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

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.

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: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.