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  • Films and Economics

    Posted by Carl from Chicago on September 7th, 2012 (All posts by )

    I often see film crews working in Chicago. Here is a set with 50’s cars on the North branch of the Chicago River in the early evening.

    Steven Soderbergh, who has filmed many recent box office successes (including a few of my favorite films including “The Limey”) works as his own cinematographer and shoots on digital. He also works at a very fast pace, per this interview:

    “Working fast enables you to be less precious and think only about what the movie wants as opposed to what you want — which can be different. ‘Magic Mike’ was made in 25 days. Fifteen years ago, I couldn’t have done that. ‘Sex, Lies and Videotape’ took 30 days. I could make that movie in 15 days now, and do it better too.

    The budget for “Magic M*ke” (don’t want the traffic) was $7M. This movie was filmed in digital. A new movie “Side by Side” discusses the transition from analog to digital film making; apparently documentaries have been digital for years due to costs and ability to quickly set up a scene (analog is more cumbersome).

    As someone who is interested in the economics of everything, it seems that if you can make a movie quickly and cheaply the relative profits would be immense. If someone like Soderbergh can get a movie done in 15 days on digital, and it doesn’t involve big special effects or giant set pieces, those sorts of movies should squeeze out the traditional opponents.

    There is an aura of tradition, crafts and guilds surrounding the movie business, yet like music and books these traditions are being upended by new technologies. If the customer (movie-goer) can be satisfied with a cheaper product delivered more efficiently, those artifacts of a union age and vast sets and cadres can be left behind for a more streamlined and quick filming experience.

    A studio that can harness the new breed of cost efficient and fast movie directors, using modern (cheap) technology, should be able to make more profits over time than their competitors, unless those competitors have structural advantages (sequels, rights to books on vampires or comic heroes) that can offset them. There could be a time when the rituals are cut away and movies are made on a rapid timeline with a small crew in an efficient fashion. This could allow for more offbeat films to be released to a niche audience, kind of the same way in which new cable channels like HBO and FX gave us a place for new, interesting series that aren’t aiming for broad laughs. They gave us “The Sopranos” and “Damages” as opposed to “According to Jim” which the main networks pushed.

    All the trappings are expensive and un-economical. Like the fancy recording studio and equipment, which all went digital (on a laptop), the economics cannot be denied.

    Cross posted at LITGM

     

    16 Responses to “Films and Economics”

    1. Bill Brandt Says:

      I remember reading an article in Forbes about how technology is allowing small budget film makers – to skip the tradition financing process. No longer is Hollywood the gate keeper.

      One can make a movie for a few million, sell the rtights to the cable companies to pay off the cost – then have the rights revert back with ownership of the paid for movie.

    2. Sgt. Mom Says:

      Just what I said,on the Eastwood thread!

    3. Shannon Love Says:

      Really, the power and the glamor of all old media was really based in their very unglamours mass-scale analog technology. All print media was powerful because of the industrial presses and the distribution trucks. Radio and TV were powerful because of powerful broadcast antenna. Movie studies were big because of their ability to process and distribute huge amounts of chemical film. None of that power had much to do with the quality of the information moved via that analog technology. It’s just that the sheer scale needed made the nuts and bolts of delivery ultimately trumped content. Lies and crap widely distributed, had more impact than truth and quality with a small audience.

      Digital techology with its powerful peer to peer capabilities has destroyed the old model in old media. We may loose some things, like ultra big budget, big set movies but I think we will ultimately gain in quality. As the relative cost of production and distribution shrink, quaility of the final product will become more important. Moving making will focus more and more on story and less on scenery.It also helps that digital media lets producers target specific audience so that they don’t have to churn out a multicultural, low-common denominatior e..g action movies, just to survive.

    4. Bill Brandt Says:

      Sgt – it ties in with the publishing business too – the oldgate keepers are losing their control

    5. Mike_K Says:

      The Limey was great. I watch it every once in a while. Imagine making Technicolor movies in the 40s. I went to college with a girl whose step father owned Technicolor. Great racket. Only he owned the process which used three cameras simultaneously. Incredibly expensive.

    6. PenGun Says:

      Do you have any idea what a decent camera costs? Do you have any understanding how much digital infrastructure you need to support the large amounts of SDI you will be generating. Although a modern SSD can just handle the speed, it used to take fairly serious RAID arrays just to cope, ones big enough to be useful are mucho dinero.

      Anyway go score the reconstruction in HD of Lawrence of Arabia. A marvelous movie full of great actors acting. It’s so different from modern movies that it seems like a different art form.

      You get, as always, pretty much what you pay for.

