5 million and screenwriter Jeff Nathanson’s $3 million. That’s more than $50 million out the door before a foot of film passed through a camera.
…
(Originally budgeted at $133 million, the film ended up costing a little more than $140 million)

[guizot]

@Arnold Winkelried

I’m not an expert on the subject, but I would guess that the difference in salaries for carpenters, make-up artists etc. in Los Angeles (USA) vs. Vancouver (Canada) are not what really cause the huge budgets in the USA. It’s more the difference in the huge salaries given to the “big names”, and the amount of money spent on special effects (computer graphics added , amount of material destroyed, etc.)

Here’s a Los Angeles Times article on the making of “Rush Hour 3”:
Brett Ratner: Traffic cop / After six years of major detours, the director brings ‘Rush Hour 3’ to the screen.
By John Horn, Los Angeles Times Staff Writer / August 7, 2007

I think that’s it. Hollywood banks on name value and they often have to pay a lot for it. Also, if they have to film in the States, they often pay a lot more for the crew.

[SmackFu]

Russians will watch American blockbusters, while Americans won’t watch Russian blockbusters.

[Shalmanese]

Because America can and no other country can. Like SmackFu said, American films get worldwide distribution and can drive off a well oiled publicity machine which ensures they will recoup their budget. No other country has the eco system that can pull that off.

America makes films at all different budget levels and it’s domestic art house films compare quite well to foreign art house films. It’s just no other country is in the business of regularly producing “blockbuster” films like America is.