Why do movies cost so much to make?
2009 was an unpredictable year for the film industry. The $100 million Will Ferrell vehicle “Land of the Lost,” brought in a meager $65 million in worldwide box office receipts, while the sleeper hit “Paranormal Activity,” made for $10,000 in relative pocket change, broke the $ 100 million mark.
Why do movies cost so much?
Because they can
- Budget budgets will always expand to “fully absorb the capital available,” whether or not that extra cash results in a better or better-selling product
- During the economic boom of the mid-2000s, Hollywood was flush with cash
- Wall Street hedge funds partnered with big investment banks like Lehman Brothers and Goldman Sachs to pump $15 billion into Hollywood films
- Studios could spend less of their own cash on each film while still taking a 10 percent “distribution fee” off the top
2009 was an unpredictable year for the film industry
The $100 million Will Ferrell vehicle “Land of the Lost,” brought in a meager $65 million in worldwide box office receipts, while the sleeper hit “Paranormal Activity,” made for $10,000 in relative pocket change, broke the $100M mark
Why do movies cost so much?
Because they can
- Budget budgets will always expand to “fully absorb the capital available,” whether or not that extra cash results in a better or better-selling product
- During the economic boom of the mid-2000s, Hollywood was flush with cash
- Wall Street hedge funds partnered with big investment banks like Lehman Brothers and Goldman Sachs to pump $15 billion into Hollywood films
- Studios could spend less of their own cash on each film while still taking a 10 percent “distribution fee” off the top
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