Production budgets getting out of hand

[Hobbes829]

Apparently Terminator Salvation cost 200 million dollars to make. There is no reason why a film should cost that sans inflation. Is inflation really disproportionately affecting the movie industry relative to most others?

Movie budgets are getting out of hand. More and more of them are costing 100-200 million. The entire lord of the rings trilogy cost around that much and yet it felt like it was made for more.

I'm inclined to blame it on the unions and inflation. Hollywood has a union for everything from writers, to set builders to directors to actors.

[Mikintosh]

Apparently Terminator Salvation cost 200 million dollars to make. There is no reason why a film should cost that sans inflation. Is inflation really disproportionately affecting the movie industry relative to most others?

Movie budgets are getting out of hand. More and more of them are costing 100-200 million. The entire lord of the rings trilogy cost around that much and yet it felt like it was made for more.

I'm inclined to blame it on the unions and inflation. Hollywood has a union for everything from writers, to set builders to directors to actors.

That money doesn't go to pay set builders; it goes mostly to overpaid actors and unnecessary CGI.

[Michael24]

It does seem like they're growing more and more every year. I remember back in the '90s, hearing "low" budgets like $40 million for StarGate and $65 million for Saving Private Ryan (which looked like about twice that much!) Nowadays, these constant $100+ million budgets just blow my mind.

[Hobbes829]

That money doesn't go to pay set builders; it goes mostly to overpaid actors and unnecessary CGI.

Unless you have a government granted privilege, there's no such thing as overpaid in the long run. It's simple economics, if the price for labor exceeds productivity, then it's overpaid.

It's not like the demand for movies is going up every year, but the prices are soaring. Costs ARE going up for a reason and it's not because of JUST the actors. The producers wouldn't be offering actors big salaries unless they either earned that money by drawing at the box office and/or were being made to.

[Wonderwall]

One of my favorite examples of ridiculous waste of money is Spider Man 3. 250 million yet it didn't look that much better than the original which was made for just 140 million.

[Hobbes829]

One of my favorite examples of ridiculous waste of money is Spider Man 3. 250 million yet it didn't look that much better than the original which was made for just 140 million.

the fact that we can say "just 140 million" is kinda rediculous". I'm fine with 200 million being spent, but if i can't tell the difference between 100 million and 200 million, something's wrong. It's not what's spent, it's what you get for what you spend.

[The Clown Prince]

Michael Bay had said in an interview with Comingsoon.net that Revenge of the Fallen was budgeted for $200 million. They came in at $195 million, and then turned around and put that $5 million right back into special effects.

But really, when Dreamworks/Paramount greenlit this, everyone knew that this will make that back and then some. I mean waaaay then some.

As for Terminator Salvation, I would say for this franchise it was a gamble. It won't make that number here in the states, but it will at the foreign box office. It's overseas box office is currently is $164.8 million. But Warner Bros. won't see that overseas money as they weren't the foreign distributor. Don't know why if they had looked at what Terminator 3 made overseas ($283 million).

[The Overlord]

Unless you have a government granted privilege, there's no such thing as overpaid in the long run. It's simple economics, if the price for labor exceeds productivity, then it's overpaid.

It's not like the demand for movies is going up every year, but the prices are soaring. Costs ARE going up for a reason and it's not because of JUST the actors. The producers wouldn't be offering actors big salaries unless they either earned that money by drawing at the box office and/or were being made to.

Its because of the special effects, not union for the donut guys. With CGI you pull off things that would impossible a few decades ago, but its expensive to do.

Often (not always) these movies look amazing, but its not going to be cheap to do it.

It has very little to do with unions and everything to do with special effects.

[Hobbes829]

Its because of the special effects, not union for the donut guys. With CGI you pull off things that would impossible a few decades ago, but its expensive to do.

Often (not always) these movies look amazing, but its not going to be cheap to do it.

It has very little to do with unions and everything to do with special effects.

is that thought based on anything other than conjecture?

unions raise wages above productivity.

Is the CGI getting anymore expensive? If so, why? Technology usually gets cheaper even in spite of increasing quality over time.

Look at the entire lord of the rings trilogy. It cost under 200 million to make 3 films, and the CGI holds up against even todays. It's not the CGI.

[Jacob T. Paschal]

The entire point of a union is the get it's members as much money as possible.


All these films are privately owned properties. If millionaires want to spend hundreds of millions on them, let them. No skin off our backs.

[Hobbes829]

The entire point of a union is the get it's members as much money as possible.

All these films are privately owned properties. If millionaires want to spend hundreds of millions on them, let them. No skin off our backs.

i'm not averse to people making as much money as possible but there's also the way you go about it. Employers wouldn't voluntarily prop up wages above productivity.

Given that dvds and other products haven't seen a rise in price for the most part, i'm guessing there's something particular about the film industry. Has the demand to see films gone up over the years? If not, then why are production costs rising?

[Jacob T. Paschal]

It's because spectacles cost money, and it's these same summer blockbusters that pull in the big dough. To make money, you've gotta spend money.

