The Economics of a Hollywood Blockbuster

May 8, 2012 in Daily Bulletin

Ben Morris took a look at the economics of making a Hollywood blockbuster film:

  • These days a big-budget film is a movie that costs at least $200 million to make.
  • If your movie is based off of a book then you might have to pay $2 million for rights.
  • Directors can charge up to $10 million and may demand some of the film’s profits.
  • Actors can charge up to $20 million.
  • Filming location matters. If you film in New York City your costs will be higher than if you film in a rural area. Filming at night requires elaborate lighting and thus is more expensive than filming in the day.
  • A standard film will have production costs of around $500,000 a day. This will be substantially higher if you want special action sequences or CGI.
  • An original pop song from a famous artist will cost $1 million.

To read about why studio chairmen can’t always approve big budget films, how much it costs to hire a script-writer, why New Zealand is an attractive filming location, the amount of money that movies make from in-flight entertainment, and how much money is made through DVD sales and rentals, click here.

Source: BBC News