Hollywood’s love affair with expensive movies

News Ryan Lambie 12 Mar 2012 - 15:04

As John Carter kicks off the season of big-budget movies early, we take a closer look at Hollywood’s enduring love of producing expensive pictures…

Buzzards were circling John Carter, it seemed, long before it was even released. Set against a modern Hollywood backdrop of sequels and comic book adaptations, it simply didn’t compute: here was a movie that wasn’t based on a currently popular property or best-selling novel, didn’t have an A-list star at the helm, and cost an estimated $250 million to make. Surely it was doomed to fail?

As it turned out, John Carter wasn’t the disaster some had predicted. Its reviews were admittedly mixed (though we thoroughly enjoyed it), and while its box-office performance at the weekend won’t have anyone at Disney leaping for joy, it wasn’t a failure – bringing in a worldwide gross of a little over $100 million so far, John Carter’s on the way to making its money back.

Its break-even tipping point may be a way off yet, and the chances of there being a John Carter sequel are looking rather unlikely, but Disney can take comfort in the knowledge that, although it isn’t in the possession of a multi-billion dollar hit the size of Avatar, neither does it have a terrible bomb like Mars Needs Moms on its hands – a CG animated flop released, coincidentally enough, almost exactly one year ago.

Before the weekend, when John Carter’s future still looked bleak, an interesting question popped up more than once on Twitter: if John Carter does poor business, will Hollywood stop investing such colossal sums of money in its major releases? With Chronicle proving you can make an acclaimed special effects movie on a budget of $15 million, and bringing in a $150 million return from that investment so far, surely this points the way to a new paradigm: you don’t need to invest nine figure sums in order to create a hit. Every autumn, low-budget horror movies prove the same thing – you can make a film for less than a million dollars, and people will still come and see it.

The reality, though, is that the Hollywood movie making system’s geared from the ground up to make expensive movies. Big budgets and glamour are largely what sets its movies apart from every other film industry, from the hit musicals of the 30s and 40s to the special effects pictures of the present. With big summer blockbusters currently costing as much as $300 million to produce, it might seem as though such films are becoming more expensive, but the fact is, Hollywood’s always spent absurd sums of money on making movies.

The reasons for these bloated budgets can vary. In the case of, say, 1963’s Cleopatra, a mixture of inefficiency, demanding stars and sheer bad luck saw its expenditure spiral out of control. Originally budgeted at $2 million (a not insignificant sum at the time, but a reasonable amount for a lavish historical drama), the cost quickly soared to $44 million. It remains the only film to have been a number one box-office hit, but still fail to cover the cost of its production.

Instances of such costly mistakes, however, are rare. Even movies commonly regarded as failures usually make their money back plus a bit extra – the infamous Waterworld being one of them. This partially explains why, even when a true box office bomb does go off, it’s seldom dwelt on for long; by the time foreign markets, DVDs, merchandising, TV licensing and in-flight movie sales are all taken into account, the money will start rolling in eventually – it might take a few years to break even, that’s all. And besides, another Avatar’s sure to roll along soon…

Funding and special effects

Hollywood movies are commonly funded by investment banks, who’ll pump money into a project as long as there’s a reasonable chance of making a good return. And in order to prevent studio executives and investors from getting too nervous, a project has to have some sort of hook to hang all that money on – which is partially why it appears to be far easier to get a remake or comic book spin-off greenlit for $150 million than it is to get an intimate drama made for $25 million. A film with a major star or director at the helm, or based on something with a pre-installed audience, is far more likely to receive financial backing.

And if there’s something like $250 million in funds available to make a movie, why not spend it? A little over a decade ago, when movie stars were commonly used to market an expensive movie, it was quite common to blame spiralling budgets on greedy performers’ wage packets. Terminator 2 cost almost $100 million to make in 1991 – a huge sum at the time – and almost 15 per cent of that budget was blown on Arnold Schwarzenegger’s pay cheque.

These days, blockbuster movies seldom rely on expensive actors for success. The classic Hollywood movie star’s still alive and well (Tom Cruise is but one of them) but major releases are now more commonly sold on visual spectacle than household names. This explains why 2007’s Transformers cost about $150 million to make, even though the most famous actor in it was Jon Voight – what Hollywood saves on stars it blows on special effects.

