Friday, November 30, 2007

The Golden Figure

Next Wednesday sees the opening of the main tentpole film of the Winter/Christmas period: The Golden Compass. In previous years this position has been fairly profitable for the high profile and high advertising budgeted (see: half the Harry Potter films, Lord Of The Rings Trilogy, King Kong, Narnia, Casino Royale) and Compass is no different. Except for one particular oddity: Nobody in Hollywood is expecting it to make a profit in the cinema.

According to it's director, Chris Weitz, the budget for The Golden Compass is around "the 220 million dollar mark". This figure is for the production alone and does not include the cost of advertising and the amount of money it takes to produce the thousands of 32mm prints for distribution to cinemas. So, the final magic figure for New Line Cinema (it's production company) is somewhere in the region of $350 million. Of course, the film will easily make that amount in worldwide box office receipts after about 2 weeks, but a good deal of it will go to the theaters for their operating costs and their own profit. Therefore, The Golden Compass will need to make between $800 to $900 million until New Line actually sees any profit. This doesn't really make any sense (as it's not going to make anything near that amount in theaters) until you consider DVD sales and TV syndication deals.

New Line is expecting the current DVD market to snap up The Golden Compass, to make enough money to push it into that profitable realm and be the deciding factor in the question of further sequels. It's thinking like this that makes current blockbuster budgets appear to be astronomical (see Spider-Man 3, Transformers, Pirates Of The Caribbean) when, in fact, they are pre-approved as an investment in DVD sales.

The current Writers' Strike is is sign that all is not well with this system. Writers (and soon directors and actors unless an agreement is reached) feel that producers are reaping the benefits of DVDs which have come swiftly with the dawn of the product (and so swiftly that the WGA had neither the time nor the inclination to renegotiate contracts) while they get minimal returns themselves. It's fair (and right) to say that writers deserve their slice, but the issue of money is hiding another, more strange fact.

If blockbusters are expected to finish their run in cinemas with an overall loss, then it's reducing a theatrical release to an advertising campaign for DVD. Now, this is not the case for most of the films currently released on these shores and Hollywood has shown signs that they are budget conscious with some potential blockbusters, Cloverfield for example. But it remains a fact that as the opening weekend figures for The Golden Compass come in that, unless it's a total failure, the studio heads will barely take any notice.

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