Photo credit: Jakob Owens
Even in these challenging times, there’s big money in the global movie industry. In 2019, the industry broke the record with sales that surpassed $100 billion for the first time ever. Sales have not reached those levels again, but with the rise in home entertainment venues, the experts are pretty hopeful.
The movie industry has a long and interesting history. It’s a road that twists and turns and drips with money. You’ll find a fascinating article about it at Lottoland, and we encourage you to read it for a clear understanding of how the system works before you invest in the industry
There are a lot of different kinds of movie budgets. When a studio thinks they have a script that will be a big success, they’ll put a lot of money behind it. They’re investing in the location, the actors, directors, crews, and professionals that go into making a blockbuster. “The Lord of the Rings: The Return of the King” (2003) was over $100 million to produce and grossed over $100 billion. It had a budget of $94 million. This one worked out well but not all movies do. One example is “The 13th Warrior” (1999). This film was created with a $160 million budget, but with problems with actors and production and a year delay on the release date, the movie only grossed $61.7 million at the box office. While a few professionals still rate the movie as a five-star production, that matters little when it loses that kind of capital.
Photo credit: Jakob Owens
The breakdown of the movie budget is divided into these basics:
- Story rights – the right to produce a film based on a story, book, novel, video game, remake, or sequel. This can cost from a few thousand to several million.
- Screenplay – this is the person who writes the script. An A-list scriptwriter can earn $100,000 to 1-million. A screenplay doctor may be needed, and they are well paid. Re-writes on pages and changes demand high prices as well.
- Producers: Film producers and executive producers are well-paid; A top producer can earn a large salary, bonuses, and a share of the profits.
- Director: The DGA minimum is about $19,143 per week for a minimum of ten weeks work. An A-list film director can command 5 to 10 million per film.
- Cast: While the bulk of the cast usually gets paid by the Actors Guild standard rate of about 2,300 per week, famous and bankable film stars can demand fees up to 30 million per film, plus perks (trailer, entourage, etc.) and possible gross participation. Sometimes an actor will accept less money in exchange for more share of the profits. Extras have various agreements. Some work for free.
- Production costs: The cost of producing the film includes food and drinks, catering, design for the sets, live sets, studio costs, transportation, hotels, wages for crew members, fees for stopping traffic for filming, and all kinds of minor details.
- Visual effects: The cost of computer-generated effects and visual effect work in post-production depends on the amount of work involved and the experience needed of the technician to produce the effects.
- Music: Generally, music for a movie is figured at about 2% of the cost of the film. If you use a big star to sing in the movie, it can easily cost a few million.
Photo credit: Ramon Kagie
For your movie to become a big hit, blockbuster, people have to pay to see it. For people to pay to see it, someone has to get to the theaters to take your movie and convince the people that they want to see your movie over the other six shows playing at the theater. This falls under the category of marketing and distribution.
Marketing and distribution are entirely separate issues. It is not in your production cost. But, it does factor in when deciding if a movie was successful. For example, “Spider-Man 2” was $200 million to produce. But, it also cost $37.7 million to distribute, so that’s a huge profit and was easily absorbed.
It costs a lot of money to make movies, and there are no guarantees. But there is a tremendous amount of money to be made in the movie industry if you are willing to learn and trust those who know. There are investment opportunities for those who are looking for an exciting venture. But, like anything else. It pays to go with the experts. You may lose some before you win, but if you play long enough, winning will come. In the meantime, just enjoy yourself rubbing elbows with superstars.