MPAA study finds movies cost more than ever: Ticket buyers beware

Johnny_l
In advance of the movie industry’s annual ShoWest gathering in Las Vegas next week, the Motion Picture Association of America has released its Theatrical Market Statistics Report for 2007, which details all the basic facts and figures of the film business. The big news is that the total cost of making and releasing a movie is at an all-time high: Last year, Hollywood studios spent $70.8 million to produce the average release and $35.9 mil to market it — a whopping $106.6 mil total price tag. (The previous high was $105.8 mil in 2003.) The sums for what the MPAA calls “subsidiaries/affiliates” (ie. specialty divisions like Fox Searchlight and Miramax) saw an even bigger jump: It cost $74.8 mil to make and market the typical indie movie, up from a previous high of $62 mil in 2003. Meanwhile, the average cost of a movie ticket rose 5 percent to $6.88, the largest such leap in seven years. And remember, we’re talking averages here — the cost of a standard summer blockbuster, like a Pirates of the Caribbean movie, is much higher (usually well north of $200 mil), and theater admissions in major metropolitan areas tend to cost a whole lot more.

What does all this mean for consumers? Simple: Even more blockbuster-type releases! (And even fewer mid-range movies like Michael Clayton.)
After all, while Hollywood execs may cringe at the thought that their
costs are skyrocketing, they can comfort themselves in knowing that
that their product appears to be increasing in popularity: The MPAA
report also notes that 2007 saw nine more $100 mil grossers than the
year before; a slight uptick in the overall number of tickets sold; a
boost in the combined revenues of all hit summer movies; a 5.4 percent
increase in domestic box office receipts ($9.63 billion); and a record
total of $26.72 billion in worldwide theatrical grosses. So although
movies have gotten more expensive, they’re raking in more dough.
Big movies are what’s working right now…right?

Well, there are a few caveats here. For one thing, even as 2007’s
global grosses saw a 4.9 percent rise over the previous year, combined
production and marketing costs rose a greater 6.3 percent. Furthermore,
the domestic movie marketplace lost 200 million ticket buyers between
2002 and 2007. Then there’s the always pesky (and often forgotten) fact
that studios have to turn over a huge chunk of gross revenues to
theater owners and marquee stars. And don’t think all the bloated
numbers means that Hollywood is putting out more movies than ever,
because it’s not: 2007 boasted the smallest number of studio releases
(179) of any year this decade. It all goes to show that power players
in the business shouldn’t be so quick to congratulate themselves — but
since they’re not likely to stop, moviegoers should expect to settle in
for much, much more of the same.

What does all this mean for consumers? Simple: Even more blockbuster-type releases! (And even fewer mid-range movies like Michael Clayton.)After all, while Hollywood execs may cringe at the thought that theircosts are skyrocketing, they can comfort themselves in knowing thatthat their product appears to be increasing in popularity: The MPAAreport also notes that 2007 saw nine more $100 mil grossers than theyear before; a slight uptick in the overall number of tickets sold; aboost in the combined revenues of all hit summer movies; a 5.4 percentincrease in domestic box office receipts ($9.63 billion); and a recordtotal of $26.72 billion in worldwide theatrical grosses. So althoughmovies have gotten more expensive, they’re raking in more dough.Big movies are what’s working right now…right?

Well, there are a few caveats here. For one thing, even as 2007’sglobal grosses saw a 4.9 percent rise over the previous year, combinedproduction and marketing costs rose a greater 6.3 percent. Furthermore,the domestic movie marketplace lost 200 million ticket buyers between2002 and 2007. Then there’s the always pesky (and often forgotten) factthat studios have to turn over a huge chunk of gross revenues totheater owners and marquee stars. And don’t think all the bloatednumbers means that Hollywood is putting out more movies than ever,because it’s not: 2007 boasted the smallest number of studio releases(179) of any year this decade. It all goes to show that power playersin the business shouldn’t be so quick to congratulate themselves — butsince they’re not likely to stop, moviegoers should expect to settle infor much, much more of the same.

Comments (21 total) Add your comment
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  • Joy

    Who says that blockbusters have to be bad? Many of the greatest movies ever made hit it big at the box office. Yes, it is great to see major movie stars up on the screen, but the joy wears thin very fast if the script and/or its interpretation are awful.
    This summer will bring a ton of popcorn movies to the screen and I have already started saving so I will not miss any of them. If the Iron Man movie is as good as its trailer hints, then people will run to see it. The same with the fourth Indiana Jones, the second X-Files movie, etc. When are the Hollywood suits going to wake up and realize that big adventure family fare (with a HAPPY ending) will always make a HUGE profit? Heck, even Titanic made billions and it was SO tragic that there wasn’t a dry eye in the theater. I saw it five times!
    As long as the big movies are made well, without insulting the audience’s intelligence, people will pay to watch them. Then, the “little” artsy movies will be made too. Give me The Incredibles 2!