[Hobbes829]

It's because spectacles cost money, and it's these same summer blockbusters that pull in the big dough. To make money, you've gotta spend money.

but in real dollars are the producers making any more on their investments than they used to. I'm well aware that it takes money to make money, but by that logic all they have to do is spend.

[Shawn Hopkins]

No budget is too high if it makes a profit. If they have to spend $200 million to have a $700 million worldwide blockbuster, then they're going to do it. Bigger budgets mean bigger risks, but they can also mean bigger rewards.

[Hobbes829]

No budget is too high if it makes a profit. If they have to spend $200 million to have a $1 billion worldwide blockbuster, then they're going to do it. Bigger budgets mean bigger risks, but they can also mean bigger rewards.

i'm well aware of that. However, on average are they getting greater return on those investments or the same, or less? How come they didn't just spend this kind of money before now? Did they not understand that basic idea?

Also, with greater risk, more films would be losing money. Is the increase risk paying off?

In other words, why are they taking greater risk?

[Shawn Hopkins]

i'm well aware of that. However, on average are they getting greater return on those investments or the same, or less? How come they didn't just spend this kind of money before now? Did they not understand that basic idea?

Also, with greater risk, more films would be losing money. Is the increase risk paying off?

In other words, why are they taking greater risk?

I dunno. Look at their financial statments if what you're really concerned about here is profit margins.

I will say they aren't crazy or stupid, though, so they must feel that that taking these greater risks will lead to greater rewards or they wouldn't be doing it.

Also, I think maybe it's to some extent that they're aware that they have to create bigger spectacles to get people into the theaters. People expect more and more out of their summer blockbusters. And, anyway, plenty of smaller-budget films are still getting made, not every director is as insane and excessive as Micheal Bay.

[Hobbes829]

I dunno. Look at their financial statments if what you're really concerned about here is profit margins.

I will say they aren't crazy or stupid, though, so they must feel that that taking these greater risks will lead to greater rewards or they wouldn't be doing it.

Also, I think maybe it's to some extent that they're aware that they have to create bigger spectacles to get people into the theaters. People expect more and more out of their summer blockbusters. And, anyway, plenty of smaller-budget films are still getting made, not every director is as insane and excessive as Micheal Bay.

but does bigger spectacle equal bigger budget in real terms?

Again, Lord of the rings cost less for each of its films than a lot of the big spectacles being made then, and it had as much, if not more spectacle than most films.

[Shawn Hopkins]

but does bigger spectacle equal bigger budget in real terms?

Yes. Of course it does. It always has, all the way back to Gone With the Wind. Lord of the Rings was cheaper because it was shot in New Zealand, you can't film every movie there.

Check this out. What they are doing is working. They're making more money than ever, despite the recession and rampant piracy.

http://arstechnica.com/media/news/20...ce-in-2008.ars

[Hobbes829]

Yes. Of course it does. It always has, all the way back to Gone With the Wind. Lord of the Rings was cheaper because it was shot in New Zealand, you can't film every movie there.

Check this out. What they are doing is working. They're making more money than ever, despite the recession and rampant piracy.

http://arstechnica.com/media/news/20...ce-in-2008.ars

There's a Hollywood reporter article that says the net profit increase was 2 percent. It's subscription only but here's a site that summarized it.

http://www.jaani.net/view/2009/01/06...ts_during_2008

what about NZ made it cheaper to shoot there? I know the answers but i'm seeing if you

There's a positive corrolation between film attendence and recessions.

profits rose because of the rise in ticket prices but actual attendence dropped. I'm willing to bet that even with ups and downs from year to year, the average attendence level doesn't change that drastically, however the average production costs do and so do ticket prices. They rise every year like clockwork. That's why i'm positing that it's most likely production costs increasing due to labor unions and inflation. I really wish there was a book on this like about the economics of the film industry.

My question to you is what is it about the film industry that despite bigger risks brought on by bigger budget that they are continuing to be profitable? The banking industry took on more risk (because of the federal reserve, not greed) and we saw what happened there.

[Shawn Hopkins]

what about NZ made it cheaper to shoot there? I know the answers but i'm seeing if you

There's a positive corrolation between film attendence and recessions.

profits rose because of the rise in ticket prices but actual attendence dropped. I'm willing to bet that even with ups and downs from year to year, the average attendence level doesn't change that drastically, however the average production costs do and so do ticket prices. They rise every year like clockwork. That's why i'm positing that it's most likely production costs increasing due to labor unions and inflation. I really wish there was a book on this like about the economics of the film industry.

Why don't you go do the research, read the financial statements of the major studios, and then come back and tell us your findings. This argument is getting tedious because no one has the evidence to debunk your claim that the problem is unions to your satisfaction and you don't have any evidence to support it.

Maybe it's not just inflation. I found a source that Gone With The Wind's budget was estimated at about $3.9 million. And I found an online inflation calculator at the US department of labor that says that would be about $60,000,000 today. Big money, but not Michael Bay money.

Then again, the budget for Cleopatra, adjusted for inflation, was about $295 million.