The Cost of Making Movies: Why Film is So Expensive

As I wrote in my guest post at Cogswell College’s blog, I had the privilege of hearing a Hollywood producer discuss the process of converting a story from book to screen at this year’s San Francisco Writer’s Conference. There’s quite the demand for adaptations, apparently. As our guest said at the panel, “Everyone is looking for a built-in audience.”
And so they are. While original screenplays accounted for over 50% of motion picture market share in the years 1995 through 2000, since then they have undergone a bumpy decline. In 2012, just under 40% of the market comprised films produced from original screenplays. (See for yourself at The Numbers.) A 10% decline may not seem like much, but a downward trend is apparent. Gross ticket sales paint grim picture: original movies sold over 500,000 tickets in 1995. In 2012, they sold less than 200,000.

According to the speaker at the conference, the high cost of production leads studios to play it safe. Motion pictures are expensive, and when you are risking millions of dollars on an investment, you want to have some assurance that you will recoup it. Adaptations, sequels, re-boots and remakes allow Hollywood to milk established markets.
But what makes film so expensive? Digital production techniques should reduce the cost of making movies, and digital projection the cost of distributing them, should they not? For that matter, if companies such as Rhythm & Hues are declaring bankruptcy because they cannot ask for the fees they need to pay their employees, producers must be getting some really nice deals on their films, right?
That depends upon your definition of a “nice deal,” though. Let’s start with the core of a movie: the screenplay. According to the 2008 Writer’s Guild of America (West) Basic Minimum Agreement, the producer of a low-budget feature can expect to pay $34,251 for a screenplay at 2011 rates. Add in some rewrites (as one would), and the price goes up to over $50,000. A writer for a high-budget film can expect $70,000 for a screenplay, minimum.
The situation does not improve when we get to actors. The 2013 minimum rate for actors is about $859 per day, assuming a regular budget. For how many days do you need to hire an actor? That depends. However, fiction is typically shot at a 15:1 shooting ratio. That is to say: for every minute of completed film, you need to shoot fifteen minutes of raw footage. Assuming a two-hour film, you will likely have to shoot thirty hours of stock.
But that thirty hours only accounts for the parts captured on film. You need to account for set-up, make-up, breaks, switching camera angles, practical effects, set repairs, and so forth. The project may involve rehearsals, training the actors on new skills and reshoots. Thirty hours of work might not even add up to five business days, but shooting thirty hours of footage does not take five business days. It takes much, much longer.
Add in the salaries of the director, director of photography, grips, lights, boom operators, and production assistants, production designers, make-up artists, and the rest of the endless list of people who contribute to a motion picture, and you easily run into the hundreds of thousands of dollars.
Of course, cinema’s silverback gorillas—summer blockbusters—run into the hundreds of millions. This post on the website Anomalous Materialprovides a sample break-down of the Spider-Man 2 production budget, whose total production costs amounted to about $200 million. However, as the article mentions, that figure doubles when one accounts for marketing and promotion.
But still, our question remains unanswered. We have reason to believe that the cost of production should be somewhat less on account of new technology. Is it necessarily the case that producing any given film in 2013 is more expensive than producing the same film in 1995? If it is more expensive, then why is that the case? If it is not, then why are the big studios getting such cold feet regarding new material?
Perhaps a different perspective will aid us. When you think about it, the medium defines the industry. And for film, the medium isn’t just the move, it’s the movies. The cinema defines film. A movie is not just a work of art. No one in movies calls them works, unless they’re critics. They call them events, experiences, adventures, and they make damn sure to put those words in their trailers and marketing copy. The cinema is about spectacle. The cinema is about magic. The cinema is about celebrity. The cinema is about showmanship. That’s why they call it showbiz.
Cinema is predisposed towards ‘big.’ But the digital technologies which would reduce the cost of filmmaking don’t help ‘big’ so much. People often forget the cost of labor when thinking about film or animation. The line items I mentioned above were for people involved in making a film. These people are still necessary even if the technology for making films improves, and they will still be in demand. Hollywood is about personality, and Johnny Depp’s personality doesn’t become less valuable just because his image is printed on cheaper stock.
So while improvements in technology may benefit the big studios, they benefit the smaller producers, who don’t have access to the ‘big’ personalities, more. And the cinema, as a ‘big’ venue, does not suit their needs. They prefer the digital world, where it is easier to distribute and promote your work. They debut on Netflix, they make money on iTunes or through YouTube ads, and many of them, I suspect, decide to make short-format web series instead. The evaporation of independent filmmaking which the producer at SFWC mentioned could just as easily be independents evacuating Hollywood, instead of Hollywood expelling them.
Likewise, viewers these days prefer ‘personal’ to ‘big’ in increasing numbers. We watch our television online or on-demand. We watch our movies on Netflix, or on our computers through iTunes or Amazon. If we really like a film, we might buy a DVD or Blu-Ray. Going to the theater is for a Friday out with friends for a film that looks really satisfying, probably in a visceral way.
Hollywood does not like people watching big movies on small screens. Hollywood wants the huge turn-outs on opening night. They wantpeople to come for the event and gaze, starry-eyed, at the spectacle. According to tradition, this is how you make your money in movies. So when technology lets people do ‘personal,’ and audiences decide they like that, Hollywood reacts as Hollywood is bound to react: they go bigger.
The so-called “tent-pole” films, the mainstays of summer, have served as Hollywood’s insurance for years. Every major studio develops a portfolio of movies, with the successes absorbing the losses from the failures. Summer blockbusters often fill this role. They are guaranteed cash. When Hollywood faces leaner times, its first instinct is to focus on the tent-poles. That means bigger budgets, and taking fewer risks.
This strategy, I believe, serves to hasten the shrinkage of the mainstream movie industry, not abate it. Especially as ticket prices have increased along with the budgets of movies, people have more incentive to tighten their belts and just wait for it to come out on DVD or Netflix. So fewer people go to the movies, and Hollywood makes their movies even bigger, and theatres increase their prices, and even fewer people go to the movies… and so on.
Film is changing. I do not believe it is dying, but it is becoming something else. And when the dust settles, I expect to find new players rising to dominance, balanced against the remains of the old studio system.


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