{"id":72521,"date":"2015-08-10T15:23:01","date_gmt":"2015-08-10T23:23:01","guid":{"rendered":"http:\/\/www.lukeford.net\/blog\/?p=72521"},"modified":"2015-08-10T15:23:45","modified_gmt":"2015-08-10T23:23:45","slug":"how-do-you-make-money-from-making-movies","status":"publish","type":"post","link":"https:\/\/lukeford.net\/blog\/?p=72521","title":{"rendered":"How Do You Make Money From Making Movies?"},"content":{"rendered":"

Comments to Steve Sailer<\/a>:<\/p>\n

* This falls nicely into iSteve\u2019s classification scheme for things that are easy to predict but boring, vs things that are hard to predict but exciting. The hard-to-predict things are usually the outcome of a contest among near-equals \u2014 what stock is underpriced, who will win the US Open, what lane will get me fastest to the toll gate.<\/p>\n

Mass-market movies are like that; every single one that gets a hearing at a major studio already represents someone\u2019s strenuous effort to please the market. It can\u2019t be easy to outguess that first-round group of experts, in a second round of experts, much less by a machine.<\/p>\n

An example of the easy and boring kind of problem is: do we put $100 million into a movie about Albanian ditchdiggers, or into \u201cStar Wars IX\u201d.<\/p>\n

As for high-tech help with the hard kind of problem, I\u2019m skeptical. What\u2019s the most important factor for a comedy: is it funny? Well, machine intelligence is nowhere near the point where it can figure out what\u2019s funny, so if you insist on classifying comedies by computer, you\u2019re going to have to feed in \u201cfunniness\u201d as an explanatory variable in your model. And since for that you have to turn to a human, well, your whole problem is finding the right human; might as well stop right there and chuck the computer program.<\/p>\n

* Steve, you are correct that using Excel for anything more complicated than a page or two of number calculation is a big red flag that people don\u2019t know what they\u2019re doing. At least use R if you don\u2019t want to pay SAS a lot of money, there a lot of resources for it and it does Monte Carlo sims to the millions very well.<\/p>\n

BUT: Relativity Media failed because Kavanaugh failed to grasp what makes studios money:<\/p>\n

A. Television in various ways.
\nB. Toys, games, merchandise and rides at theme parks
\nC. US and foreign box office.<\/p>\n

TL:DR version: its having cable carriage revenues not picking winners and losers in movies that makes studios money. Kavanaugh failed to grasp this fact and acted like he was Jack Warner in 1938.<\/p>\n

Goldman was flat out wrong. EVERYONE in Hollywood knows deep down that movies don\u2019t really make much money. They don\u2019t keep studios afloat and haven\u2019t since the DOJ broke up studio ownership of theaters directly in 1948. People in Hollywood just don\u2019t want to admit that movies are at best a cherry on top, and provide little if any of the day to day operating revenue of movie studios.<\/p>\n

Hollywood was able to make Raging Bulls and Easy Riders and Taxi Drivers \u2026 because TV production and revenues afforded that. Yeah Star Wars and the Shark helped but the real deal was TV production. Then home video (that revenue stream is now gone) in VHS and then DVD.<\/p>\n

On Friday the LAT had a front page article on the \u201cMedia Meltdown\u201d where Fox, Disney, Viacom, etc. had stock meltdowns of around 12% average. As ESPN reported big drops in subscribers due to cable cutting. Last year, the LAT estimated, the major companies including Time Warner, Viacom, CBS, NBCUniversal, Fox, and Disney reaped AT LEAST $48 BILLION in revenue from carriage fees. That\u2019s Direct TV and Comcast paying to carry say, Fox News or Fox Broadcasting or ESPN. Which doesn\u2019t happen if consumers say some combo of cord cutting, over the air broadcast, and ROKU\/Netflix\/Hulu can fill their entertainment needs.<\/p>\n

Kavanaugh and Relativity went bust because he was fool enough to think that movies were the main money makers. EVEN IF he had hit singles and doubles every time out with every movie, he still would have gone bust. He would not have had that TV carriage revenue stream providing his near-risk-free operating cash to make big hits or misses.<\/p>\n

I will caveat this by saying that franchises that sell:
\n1. Disney Princess fantasies and merchandise to little girls make money. Frozen being a great example. \u201cDiversity\u201d Disney princess fail big time.
\n2. Superhero and Giant Monster Movies make lots of money selling toys to boys. \u201cPacific Rim\u201d flopped in the US but sold so much world wide toy merchandise a sequel is in the works.
\n3. One hit wonders like Avatar don\u2019t generate much ongoing revenue. You\u2019ll notice a Pacific Rim sequel is already filming IIRC, but there is no Avatar movie sequel. The latter\u2019s story, actors, situation, did not lend itself to little boys in Asia and the West pestering their parents for a Space Marine as a Captain Planet Cat toy.
\n4. General animated movies with characters kids love make tons of money off toys and merchandise: \u201cMinions,\u201d LEGO movies, etc.<\/p>\n

Kavanaugh *MIGHT* have made money in 1938 had he been able to time-travel and use computers there for quant analysis. Certainly you can say that there HAS been entirely predictable (people know a lot, they just won\u2019t admit it) successes and failures in say, Superhero movies are pretty easy.<\/p>\n

Marvel wins most of the time by casting solid to excellent actors as leads, giving them a good to great supporting cast, good scripts, decent enough effects, and telling fun, upbeat stories for the most part. DC mostly fails by having bad actors, worse scripts, worst directors, and grim, depressing stories that don\u2019t move anyone particularly boys pestering for toys.<\/p>\n

I suspect the easy money that allowed Hollywood vanity projects and stuff like Bridesmaids (which was likely mildly profitable but not excessively so) will vanish as people cut the cord as cable\/satellite costs rise and alternatives get easier and cheaper.<\/p>\n","protected":false},"excerpt":{"rendered":"

Comments to Steve Sailer: * This falls nicely into iSteve\u2019s classification scheme for things that are easy to predict but boring, vs things that are hard to predict but exciting. The hard-to-predict things are usually the outcome of a contest … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-72521","post","type-post","status-publish","format-standard","hentry","category-hollywood"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t