4 Reasons Why Hollywood Should Start Spending Less

2. Profit Margins Would Be Higher

Avengers Simple maths dictates that a film made on a lower budget will result in higher profits than if more money was spent on the same film's production process. Trimming a film's budget won't have a sizeable impact on its gross revenue because the incentive to see a film isn't about how much it cost to make. And the ticket price in cinemas or the size of the studio's cut of the gross revenue isn't going to change because the film's budget was lower. Therefore revenue remains more or less the same but expenditure is lower, meaning higher profits and profit margins. That's the kind of thing business studies students learn at the age of 16, or that can be gleaned just by paying attention to how business works. The Avengers may have grossed $1.5 billion but its $220 million dollar budget, and marketing and distribution costs meant that its break even point was a colossal $1.1 billion, giving it a very low net profit when compared to its gross. It's the same for Man Of Steel which had a similar budget and break even point. And since these films were based on established franchises with a lot of hype surrounding them, if their production budgets had been cut by, say, around 30%, their gross would remain the same, resulting in a higher net profit margin and hundreds of millions of dollars more in profit.
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JG Moore is a writer and filmmaker from the south of England. He also works as an editor and VFX artist, and has a BA in Media Production from the University Of Winchester.