George Lucas Predicts Death of Big Budget Movies

H_Fisher writes "Before the red carpet had cooled at last night's Academy Awards, George Lucas told the New York Daily News that big-budget movies will soon be history. From the article: "'The market forces that exist today make it unrealistic to spend $200 million on a movie,' said Lucas, a near-billionaire from his feverishly franchised outer-space epics. 'Those movies can't make their money back anymore. Look at what happened with King Kong.'" Lucas' prediction: "In the future, almost everything that gets shown in theaters will be indie movies ... I predict that by 2025 the average movie will cost only $15 million.""

Comments

No even need to buy, just borrow

[drgonzo59]

The local library and the university library where I live has some good classics and they are free.

Re:George Lucas is wrong

[Mr. Underbridge]

For those who are familiar with my typical rants and raves on Slashdot, this post isn't much different. I'm the sole anti-copyright activist in most threads,

Wait - what? I'd say 75% of slashdot is anti-copyright, 50% of it anti-patent, and 90% anti-software-patent. Your threads must be small.

Yes, look at King Kong

[Bogtha]

"King Kong" box office record

Big budget epic "King Kong" has generated 100.3 million yuan (about 12.5 million U.S. dollars) on the Chinese mainland, becoming the box office king among imported films in the past five years.

"King Kong," with a 207 million U.S. dollars budget and 540 million U.S. dollars in global box office revenues, has received four 2006 Oscar's nominees -- Art Direction, Sound Mixing, Sound Editing and Visual Effects.

So a 200% return on investment in the first year alone, not counting merchanidising, not counting DVD sales, DVD rentals, TV licensing and Hollywood accounting practices, isn't enough?

There's another thing as well - lower budget doesn't mean lower quality. I don't mean that you can get by with spending less on equipment, hiring unknown actors, etc, I mean that if tomorrow's average budget for films is a tenth of what it is now, you wouldn't notice from watching the films.

Drop the salaries across the board, and you won't get lesser performances. Brad Pitt and Angelina Jolie aren't going to stop trying so hard because they get paid $1 million per film instead of $20 million per film. Hell, you might get big name actors to work a bit longer before retiring.

Drop the advertising budget across the board, and you won't get less demand. You won't get any more competition from the low budget films because whatever Hollywood spends on advertising would still far outstrip people with limited budgets, even after massive reductions.

The only reason so much money gets spent on advertising and actors is because there's always somebody in Hollywood willing to spend more. It's a tragedy of the commons. If people weren't so eager to get the #1 name or the most airtime, the same films could be produced for a fraction of what they are at the moment.

Re:Yes, look at King Kong

[Deep Fried Geekboy]

You need to educate yourself about how movie accounting works.

You pay $10 to watch a movie. This is the GROSS.

The exhibitor (eg Cineplex Odeon) take 50% $5 and pass the rest up the chain.

The distributor (eg Lions Gate, Miramax, Gold Circle) take 50% ($2.50) and pass the rest up the chain.

The remaining $2.50 is the PRODUCER'S GROSS.

The A-list actors who have a % of gross take their cut. Say 20%. That leaves $2.

Now that $2 is used to pay off the cost of production ('negative cost') and give the investors a return on their capital. This includes things that have already been paid like producer's fees, actors' fees, writing fees, all the crew costs, etc. The studios usually get a big cut of this because the movie uses their facilities, which they charge out at exhorbitant fees.

Once the negative cost has been recouped (if ever), what's left is PRODUCER'S NET, which is what most people in the movies mean by profit.

As a writer, I usually get 5% of this, sometimes known as 'five monkey points' because only monkeys think they mean anything.

But anyway, the logic of all this is that a movie must make AT LEAST 4x it's negative cost to go into profit. So a $200m movie must gross $800m+ to go into profit.

Re:If so, only because he killed them.

[Peteee]

King Kong was hardly a disaster.

Domestic: $216,905,000 39.9%
+ Overseas: $326,899,029 60.1%
= Worldwide: $543,804,029

Good movie too imo

Re:2025 is a long way off...

[Lumpy]

Here are some facts.

Hollywood uses a very strange accounting system. No movie in history ever made a profit. No matter how much a movie will Gross it will never exceed the expenses for that film. I know. Several friends had been promised "Net points" on a hollywood film they worked on. They never made a dime (Look at Stan Lee they tried that crap on him as well!) while the few like the director were given "Gross Points" and made their millions. After everyone is paid the rest of the money goes into paying the Gross points and other incidentals so that no movie ever makes a net profit.

This has been this way forever in Hollywood.

Secondly most hit movies lately have been indie films bought and then re-made These are the ones that people actually talk about, buy the DVD, and reccomend others to see. Most of the big budget films do not get the re-viewings or reccomendations from people to their friends.

Re:Note that he said "the average movie"

[Vejadu]

The budget for The Chronicles of Narnia was really close, at $180 million.

Re:George Lucas is wrong

[Fordiman]

Fact: since 1980, the dollar has lost 61% its value (representing 154% inflation over 100%)
Fact: since 1980, the average salary of a US citizen has risen from 15,757 to 41,400 (162% increase over 100%)
Conclusion: in the last 26 years, the average buying power of an American citizen has increased by roughly 3.1%

Doing good, folks. Lets see if we can't make it 6% in another quarter-century.