The numbers of drama

by wonderfullyrich on February 22, 2009

I’m wacked out on over the counter drugs and prescriptions for yet another sinus infection that’s been lingering for the last 2 weeks. I’m home this weekend, trying to take it easy, listening to my heart beat, trying to distract myself from the pain in my head. What does one do during such a time? Watch a movie of course.

If any of you have watch a movie with me, they you know, although I try and retrain myself, I’m a rather annoying person to take to the movies. Unless it’s a top 1% movie, I’ll most likely not get lost in the suspension of disbelief… No I’m one of those who knows to much about movie making to just watch it, camera angles, plots, dialogue, production, etc. To me it’s a blessing as I think it enriches my movie going experience, for those movies that are able to suspend my disbelief and grab my total attention I’m all the more stunned by their beauty.

Today though, as I watched another movie on my computer, I couldn’t help but pause it occasionally and look up various things. Today it was the budget, which lead me to find the US gross and Worldwide gross of nearly 3000 movies. The revelation was one that we all sort understand, but which the magnitude was hard to comprehend. I’m going to list a few statistics for general reference.

Of the 2933 movies listed at The-Numbers.com , some 53 are yet to be released or the take is unknown.
Of the 2880 left some 980 likely lost money which leaves 1899 that broke even or went blockbuster.
Here’s where it get’s interesting. Some 992 of these movies double their money or more, of these 221 had a 10 to 1 return on investment. And with the highest grossing film of all time (Titanic) being at 1.8 billion dollars, we are talking about huge amounts of money.

As I consider this spreadsheet full of numbers, I’m not struck by the individual films, but by the massive amount of money that was spent, the energy and time put into these movies, and the return potential of these movies. With a 3 in 40 chance of getting 10 times your money, with a large enough pot of money it’s worth the risk. Consider your average return on a bond these days something around 3%, the most you can expect from a good stock market return over a long period is around %10-15 (if you are extremely luck), and companies shoot for a profit margin of 20% annual return yearly, then consider the 7.5 percent chance you could win big at the box office or your 33 percent chance of doubling your money or at the 64 percent chance that you’ll at least break even.

These are big risks as compared to the guaranteed return that bonds, stock market, etc provide, but for those 1% or 10% who have a few million around and are willing to play the odds–no doubt with strategies designed to improve those odds–it finally makes sense to me why we get such crap movies these days. With the chance at such monumental amounts of money, I can see why movies are worth the risk.

Of course this doesn’t even consider everything that plays into a film, just to name a few items, timing (such as spiderman’s twin towers trailer which nearly sunk the film), distribution, actors, writers (anyone remember the strike), production snafus (i.e. 007 sound stages fires), not to mention “creative differences,” marketability and marketing, competition, etc.

Yet in the end with corporations fiduciary responsibility to stockholders being primarily bottom line driven, it’s easy to see how and why they spend big to make big blockbusters, even if they suck. With such big rewards as the carrot, it’s hard not see why companies play the odds.

One final note to consider is that the gaming industry (i.e. video games) generate 22 billion dollars in 2008 and cost roughly a quarter to a tenth of what it takes to make a movie. Yet movies still made around 10 billion dollars in 2008. So what you consider relaxation and play, others consider their livelyhood and a cash cow.

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