    7. Gringo Says:

      Several decades ago I bought an all-entry ticket for a week long film festival, and saw about 20 films. I was very impressed with the quality of the movies, which were made for much less than the studios did. The digital trend will only accentuate this. You don’t need to spend a lot of money to make a good film.

    8. David Foster Says:

      The ultimate in old-media high-capital-requirements was probably network television….an hour of live TV requiring a slice of each of hundreds of television stations AND the very expensive (prior to fiber optics) wideband transmission facilities AND the production setup itself.

      Robert Avrech has mentioned that directors have much more creative freedom in made-for-tv movies than in made-for-theater movies….I’m curious about the dynamics that led to this.

    9. Dan from Madison Says:

      I think that the studios will always have a lock on the very high tech movies with the most modern special effects, and of course the “big” movies with things that blow up, car chases and the like.

      The movies that I think we are talking about here are “story” type movies, where you can keep production costs down just because of the type of movie that is being filmed.

      Any way you slice it, I believe the thrust of the post is correct. Hollywood isn’t going to be the gatekeeper for long.

    10. Bill Brandt Says:

      @Dan – some years ago I was drive across I80 and being being aviation nut – and history nut – and some claim general all-round nut – wanted to stop at Wendover field – where they trained all the heavy bomber crew in WW2 – including the Enola Gay –

      Anyway they are filming a movie there – ConAir as it turns out – and as usual my theme song should be Peggy Lee’s Is that all there is? – the film set was just a bunch of tents, trailers, chain link fence and security guards . No Nick Cage to be seen.

      Anyway I am at the fence and this fellow – obviously with the movie but from the other side – a producer or director – is by me.

      Don’t movies today rely too much on special effects and not good writing? I asked –

      The mysterious stranger smiled – and had to agree.

    11. T Migratorious Says:

      I hesitate to say these days to say that I love movies because I don’t love (or even like) much that’s been made in the last 20 (30?) years. I do, however, still love vintage movies and appreciate both the art and business that went into making them. PenGun is right: the costs of making something as gorgeous as Lawrence of Arabia are staggering. No independent could ever dream of replicating its quality.

      But the studios today are spending wads of money without even getting within shouting distance of a film like LoA in terms of acting, story, or visuals. The money now is spent on (1) CGI and (2) large salaries for name directors, actors, or “safe” franchises. A lot (a majority?) of the profits of modern blockbuster releases come from overseas markets where folks apparently love explosions.

      Maybe they don’t have the money to recreate the majesty of great Hollywood films, but independents have a lot better chance of making interesting, profitable, and visually provoking films that are more true to the Hollywood tradition than are the Hollywood films of today.

    12. setbit Says:

      You get, as always, pretty much what you pay for.

      Estimated production budget of The King’s Speech: $15 million
      Estimated production budget of Transformers: Dark of the Moon: $195 million

    13. John Burgess Says:

      Any idea how much Chicago taxpayers are subsidizing films shot there? Any idea if they’re getting anything in return?

    14. Bill Brandt Says:

      Setbit – every time one of these quality – low budget movies – hit the big time I think it sticks a finger at the Hollywood Hierarchy. The British know how to do this. They have made many high quality “low budget” films – have you seen My Weekend with Marilyn ? Mrs Henderson Presents ?

      There are numerous British actors/actresses who are true pros and don’t demand the outrageous salaries a Matt Damon would demand.

      Then too part of the game is advertising – which is why some of these films never reached critical mass – Wm Goldman estimates that an advertising budget should equal the production cost.

      But even that model may be going by the wayside – when you can sell the film straight to a cable company with a built in audience –

    15. setbit Says:

      Do you have any idea what a decent camera costs?

      I’m ashamed that I was foolish enough to get sucked in by this question, but since I’ve already spent the time researching it, I might as well share.

      A digital cinema bundle plus a couple lenses will run you just under $75,000 US.

      Enough high performance tiered storage for a few hundred hours of footage would be something like $150,000 US.

      From a purely technical viewpoint — that is, capturing footage of sufficient detail and cinematographic quality — I think a setup like this could readily produce a film the visual equal of Lawrence of Arabia.

      Going further, a current generation $1000 “prosumer” camera, plus some careful post-production filtering to simulate the look of classic color film, could produce Blu-ray quality footage that would fool most people (myself included) into thinking it was vintage Technicolor.

    16. mishu Says:

      Why pay all that money for tiered storage hardware? Just rent that space “in the cloud” (it’s all the rage in the tech mags. I do wish they put a cork in it as not every problem is a nail and not every solution is a hammer.) then download the finished product to the medium you want.