- DOMESTIC: Avatar – $760,507,625
- ADJUSTED FOR INFLATION: Gone with the Wind – $1,687,072,627
- WORLDWIDE: Avatar – $2,782,275,172
- RATED R: Passion of the Christ – $370,782,930
- RATED PG-13: Avatar – $760,507,625
- RATED PG: The Phantom Menace – $474,544,677
- RATED G: Lion King – $422,783,777
- RATED NC-17: Showgirls – $20,350,754
Avatar: Hollywood’s Manhattan Project
- Criticism of plot
- Impact on movie industry
Before Avatar. Star Wars.
- Young people were the driving force behind Star Wars’ huge success in 1977
- The first five Star Wars movies generated $9 billion in merchandising
- That was far above the world box-office revenues of $3.4 billion
Star Wars marked Hollywood’s new approach. Key elements included:
- merchandising tie-ins
- high potential for international distribution
- new technologies (digital animation, special effects, computer-based film-editing).
What turns a movie into a blockbuster?
Keys to success include:
- Star power
- Quality of the film
- Buzz factor
- Talent of the director
And America has known plenty of talented directors. A new wave of these directors connected particularly well with the post-war Baby Boom generation
- Francis Ford Coppola (The Godfather)
- Brian De Palma (Carrie)
- William Friedkin (The Exorcist)
- George Lucas (Star Wars)
- Martin Scorsese (Taxi Driver; Raging Bull)
- Steven Spielberg (Jaws; Raiders of the Lost Arc)
Source of photo: Hollywood.com
Megahits of the 1970s
- Star Wars (1977)
- Jaws (1975)
- The Exorcist (1973)
- Rocky (1976)
- The Godfather (1972)
Star Wars and Jaws were the first to gross more than $100 million at the box office
The biggest players in Hollywood
- Warner Brothers
- Twentieth Century Fox
- Columbia Pictures
Except for Disney, all six major American studios are owned by a large parent conglomerate. The six account for more than 90 percent of the revenue generated by commercial films. They also control more than half the movie market in Asia and Europe.
Despite the major studios’ money and clout, some independent films have been successful.
- Sex, Lies and Videotape (1989)
- El Mariachi (1993)
- The Full Monty (1997)
- The Blair Witch Project (1999)
- Hustle & Flow (2005)
Most successful independent film in history?
The Passion of the Christ. Hollywood rejected the movie. Studios said it would appeal to only a small Christian niche audience. It became a blockbuster in 2004, earning more than $370 million in domestic box-office revenues
Still, traditional blockbusters dominate Hollywood
Making movies is expensive and risky
Movie costs have soared. The average movie costs $4.2 million to distribute and nearly $35 million just to advertise
Anatomy of Gone in 60 Seconds
Disney said it had global box-office revenue of $242 million. So it was a success, right? Let’s take a look at costs:
- The theaters’ share: $139.8 million
- Prints, insurance, taxes, customs clearance: More than $20 million.
- Advertising: More than $70 million.
- Residual fees: $12.6 million in residual fees.
- Overhead: $17.2 million.
- Debt service: $41.8 million for debt service.
Total costs: More than $301.4 million. Revenue was $242 million. So, on paper, it appears that the movie lost $59.4 million.
How did Disney make up for that? It sold the rights to the intellectual property that it created. That allowed Disney to make money from video sales; a deal with HBO; a deal with TNT; and local TV stations and foreign TV markets.
Movies don’t have to be good to make money
- Hit-or-miss dynamic
- Some movies disappear from the theaters even if they debut at No. 1
- Why? Bad reviews, word-of-mouth
Winner takes all: 544 titles screened in 2005, but only a few dominated. It’s like shooting craps in Vegas, according to Arthur De Vany, author of “Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry”
Hit movies help pay for the rest
- The top 10 movies accounted for 26 percent of the box office in 2005
- Star Wars: Revenge of the Sith captured 4.5 percent of the box-office gross
- Only a select few movies have mass appeal
- Statistics may show that the average studio movie in 2005 earned $37 million, but this is almost entirely due to a few hit movies.
Studios don’t know how well movies are going to do, De Vany wrote. As screenwriter William Goldman said in 1983, “Nobody knows anything.”
All Time Top Stars at the Box Office, according to Mojo Box Office
Actor: Total gross (in millions) – number of movies
- Tom Hanks: $4,262.4 – 42
- Morgan Freeman: $3,916.6 – 52
- Harrison Ford: $3,850.9 – 38
- Eddie Murphy: $3,810.4 – 38
- Samuel L. Jackson: $3,714.3 – 61
- Tom Cruise: $3,292.0 – 34
- Bruce Willis: $3,172.6 – 57
- Robin Williams: $3,165.1 – 46
- Johnny Depp: $3,070.3 – 40
- Robert Downey, Jr.: $3,001.7 – 49
Global ticket price average: It takes just under 57 minutes for the average American to earn enough to buy a movie ticket in the U.S.
- Better off in India: 16.6 minutes (tickets cost just 19 cents)
- China: 25.7 minutes
- Just be glad you don’t live in Tokyo. Tickets are 1,800 yen ($16.78 U.S.)