It’s not even the case that digital effects have to be expensive. Movies such as Chronicle, Monsters and Iron Sky all contain CG effects sequences to a greater or lesser extent, and the budget of those movies combined is still a fraction of the one eaten up by Transformers.

The difference, of course, is that Chronicle, Monsters and Iron Sky didn’t have Michael Bay directing, Steven Spielberg in attendance as executive producer, or their computer effects generated by ILM and Digital Domain, two of Hollywood’s most respected effects studios. All of those names come at a significant price.

Cash and quality

Hollywood executives have long equated the amount of money a film costs to make with its quality. This much becomes abundantly clear in William Goldman’s excellent Adventures In The Screentrade, written in the early 80s. It’s a portrait of a dog chasing its tail: of producers constantly hunting for the next hit, but utterly uncertain of what will or will not make money.

In one chapter, Goldman describes the pre-production process of a seldom-discussed 1981 movie called All Night Long. Originally intended as a tiny, low-budget drama, it gradually mutated into an expensive comedy vehicle for Barbra Streisand – what could have been a $3 million cult hit became a $15 million flop.

The reason for this, Goldman argues, is because Hollywood producers are distrustful of low-budget movies; surely, they’d maintain, a $15 million movie with a star attached to it is better than a $3 million film with a cast of nobodies?

This way of thinking is best summed up in an anecdote about a Sam Peckinpah movie, Ride The High County. A film ecstatically received by critics and preview audiences, the studio in charge of its distribution barely marketed it, and the movie sank without trace. Why was this, Goldman asked one of the studio’s executives. “We didn’t believe those preview cards,” came the reply. “It didn’t cost enough money to be that good.”

What’s remarkable about Goldman’s book is that, even though it’s almost three decades old, it could have been written yesterday. We may have the home computers, Internet, videogames and numerous other innovations, but Hollywood’s process of making movies has changed very little. According to Goldman, Hollywood producers were wondering how to reduce the rising cost of making films back then, and that’s still true now.

“Money today, as it always has been, is the essential glue that binds the movie powers to each other,” Goldman wrote. “Everywhere you hear the cry: ‘We’ve got to do something to bring down the cost of pictures.’ I don’t see that happening.”

William Goldman didn’t see it happening in the 80s, and with even the 2008 financial crisis doing little to dent the budgets of Hollywood’s biggest pictures, I don’t see it happening in 2012 either.

Will piracy, changing audience habits, and greater competition from other forms of entertainment – most obviously videogames – eventually force Hollywood to reassess its decades-old method of filmmaking? Possibly, but there’s no sign of a change in attitude yet. Only a string of big-budget disasters – and a subsequent drop in outside investment – is likely to change the way Hollywood makes movies. What we're more likely to see is even more creative caution, as we saw not long ago with the cancellation of Guillermo del Toro's At The Mountains Of Madness and the budget cut on The Lone Ranger.

Universal Pictures’ big blockbuster hope for its centenary year is Battleship, a splashy sci-fi action flick starring Taylor Kitsch and Rhianna, and nominally based on maritime guessing game involving plastic pegs. Already billed as a tentpole picture, Universal’s executives took the unusual step of raising its budget to a dizzying $212 million to allow for an action set-piece shot in Hong Kong. “It was one of the craziest meetings I've ever had," said director Peter Berg. “They said, ‘We want to go bigger.’”

Only time will tell whether Battleship is the Transformers- or Harry Potter-level hit it’s hoping for. But if it isn’t, then there’s always another project waiting in the wings – Snow White And The Huntsmen, perhaps, or maybe 47 Ronin – and who knows? Maybe one of those will be a big hit.

Curious though Hollywood's processes may seem, and varied though its output inevitably is, it's inarguable that these processes are what makes its films unique. Where else would we see Vin Diesel dragging a safe around the streets of Rio in Fast Five? What other system could excel at creating the grand vistas of the Lord Of The Rings films, Star Wars or Inception?

Hollywood may appear to be a dog chasing its tail at times, but when the stars are in alignment and the right filmmakers sign up for the right picture at the right time, the results speak for themselves.

LA Times

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