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: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.