The modern day Hollywood film cost an astonishing amount of money to produce. The major film studios seek out investors and corporate businesses for funding prior to beginning film project due to the high cost associated with creating blockbusters. Most modern day mega films range from one hundred million to upwards of three hundred closer to four hundred million dollars. Take director Gore Verbinski film Pirates of the Caribbean: On Stranger Tides that cost a ridiculous $378.5 Million U.S. Dollars to create. The polar opposite would be the movie Paranormal Activity that only cost $15,000.00 to produce. These are two successful movie franchises on opposite sides of the spending spectrum. Understanding both films vary in quality of sound, special …show more content…
Blockbuster studio films typically involve high paid established Hollywood actors. Names like Robert Downey Jr. who in 2015 made $80 million dollars, and Vin Diesel who made $47 million. Without star power films would have to depend on creative storylines and new effects to entice viewers to theaters. Even big time directors like Gore Verbinski who Forbes magazine had listed as the #9 wealthiest director in the world at 3.73 billion dollars get viewers in seats. The major film studios understand this and seek these individuals to create their mass marketed extravaganzas. Many large fees and incentives are attached to practically anyone who has significant influence over a film. For example, Robert Downey Jr. was approximately paid forty million dollars for his work in Captain America 3 Civil War with additional incentives if the film exceeded $714 million in box office sales. This is how major film studios recruit and maintain top Hollywood actors. Unlike the Hollywood studios of the 40’s, modern Hollywood actors take their talents to all studios and rake in millions …show more content…
Paranormal Activity grossed in excess of two hundred million dollars from the starting point of $15 thousand. This example proves there is no direct comparison between budget and profit. As previously mentioned film studios will always seek big corporations and investors to finance projects. An example would be Disney CEO Bog Iger’s who purchased Marvel Studios for 4.2 billion dollars. According to Bernstein Researcher Todd Juenger, Iger is looking to profit considerably from this deal. The most recent Avengers film will make Disney $3.7 billion worldwide in box office sales, $50 million in TV, $1.2 million in DVD & Rentals, and $500 million in toys & merchandise (Mendelson, 2015). Even after paying Paramount Pictures $257 million in fees, $1 billion in exhibitors, $150 million in print & ads, $220 million in production cost, $117 million in home video distribution and $125 million in consumer products, Disney will still profit in excess of $550 million in profit participants and residuals. Not bad for a comic book
The stars, particularly Hollywood stars, made a huge contribution to attracting vast numbers of people to the cinema.
The reason why movies are so expensive to produce, market and distribute is that there is a long list of people involved in the process of filmmaking. Producers, writers, directors, actors, technical crews, film crews, set designers, costume designers, hair stylists and makeup artists, are some of the people who need to be paid whose names are seen as the credits roll at the end of any film. Not to mention the overhead costs of a myriad of equipment, props and the costumes themselves required in the production of a film. There are travel, food and shelter expenses if a movie is filmed on location and not in a Hollywood studio (there is a fee to use studio space as well). Once the actual filming of a movie is completed, more people are involved in editing, special effects and sound. These expenses are dependent on the sophistication of the technology and expertise. Additionally, and most costly is the marketing and distribution of a film.
Most people are likely to relate Hollywood with money. If a person lives in the Hollywood area, people assume she or he is probably rich. If she or he is a Hollywood movie star, the person probably makes a lot of money. Therefore, to follow that line of thought, when Hollywood producers make a movie, they make it just for money. And some filmmakers do seem to make films only for the money the movies will earn. The action movie "Die Hard", the fantasy movie "Star Wars", and the adventure movie "Jurassic Park" are examples of exciting movies that were made just for the money by satisfying the audiences' appetite for escapism.
It allows opportunities to combine the performance of certain activities, thereby reducing costs and capturing economies of scope. This is done by acquiring IP that is underexploited or unused by the owner. They have opportunities to transfer their skills, technology, or intellectual capital from on business to another. This is yet again done through media networks, parks and resorts, and also their studio entertainment. All of which allow them to go globally. Along with the opportunity to transfer skills and technology, they can use their brand name across multiple product or service categories. This is seen in the multiple IP networks, studio entertainment, multiple resorts and parks that are all around the world, and lastly, in their consumer products that were ranked number one in 2011 for being the largest licensor of character-based merchandise in the world. Value chain match-ups seen in primary activities are inbound logistics, operations, outbound logistics, the marketing/sales, and service. All lead to support activities such as technology, human resources, and general administration. Opportunities for skills transfer is seen in the media networks, parks and resorts,studio entertainment, and consumer products. Disney Company can share iconic Marvel characters in their parks/resorts, movies, and consumer products, due to buying the IP to Marvel and it does not stop at just Marvel ABC and ESPN are also involved.
