Looking at the economic factor behind the silver screen and this year’s biggest flops
It is officially October, and with the arrival of the cold weather comes the reflection on this summer’s of the blockbuster season. This year has proven that big-budget movies are not always guaranteed box-office successes. It has been a bitter pill to swallow, but rising ticket prices are driving most people away from the theaters, with movie attendance dropping by 10 per cent this past summer—according to Business Insider.
Over the last decade, Hollywood has been primarily misled by the potential success of sequels, reboots and remakes. Promising movies with bloated budgets that become huge financial disappointments have become the norm in recent years. The most recent of these failures was the Ben-Hur remake, which had an abysmal opening weekend. According to Forbes Magazine the film brought in a mere $11.4 million dollars, while the film had a production budget of $100 million dollars. One of the reasons these movies fail to meet the production company executive’s profit expectations is they often go over budget. Business Insider reports that some movies are so poorly managed they can exceed estimated production costs by over $100 million. How can this be possible?
According to Anton Shevchenko, professor of operational management at Concordia, a movie is like any other project. It is a set of processes and tasks all undertaken in order to reach a goal. In the case of the movie industry, the goal is to reach an audience and reap enough profits to make the film’s production worthwhile. Studios typically hire a set of financial analysts to determine whether or not the studio should take on a project, and give a tentative budget for production.
If the crew chosen for the production process is unable to work together and drags out the production process, a once-promising movie can become a financial nightmare. For example, according to writer Ryan Lambie, in an article for denofgeek.com, director Michael Cimino went 200 per cent over his budget during the realization of Heaven’s Gate (1980). Cimino built a gigantic set, just to tear it down for no apparent reason without the studio’s approval. The film became one of the most expensive box-office flops of all time.
The Telegraph reported that Michael Mann’s Blackhat, starring Chris Hemsworth, was the biggest flop of 2015. Bringing in only $4.4 million at the box office, the film had a $70 million dollar budget, and only made about a quarter on its budget back after its release.
Box-office failures are worrisome, as they can lead to severe financial pressure placed on studios. According to Business Insider, Warner Brothers fired 10 per cent of its workforce after Man of Steel failed to meet attendance expectations and that the worst part is that the studios don’t seem to realize what they are doing wrong— the majority of movies scheduled for release in summer 2017 have a budget of over a $100 million.
Graphic by Thom Bell