Open Forum Friday: Will The Blockbuster Ever Stop Being Profitable?

Posted by on October 3rd, 2008   Filed under: Industry News, Open Forum Friday
Source: The Hollywood Reporter

Over the past couple of years, we’ve seen the budgets of major blockbuster films balloon to ridiculous proportions. Oh sure, budgets are expected to increase over time anyway due to inflation, but according to this list, currently 25 of the top 30 most expensive films came within the last 5 years. Spider-Man 3 reportedly cost over $250 million to make… doesn’t that seem just a little bit out of control for one movie?

There has been some concern in the past that this trend is bad for the industry overall because studios are taking less risks and putting all their eggs in one basket. In reality, however, it turns out this has actually been a very good thing for studios (so far). According to a recent study just released by SNLKagan, 2007 was the highest-grossing year ever for movies, at least in terms of domestic box office numbers. Not surprisingly, the movies with the biggest budgets were found to have the highest box office gross (mainly because they play in the most theatres and have the highest awareness), but more importantly, they also make the most net profit. That is an important point, because it seems that the theory of keeping production costs low in order to maximize profits only works in a few select cases (ie. horror films). When broken down by genre, animated films were found to be the most profitable of all.

The message is clear: go big or go home. It seems like we can expect budgets to escalate even further over the next few years as long as people keep turning out in droves to see these massive event movies. But will there ever be a point where the extra money spent to produce a movie stops bringing in more potential ticket sales? Will audiences grow tired of franchises like Pirates of the Caribbean and Transformers, or will they continue to see whatever movies are hyped the most? In the world of The Long Tail, this all seems a bit counterintuitive to me. But if I’m not mistaken, action movies in the 80s did eventually fall victim to their own bloat. Give us your thoughts here on Open Forum Friday.



  • Ian

    I’ll invent something here: It’s about the 3S’s: Spectacle – the big one the real reason to see something on I-max or on the biggest screen around and to enjoy the experience with a crowd.
    Sexiness – does it show that crowd people they want to identify with people they wish they were being awesome, kickin’ ass savin’ the day, all that shit (this could be the alternate s for this category)
    Story – not often the most important but by golly I think it does occassionally matter. The Dark Knight was old school big explosions big set piece action but it wouldn’t have done as well if it didn’t have a good story. And hell sometimes this does allow a modest film to become big such as with The Sixth Sense, etc.

    I think the economics of media has changed due in part to the digital age and the evolution of the culture that faciliated this. People still like their person little films but they probably prefer a different venue for viewing them. I’d have to say that perhaps the big screen is now the place for blockbusters. Though I do think those that are working in these new media formats (video podcasts like Channel Frederator, web TV for the out-takes and other series, and also cable TV (not that this is particularly new)) will still find great profit because people don’t just want the blockbuster all the time.

  • I think that’s a really good point actually. People will wait to see the smaller movies via DVD or download, but it takes a really big movie that everyone’s talking about to get them out to the theatre.

  • All I know is that as long as the trailers look good and Brett Ratner’s not directing them, I’ll go see any summer blockbuster that tickles my fancy.

  • “budgets are expected to increase over time anyway due to inflation”

    Yes. But also it has to do with greedy actors that want their salary to be the cost of a spectacular indie. I hate the fact that it has come to that.

    “will they continue to see whatever movies are hyped the most?”

    I’d bet my life on that.

    “3S’s”

    Googled this and came up with “shit, shower, and shave”. I’ve actually heard that quoted sequence of words before. I still like your use of it though.

  • Ian

    Yeah I just sort of came up with it based only slightly on Aristotle’s Poetics.