“I can make a big-looking movie for very little money by just being resourceful, being creative, using the rubber band versus a lot of technology, and not being ashamed about it.” ~ Robert Rodriguez
The company know its various revenue generating streams very well. The Disney also sees immense possibility in the sequels of the character based movies. The success of Avengers is a recent example and therefore the company plans a sequel for Captain America 2, Iron Man 3 etc. This will boasts the overall revenue generated by the company. The company is now betting heavily on the introduction of theme parks across the globe especially in emerging markets like China, India, Brazil and Russia (BRIC nations). The growth rate of 10% in theme parks and successful implementation of theme parks in Hong Kong, Japan and France allows the company to develop and construct the Disneyland theme park in Shanghai, China. The presence of 330 million consumers around the Shanghai is yet another key factor that made the Disney to invest approximately $5.5 billion in this park. Without doubt, the market for Disney is growing across the globe and emerging and fast growing economies offers a huge opportunity for the growth and development. The China expanded its economy at 10% growth rate in the past straight 30 years therefore the Walt Disney will sees the immense growth from its theme park in
The Studio System Key point about the studio system could be: Despite being one of the biggest industries in the United States, indeed the World, the internal workings of the 'dream factory' that is Hollywood is little understood outside the business. The Hollywood Studio System: A History is the first book to describe and analyse the complete development, classic operation, and reinvention of the global corporate entities which produce and distribute most of the films we watch. Starting in 1920, Adolph Zukor, head of Paramount Pictures, over the decade of the 1920s helped to fashion Hollywood into a vertically integrated system, a set of economic innovations which was firmly in place by 1930.
[1] Information was mainly taken from the Harvard Business Case Study “The Walt Disney Company: The Entertainment King”
Pomerantz, D. (2013, July 16). Robert Downey Jr. Tops Forbes' List Of Hollywood's Highest-Paid Actors. Retrieved from Forbes: http://www.forbes.com
With a long history in the film making industry, Universal Studios is the largest film studio in the world, with 9000 employee’s. The company produced ‘ET: The Extra Terrestrial’ and ‘Jurassic Park’ which are two of the highest grossing movies in all of time. The company is quite regular in introducing new films into the consumer market, releasing on average between 15 – 18 per year.
With a big history in the film making industry, Universal Studios is the largest film studio in the world, with 9000 employee’s. The company produced ‘ET: The Extra Terrestrial’ and ‘Jurassic Park’ which are two of the highest grossing movies in all of time. The company is quite regular in introducing new films into the consumer market, outputting between 15 – 18 per year.
The release of Gordon Hollingshead and Alan Crosland’s The Jazz Singer in 1927 marked the new age of synchronised sound in cinema. The feature film was a huge success at the box office and it ushered in the era David Bordwell describes as ‘Classical Hollywood Cinema’; Bordwell and two other film theorists (Janet Staiger and Kristin Thompson) conducted a formalist analysis of 100 randomly selected Hollywood films from the years 1917 to 1960 in order to fully define this movement. Their results yielded that most Hollywood made films during that era were centred on, or followed, specific blueprints that formed the finished product. Through this analysis of Hollywood films the theorists were able to establish stylised conventions and modes of production under which a classic Hollywood film was fashioned (Foster, 2008), the film Lord of the Rings: The Fellowship of the Ring (2001) directed by Peter Jackson will be used as a case study to demonstrate these specific conventions.
film can make or break a movie. Marketing a film takes up a great deal of the money that is
The film industry has always been somewhat of a dichotomy. Grounded firmly in both the worlds of art and business the balance of artistic expression and commercialization has been an issue throughout the history of filmmaking. The distinction of these two differing goals and the fact that neither has truly won out over the other in the span of the industry's existence, demonstrates a lot of information about the nature of capitalism.
...rding to the US Economic Census, motion picture and video production in the United States as a whole generated revenues of $20.15 billion in 1997, with Hollywood alone being responsible for close to 60% of this total.” (US Census) Hollywood’s success has come with no great competition to push for more, and with the emergence of film globalization, it should be very interesting going forth seeing if they can maintain the ideal motion picture headquarters. Its unique pool of talent drawn from many different countries cultural impact of Hollywood films is now felt in all parts of the world.