Why theaters charge so much
- Studios demand a large share of the box office (50-50 splits are common, but deals vary widely with some theaters claiming the studios sometimes get 90 percent or more)
- Theaters are under pressure to increase profits
- As some see it: Movie theaters are more like restaurants that happen to show movies
Role of movie theaters today
…the movie theater has become a launching platform, a place where (studios) try to establish their movie so it is engrained in the public mind, so that the audience wants to see the movie on cable, DVD, video and pay-per-view
– Edward Jay Epstein, author of The Big Picture
Tail wagging the Dog
- Hollywood studios only make 13 percent or 14 percent of their profits from movie ticket sales
- The rest of the studios revenue comes from other sources, including DVDs, merchandise and licensing
The economics of Hollywood
The economic model of the film business is broken”
– Oscar-winning director Steven Soderbergh
Movie making expenses are rising
- A-list stars routinely demand compensation packages of $25 million
- The cost of shooting and editing films is up
- Illegal downloads are cutting into profits
Don’t feel too sorry for Hollywood
- Movie studios stand to earn big money from consumers who will pay to download movies from their libraries
- The issue: how to make money on downloads without hurting movie ticket sales and DVD sales
From Big Screen to smaller (TV) screen to portable screen
Box Office Bombs
Xyzzyx Road (Xyzzyx rhymes with Issac’s)
• Produced in 2006. Opened in only one theater. Highland Village Park Theater in Dallas, Texas.
• Producers rented theater for $1,000
• Movie ran for six days. Only six people went to see it. They paid $5 each. But the director refunded $10 to a make-up artist and her friend. So the total domestic gross was only $20!
• The movie’s budget was reported to be at least $1.2 million. So it lost 99.9985 percent of its production costs.
• Xyxxyx was released internationally – in 23 countries – and did much better, earning $368,000 by the end of 2006. But it was a huge domestic bomb.
• Plot: A bunch of tellers rob a bank.
• Woody Harrelson, Alicia Silverstone couldn’t save it.
• The movie had riveting dialogue. A sample:
“I eat cheese.”
“I know you do. I’ve seen you.”
• Budget: $7 million
• Domestic gross: $8,000.
• It earned just .11 percent of its production cost.
My Big Fat Independent Movie
• Released in 2005
• A spoof on independent movies. Film critic Chris Gore directed and co-wrote the movie. It was a bomb. It backfired and instead of making people laugh, it offended people. Its opening scene: A stereotypical looking African American rapes a white mentally disabled man.
• The Sundance film festival rejected the movie. Some die-hard independent film fans considered it to be blasphemous.
• $3 million budget
• domestic gross: $4,655
• .16 percent
D-Tox, 2002 (known as Eye See You on its DVD release)
• Sylvester Stallone is FBI agent Jake Malloy. He becomes deeply depressed after a killer brutally murders Malloy’s fiancée and his friend. His FBI supervisor tells him to check in to a police rehab clinic in the Wyoming mountains. A blizzard hits and Malloy can’t leave the clinic. By then, he finds out that the killer is disguised as one of the patients in the clinic, and naturally the killer begins knocking off patients one by one.
• Universal Studios released the movie three years after it was completed. It sat around because the studio didn’t know what to do with the movie, a 10-ton turkey.
• $55 million budget
• domestic gross: $79,161
• .14 percent of budget
What is a bomb?
• Two ways to measure whether a movie is a bomb
1 – Production costs versus profits
2 – Total losses
Some movies are flops domestically, but make money through DVD sales.
Impact of a bomb on movie studios
• In extreme cases, a bomb can push a movie studio into financial ruin
United Artists – Heaven’s Gate
Carolco Pictures – Cutthroat Island
Flops can’t bankrupt a studio, but they don’t necessarily destroy an actor’s career
• Waterworld had a $175 million budget and a spectacular aquatic film set, but it barely broke even
• Kevin Costner followed up in 1997 with The Postman, which also struggled. But Costner survived
Another bomb: Town and Country, 2001
• A romantic comedy.
• Warren Beatty is a New York City architect.
• Also stars Garry Shandling.
• Went into production without a script.
• Multiple rewrites.
• Director Peter Chelsom shot 1.3 million feet of film.
• Release date bumped 13 times.
• What critics wondered: How can you spend $95 million on a romantic comedy? There are no explosions or special effects.
Pluto Nash, 2002
• Pluto Nash is a retired smuggler and owner of a lunar nightclub in the year 2080. He investigates an arson fire that destroyed his club.
• Estimated budget of $100 million, including a marketing budget of $20 million
• Worldwide box office receipts of about $7 million
• DVD rental revenues: $25 million
• It still lost money
Eddie Murphy told Barbara Walters: “I know two or three people that liked this movie.”
Cuttthroat Island, 1995
• Budget of around $100 million. Domestic box office gross of only $10 million. Drove Carolco Pictures into bankruptcy.
• Listed as biggest box office flop of all time in Guinness Book of World Records (which movie is the biggest flop is disputed. It depends on how you measure it)
• Movie starred Geena Davis. She and her slave go on a quest to recover pieces of a treasure map.
• Many other actors turned down offers to play the lead role in the movie. Michael Douglas refused a $15 million offer. Keanu Reeves was busy playing Hamlet. Others refusing the role include: Tom Cruise, Daniel Day Lewis, Jeff Bridges, Michael Keaton, Charlie Sheen, Liam Neeson and Tim Robbins. Finally, Carolco gave Matthew Modine to play opposite of Geena Davis.
• Signs of waste during the movie: As filming wrapped up, the crew discovered a truck full of V8 juice. Davis and director Renny Harlin were fans of V8.
There have been many other Hollywood bombs. Among them:
• A Sound of Thunder
• The Alamo
• The 13th Warrior
• Osmosis Jones
• Heaven’s Gate
• Howard the Duck
• Hudson Hawk