Strategy & MarketingMedia Production

What You Didn’t Know About the Movie Business

In the early days of Hollywood:

  • Six major studios made about 500 movies a year and earned 95% of their income from the theaters.
  • Little advertising was used to promote the movies.
  • The average movie cost about $4 million in today’s dollars to make.

Today’s Hollywood:

  • Six major studios make about 120 movies a year.
  • The average film today costs about $65 million to produce.
  • A major movie opens on 3,000 – 5,000 theater screens.
  • They are designed for teens and to attract foreign audiences.
  • Ad campaigns for major releases costs an average of $30 million. As a result, the marketing team has as much input on approving movies as the creative team.
  • Movies are exported to other countries, so for most, action is more important than dialogue.
  • Most movies have a 10 year shelf life as they pass through theaters, DVD’s, airlines, downloads, video games, etc…
  • Pay TV’s biggest concern is that heads of households don’t drop their services. That’s why HBO, Showtime, and other pay networks focus their programming on adult audiences.

— Source: The Wall Street Journal

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One Comment

  1. A clear method for innovation in creative industries is the shotgun approach of a myriad of prototypes, followed by a stage-gate process of pruning the work that isn’t good enough.It seems like there are fewer films being made, but is that actually true?  I’d like to think it is for the sake of my cynicism of those major studios, but I have a feeling that the stats are misleading.  I would guess that in fact even more films are being produced today (or at least pre-produced), it’s just that most of them never get to the point of being released.Instead, through the stage-gate process, the films that don’t make the cut are “pruned,” thereby saving the money studios would have spent on them for other things, like the better films.  And if you count short films as part of that shotgun approach, there are thousands upon thousands made.  There’s also straight-to-DVD type of films to consider, are those counted in the stats as well?  Maybe not.To play devil’s advocate, though, you could argue that there might be some films that seem bad to begin with, but actually would turn out well if you just powered through it to completion.And it’s not to say I think those studios are doing a good job picking which to prune – I think they’re doing a bad job – but I’m guessing they’re following this process.

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