  • Alli

    I think it’s really sad that smaller films (and heck, ‘small film’ deosn’t even mean ‘indie’ anymore) are going to be crushed by gigantic crowd pleasers. I loved Titanic and enjoyed a couple other Blockbusters, but those films, because they need to appeal to a large audience to be successful, tend to be more bland. The studios should take also take notice to the only film this year to stay in the top 10 for more than 10 weeks and increase it’s sales after its initial release: Juno.

  • Eric Friedmann

    I used to be addicted to going to the movies. Now I have just about stopped going completely. Between the high ticket and concession prices, endless screen commercials, inconsiderate cell-phone-using moviegoers, and oh yeah, the sh*t that Hollywood is putting up on the screen, the entire movie-going activity has become more of an irritating burden than a pleasure. This year so far, I’ve only been to one movie; it was NO COUNTRY FOR OLD MEN and I went during a week night to avoid being in the theater with a lot of other people. Don’t know when I’ll go to another movie because right now, nothing on the horizon looks good to me.

  • graeme

    Blockbusters aren’t a problem.
    Just make more movies like “The Bourne Ultimatum” and “I Am Legend” and less like “Spider-Man 3″.

  • Rob Grizzly

    I agree with Joy

  • Anne

    Bring on the blockbusters. The only Oscar nominated movies I saw this year were ALL the ones nominated for best special effects and Juno. Why? Everything else promised to be violent and DEPRESSING. Give me some escapist eye candy and make me laugh please! There is a reason why dramas are a dime a dozen on TV but few great comedies manage to stick around. It’s much harder to make something really funny and smart than to make you react emotionally in a negative way ie. fright, sadness, concern. The best blockbusters are those that mix in the action with clever and funny performances ala Pirates and Indiana Jones. I like the action but it’s the humor that hooks me. I refuse to see crime, ganster, or serial killer movies– which make up a good chunk of the non-blockbuster category. Give me Indy cracking a whip and cracking wise anyday.

  • Virginia

    Cinema purists may wring their hands and moan, but it’s lushly produced, fun, action films like Pirates 3: At World’s End that bring me into a theater with 10$+ ticket prices. Why do I need to shell out for a depressing psychological study that doesn’t need a big screen anyway (and that I will only ever watch once) – in any case, I go to movies for escapism, not to see more of how the world sucks. There will ALWAYS be dedicated film creators who make sure smaller films get produced, in the meantime bring on more POTC, Transformers, LOTR, Batman, National Treasure and Harry Potter! The rest I can wait to see on DVD in the comfort of my own home (unless it’s something incredible like the recent Sweeney Todd)

  • vw

    How about half of the costs of these movies going toward salaries alone that aren’t deserved or warranted. Give me a break! I’m tired of Hollywood highjacking the movies for their own pocketbooks instead of the art of great storytelling that’s what it’s SUPPOSED to be all about. I go to a movie at the theater about once a year now thanks to the high costs involved. I wait till the movies is out on DVD to rent. That’s why I bet in the next 5 yrs everyone who’s worth their salt will be doing only indies. It’s already begun.

  • Genevra

    The problem isn’t with the making of blockbusters in itself — as others have pointed out, some are fabulous. The problem is that Hollywood is ONLY going after one slice of the pie now, the single most profitable kind, which means less diversity in our choices. It also means that more people who aren’t in the marketing “sweet spot” (teenage and young adult boys, essentially) will not get films directed to them. Which means fewer and fewer people will be in the habit of going to the movies. The number of people who regularly go to movies now is probably lower than at any point since talkies were invented, and the narrowness of the studio’s focus will not help to change that.

  • boboan

    btw, I saw this pic before on a celeb site called ‘Searching M illionaire DOtcom’! Is that fake or real?

  • jack

    who pays $6.88 for a ticket, it more than double that in los angeles?

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  • Charles

    there are still good small movies. i recently saw Smiley Face starring Anna Faris at the downtown indie movie theater and it was hilarious. of course i doubt anybody else on the planet knows about this movie, but it is proof that good, incredibly small budget films are still being made.

  • Brad

    Personally, I prefer the smaller films. There are great original films out there, you just have to seek them out. Although there are a few exceptions, most of the films that are being heavily marketed are just overhyped junk with little payoff. But, in the end, I guess I can’t complain. It keeps most of the crowds away from the films I like so I can enjoy them in peace.

  • Mike

    This article kind of reminded me of those blurbs you read sometimes that are like, “Studies show stupid kids do worse on standardized tests than smart kids.” Movies are getting more expensive, no crap. The only thing that surprises me is that the average price of a movie ticket is still under $7? Okay, it’s above $11 here in NYC, but even in my hick hometown upstate, the nearest movie theater costs $8.75 a ticket. Where the heck are prices so cheap?

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