Sunday, August 05, 2012

What makes Films Profitable?

The main doctrine of a profitable business is to produce a quality product that consumers want at a cost effective price. Yet for many production studios, film distributors and investors there is a major disconnect with this concept. Not only have they failed to produce a product that consumers want, they are also not producing their product in a cost effective manor. Whereas technological advances in production and distribution equipment have lowered costs, while increasing quality, film budgets continue to skyrocket.

When choosing films to support studios, distributors and investors ask “whose in it?”, while the audience asks “what is the film about?”. The former believe A list talent insures the success of a project; therefore films without a hot actor on board have difficulty finding financing and distribution. Yet the box office has repeatedly proven this standard to be false. Which celebrity is hot and who is not quickly changes. They quickly become famous for one project, yet they just as quickly disappear. Talented actors—the ones who have learned their craft--maintain a standard of excellence that begins with smaller roles and develops into the body of work, which leads to more challenging roles.

True A listers do not magically appear through PR tricks or highly publicized bad behavior. They are created when the right actor is cast in the perfect role for her or him. It is the unique combination of the right person, the right role at the right time that launches an actor into stardom. The best example is Indiana Jones. Tom Selleck was the first choice for the role. He was the hottest male star at the time, but he was unavailable. Harrison Ford was cast. Most people would be hard pressed to imagine anyone else as Indiana Jones. Although Stars Wars launched Ford to stardom, it was Raiders of the Lost Ark, which made him box office gold. However, even with his strong fan base and his profitability track record, not even Ford could pull in an audience for Cowboys & Aliens. The storyline wasn't strong enough for the audience to suspend their disbelief enough to buy tickets.

Although many of the “A list” actors started in television, many distributors discount their profitability in the theatres. They refuse to see how far reaching and potentially profitable television actors can be. Popular television shows create a fan base not only for show, but also for the individual actors. Ratings translate not only into advertising dollars, but ticket sales as well. Television talent, which has yet to make the leap to film, is more cost effective. They have strong fan bases, yet their salary and perk requirements are usually not has high as their film equivalent. They are also used to working on tight production schedules, which also lowers costs. In addition, every episode of their show is free advertising for whatever film they appear.

Studios and distributors are responsible for the endless remakes and sequels. From their perspective, if it was successful once, it'll work again and again and again. Audiences are tired of reruns. They are looking for something new and the box office proves it. The success of Spider-man movies as well as few other films on the surface supports their theory. However, how much of the box office is not so much the audience being excited about particular film, but rather wanting to see a movie and choosing to see the lesser offensive film. The successful reruns are far out numbered by the mediocre remakes. Dark Shadows and Total Recall are just two in the latest remakes that haven't lived up to expectations. Ticket prices also contribute to the seemingly high box office numbers. By dividing the price of tickets sold into the grosses, the numbers prove that attendance is down.

Audiences are more loyal to genres than to cast, crew or production teams. Although there are hundreds of sci-fi, romance, horror, anime, etc conventions, there has yet to be one convention for an individual actor. Genre is a more reliable source of profitability. The Devil Inside is a perfect example. It is micro budget horror film with a 1 million budget. It was distributed Paramount Insurge. Opening weekend, it grossed 33 million dollars. By all accounts, it is a bad movie, yet it went on to gross over 101 million USD worldwide, because of the genre and it was new film. Many people have a favorite genre, which they will go see no matter who is starring in it or what others say about the film. These people are the target audience, whose word of mouth endorsements will bring in the general audiences faster than any marketing campaign.

Secondly the high production costs have limited the number of films the studios are producing each year and thereby reducing the number of films distributors have available to them. In the past, each studio produced hundreds of films a year, which spreads the financial risk factor among them thereby protecting the studio's bottonline. They were always looking for new projects and new talent in which to invest. However with the enormous budgets most new films, studios, producers and distributors have placed all their financial eggs in one or two baskets. The big budgeted films have to do extremely well otherwise the studio suffers a great financial loss. The break even point for a 100 million dollar film is much higher than for a 20 million dollar film. For that same 100 million, five films could be produced, giving the studio a five times higher chance of making a profit.

Big budgets are caused by A list casts, special effects, big egos and lack of pre-planning.
  • A list actors, directors, and producers simply cost more. A list actors cost millions of dollars, a percentage of the grosses and special “requests”, which could include anything from special food to having their entire family brought with them. The greater expense is justified by their increased profitability. The Tourist is a prime example of how this is not always true. It had two A list actors and barely made budget.
  • Technological advances have created more opportunities for special effects. But by focusing on the new effects, character and plot development have suffered. John Carter is the best example of what focusing on special effects at the expense plot and character really costs.
  • Big egos, poor planning and lack of flexibility combined together are the biggest waste of funds. For decades films were able to boasted about their ability to be innovative. They were the “MacGyvers” of the business world. They were experts at finding creative solutions to production challenges; that has changed. They would rather spend money like a drunken sailor on payday than think outside the box. Disney is remaking The Lone Ranger. Instead of leasing or bartering use of one of the existing western frontier towns, they are building a town. Why? Because someone on the team was unwilling be flexible with their vision of what the town should look like. There was another film that spend thousands of dollars in post production to change the color of a character's shirt. It would have been more cost effective just to make sure character had the right color shirt in the first place.

Technology had brought down both production and distribution costs. Digital video has eliminated the film stock and processing costs. Bulky production and editing equipment has been replaced with smaller high tech pieces that are easier to transport and are more cost effective. Theatrical distribution has replaced expensive 35 MM film prints with hard drives and electronic downloads, which has eliminated the most costly aspects and allowed simultaneous worldwide release, while eliminating most pre-release pirating.

Even with the massive budgets, film continues to be one of the United State's most profitable exports. It is one of the few industries that can't be outsourced. Films that do not make budget domestically find an eager audience abroad. However, theatrical release is only one source of income. DVD or electronic download followed by pay per view and network release increase the films revenue without adding to the production costs. The growing number of Internet and satellite entrainment networks has created an increasing demand for new television programming and films. These venues have a high demand for content and have the ability to pay for it.
The film industry is a business like no other; yet like every other business its success depends on their ability to provide a quality product that meets its customers' needs. There a no simple formula for a successful film. What people will like cannot be summed up on a balance sheet. Just because a film worked once, it doesn't guarantee that it will work again. Nor can relying too heavily on one element, whether it be star power, special effect or remaking a popular film, insure a film's profitability. However, if you give the people what they want they will come.

Have you ever met someone for the first time and instantly liked or hated them? What if the meeting again was not by coincidence, but an opportunity to make different choices? Would you do things differently or would you make the same mistakes?

Elizabeth was asked by her mentor to teach a writing course at a small college. Since she never forgets a kindness, she reluctantly agrees. Arriving in town, she instantly regrets her decision. She wants to run, but she is honor bound to stay. Even as the ghost of a small child begs her to forgive, the memories of another time arouse feelings she doesn’t understand and is unable to control. When she meets Shane, Elizabeth is overwhelmed with hatred. The feeling is mutual as Shane redirects her jealousy and rage. By the time Elizabeth realizes what is happening, it is too late to run. Can she and the others learn how to forgive and remember the love before the jealousy, hatred and need for revenge once again take over their lives?

Never Can Say Good-bye is a traditional ghost story with a reincarnation twist. It picks up where the films Somewhere in Time, Always, and Ghost left off. Its logline is: Love and hate survive death.

To learn more about Never Can Say Good-bye and Theresa Chaze's other projects go to

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