10 Reasons Why 2016's Blockbusters Are Failing
2. Movies Are Just Too Damn Expensive To Make Money
The production budgets for blockbuster movies these days beggar belief. The $102million allocated to Terminator 2 in 1991 (around $180million today, adjusted for inflation) was unprecedented a quarter of a century ago. In 2016, it’s only slightly above average.
When a studio tentpole flick is guaranteed to cost north of $120million to get from the drawing board to the screening room, it’s already an uphill struggle to make that money back.
Don’t forget, all these huge box office figures you hear bandied about are misleading. It varies according to the territory and the deals in place - the figure is higher in the US - but on average, the cinemas take half that money.
And then there’s print and advertising costs, which have risen steeply in the last few years. It’s been called the hottest boardroom topic in Hollywood. In 2014 it was estimated that it costs around $100million to market a big event movie in the US alone, and the same amount again to market it overseas: on average, more than it costs to make them. That figure’s only going up.
Studios are infamous for their creative accounting, and obviously money is made on licensing, home media etc. Nonetheless, there’s a limit to how much you can polish a turd when the cost of squeezing it out is the annual GDP of a small island nation.
Deadpool cost $58million and looked like it belonged up there with its peers, yet I’m still scratching my head as to why Finding Dory cost twice as much to make as the latest Ice Age film. Yes, one is good and one is not, but they’re both still animated features, right? Where’s that extra $95million gone?
If studios can’t figure out ways to consistently keep these costs down, then they’re always going to be reliant on incredible box office to have a chance of seeing even a half-decent profit.