Niagara Gazette

Night & Day

July 30, 2013

CALLERI: Box office misery has studios on edge

(Continued)

Niagara Gazette — These costly features are known as tent pole movies, meaning, in effect, that they create a protective tent, a financial covering for everything the studio releases for much of the rest of the summer and, in some cases, for much of the rest of the year. Studio bosses ask this question: Would you rather spend $200-million on one movie that brings in upwards of a billion dollars worldwide, or would you rather spread the budget money around; therefore, making smaller films that might not attract the attention of the target audience: young adult males?

Hollywood has been mired in a tent pole mentality for quite some time, and it looks as if this strategy is weakening. Studios try to keep the mega-budgets a secret, but there are always employees willing to leak that information to the press. In addition to the actual production cost of a film, there’s also a 30-40 percent add-on for publicity and promotion. A $100-million movie could cost a studio as much as $140-million before it opens in the United States. Even if a film grosses its production and promotion budget, approximately half of that take goes to the theaters. So, to be precise, a $140-million movie has to score $210-million just to break even.

It was reported that director Steven Spielberg recently issued a warning about the reliance on movies that costs hundreds of millions of dollars, especially in a world saturated with myriad digital entertainment choices that would have stunned the studio executives who built the Hollywood machine. At a media event in June at the USC School of Cinematic Arts, Spielberg said, “there’s going to be an implosion where three or four or maybe even a half-dozen mega-budget movies are going to go crashing into the ground, and that’s going to change the paradigm.”

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