I saw Meet the Fokkers this past week. It was exactly as I expected and as the previews/reviews suggested. That’s not to say you will not like it, I just thought there were only a couple of jokes and most of them were recycled in spirit or explicitly from the first movie.. My question is how much did something like that cost to put together? According to the estimation at IMDB, they say the studio spent $80 million on it, and it has taken in $80 million in date (for the math/budget challenged, they just broken even, though it is still in wide release).
Setting aside the fact that the budgets for these movies tend to be really blown out of proportion and wildly inaccurate because they use the budgets to hide a lot of other movie studio expenses, I feel like there should be another way to make movies. Actually, I think most media production today suffers from the same problem. On one hand you have a massive growth of media that has occurred in the past ten to twenty years. It seems trite to mention it, but the fundamental difference between the 3 channels available in 1980 and the roughly seven hundred available today cannot be overstated. This change has happened nearly every where in popular culture. Five big budget movies a year have now become twenty. Twenty new big label records a year have now become two hundred. And so on.
The problem I think Meet the Fokkers suffers from is that the studio basically made a bet by investing in what they consider to be a known quantity vs. all the other things they could have invested in. The choices a given studio makes seem to be because these industries seem optimized for these large budget releases. I know there are a lot of very savvy business people working there, but I wonder why a company has not come along to optimize for many small releases over the large ones. Even if a movie, for example, is massively successful, it will take in $150 million. Assuming it’s not My Big Fat Greek Wedding it’ll probably cost on the order of $50 to $75 million to make giving a profit of $75 million. Assuming they had four other pictures that were released which broke even and one which bombed (made 50% of its budget back), that gives you a total allocated budget of 5 x $75 million = ~$400 million to make ~$520 million, about a 20% return on investment. Not bad!
But think of all the dollars tied up in those movies. If the industry was optimized for smaller releases, wouldn’t it be easier to make a much higher profit? For example, instead of 5 total releases, imagine if they had 20 total releases, each with a budget of $20 million. Now these movies only have to do $24 million in business to get the same return on investment. If there are three stinkers out of the bunch the total risk the company is exposed to is much lower, considering they have invested less in those three movies combined than in one big budget stinker. Alternatively, it requires much less money to be qualified as a runaway hit (does twice the budget or more).
Of course, this only covers half of the problem, and this is not novel thinking by any stretch. There are endless other factors that need to be brought in… such as the effectiveness of publicity tours, actual marketing of the movie, the value of big budget stars and the endless other activities (in some future entry, I’d love to explore these costs further).With the new media represented by the blogsphere matures and the opportunity for more news and reviews can be distributed more broadly, I hope that these companies learn to use this extremely cheap method of awareness, and optimize their investments to letting the market decide from all the different movies what should be successful rather than a set of executives determining exactly what will appear in theaters. I cannot think of anything better than having a company release 100 movies a year and letting the ones that get the good reviews or the good word of mouth be the ones that are successful. Because, right now, with the bets that companies having to take be so large, the companies will never let the market decide anything. And what we do not need right now is another company making Meet the Fokkers.
D