Film Budgets and You! How a Billion Dollar Industry Distributes its Money.

Kotaku.com

Everyday, we see the effects of a billion dollar industry. Billboards plastered with faces of some big-shot and a date to accompany them, flashing one-minute trailers take over television ad-space, and all with a theater to sell it. The movie industry makes billions every year, but how do the movies make this money? How are movies made in general? The key to it all is the budget. So what makes up a budget, and how do companies deal with the scarcity of funds? A lot makes up a budget, usually the entire movie, deciding their budget by the actors they want and the stories they need.

A movie budget is made up of four key parts, above the line, the price of creative talent such as directors, producers, actors, etc., below the line, which is the estimated production cost, post-production, editing, digital work, etc., and then other. Though this seems simple, studios don’t make it easy. Hollywood is a cut-throat market, and studios are just the same, so reluctant to give out any real figures on movie budgets. In an article by the L.A. Times, Patrick Goldstein highlights the reluctance of studios to release a full-fledged budget, but why would they? What are you going to do when you have another pixels on your hand and your profits barely scratch the $129.3 million budget?

So how much is the budget? And why does it always seem like so much? Well for many of these epics we see today, these actually come out to small. Take a look at The Avengers, included in that “$220 million” budget is the price of every actor, which according to Movie Pilot, was close to around $94 million. The rights and screenplay alone are no where near cheap either, especially for an already well-established franchise, and knowing from experience, the rights were at least $11 million (about 5% of the total budget). We’re at about half of the budget, so where’d the rest go? Cost of directors, producers, production, post-production, and every other little thing that it takes to make a movie. Clearly, Disney knows where to spread their money to make a clean profit. With over a billion dollars in profit though, it was clearly well worth it from a profit stand-point...

But would it win an Oscar? One of the most coveted awards in film-making, would a $200 million film be able to even scratch the surface of a 'best picture?'