Will 'Paranormal Activity' Teach The Movie Industry A Lesson?

from the Blair-Witch-wannabes dept

I have to admit I don't usually like scary movies, and I didn't like the Blair Witch Project at all. But I can't help but be impressed that the Blair Witch movie cost just $60,000 and pulled in a cool $140 million back in 1999. That kind of return makes me wonder why more movies aren't filmed on really small budgets. So it's somewhat surprising to see that it took about a decade for another Blair Witch-like film to get promoted by a major studio... and that a perfect candidate was almost missed. The movie Paranormal Activity was apparently filmed for just $11,000 over 7 days, and it was bought by DreamWorks/Paramount -- which originally planned to shelve the low-budget flick and re-make it with bigger stars and a much higher budget.

Goodman also admitted that DreamWorks, formerly a leg of Paramount co-headed by Steven Spielberg, had swooped in and pocketed 'Paranormal Activity' with every intention of leaving it on the shelf and remaking it with a big budget and marquee stars. Then they wised up. 

They wised up indeed, and they also started promoting this movie in an interesting way, too -- by getting potential fans to demand it be shown in their neighborhoods and nationwide. Paramount promised to distribute the movie nationwide if a million requests for the movie were logged via Eventful. And it looks like they've already reached that goal.

As I said, I didn't like Blair Witch very much, and I'm not exactly looking forward to this movie, either. But from a pure business angle, it seems a bit shocking that movie studios wouldn't be trying to find/create more low-budget films that would appeal to moviegoers. Promoting the distribution of films in a way that actually target fans is a smart move, too. So with this example, there are about a million customers (or at least thousands, if you don't believe the Eventful numbers) willing to pay to see this movie that was made for (much) less than a $1 per fan -- and the movie studio's first gut-instinct was to try to re-make the film and drive their own costs up? It's a strange industry where insiders are always asking "how can we make a $200 million movie?" rather than how can they make good, but profitable movies, no matter what the cost. The industry seems so focused on what movies cost, that it so rarely seems to consider spending money more intelligently. Creating quality works for less, and targeting your best customers is a plan that's foreign to Hollywood, but perhaps it's about time they start exploring that plotline.


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  1.  
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    scarr (profile), Oct 13th, 2009 @ 12:06am

    District 9 wasn't quite as shoestring, but had a low budget too, and earned multiple times what it cost to make as a result. Meanwhile, 2012 looks like a 200 million dollar joke. Good writing and a unique take will generally make a good movie. The extra stuff only works in service to the story, not instead of it.

     

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    Michael Long (profile), Oct 13th, 2009 @ 12:30am

    Unions

    Unfortunately, Hollywood is another industry that let itself be taken over by unions. When you can't even move a light stand 6" without waking up a 75$/hour union grip something's very, very wrong with your industry.

     

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    PaulT (profile), Oct 13th, 2009 @ 12:35am

    Sadly, it's unlikely that they'll do anything of the sort. In 1999 both Blair Witch (which I loved, but I'm a hardcore horror fan) and The Sixth Sense were both massive successes on low budgets with only one "star" between them (Bruce Willis, who took a massive paycut to get the movie made).

    What Hollywood took out of that was stupid twists and PG-13 ratings for a progression of insipid ghost stories (until the "torture porn" subgenre became popular as a reaction), while independent producers spoofed Blair Witch to death.

    They probably won't take the successes of an intelligent sci-fi (District 9) and a scary and innovative independent movie (Paranormal) on moderate and low budgets as a sign that these are popular and saleable genres. They won't see that at least "stars", $200 million and remakes are unnecessary. Instead, they'll probably say "oooh, aliens and ghosts are popular, let's make 50 dumb rip-offs to cash in! Oh, and which 80s movies can we remake to save marketing costs?".

     

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    Douglas E. Welch (profile), Oct 13th, 2009 @ 12:36am

    Ego

    I spend some of my time talking to established media folks about new media. What I quickly realized is that there is a lot of ego involved.

    Big budgets are basically a matter of ego. Directors, writers, actors...heck just about anyone...never wants to work for less than their last project. If everyone is looking for bigger and bigger projects you get the cost inflation we have seen over the last 2 decades.

    Yes, lower budgets and higher earnings could benefit everyone, but the human ego is a powerful thing that often makes us do things not in our own best interest.

     

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    Liz, Oct 13th, 2009 @ 12:38am

    Hollywood is stuck in the idea bigger budget means that a movie will make greater returns. Just like in the music industry. It seems like they believe that if the production values of a music video are low, then the song itself must not be worth very much either.

    2012 looks like it'll be another "Day After Tomorrow." A lot of nice special effects and famous landmarks being destroyed with a weak plot to hold everything together. There's just so many ways you can destroy the Eiffel Tower and keep it interesting, (ID4, Day after Tomorrow, GI Joe, etc.).

    While the studios are flushing tons of revenue down the toilet, I'm seeing a lot of low budget indie and fan projects that equate or surpass much of what's been released by established companies. And all I have to do is look around on the intertubes.

     

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    zcat (profile), Oct 13th, 2009 @ 1:07am

    Who needs Paramount?

    Nasty Old People (http://www.nastyoldpeople.org/) was filmed for 10,000 euros from a private bankloan, then released under a creative commons license. I'm surprised techdirt hasn't run a story on this one already.

    I watched it last night too, and thought it was a pretty good film.

     

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    Anonymous Coward, Oct 13th, 2009 @ 1:07am

    I can't wait to get my hands on a telesync+ of Paranormal Activity!

     

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    Sheinen, Oct 13th, 2009 @ 1:09am

    Movie Buff alert - Paranormal is doing well for one reason - it's fucking awesome! Someone sat down and thought out a really good movie and planned the best way to make it.

    That's how it's supposed to be done, not 'think of a good Special Effect and some excuse to use it.'

    Fans picked up on that and demanded more of it, movie producers won't because it effectively puts them out of a job!

    If any Dave with a Camera can make a film that sells for millions why the fudge would you share that revenue with someone who tells you to add a giant spider and polar bears?

     

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    Anonymous Coward, Oct 13th, 2009 @ 1:57am

    That kind of return makes me wonder why more movies aren't filmed on really small budgets.

    LOL

    Because there are precious few concepts that can be filmed on a shoe string budget and then go on to attract a large audience.

    Hollywood wants nothing more than cheap, easily marketable films that appeal to a broad demographic. Unfortunately those films and concepts are exceedingly, ridiculously, astronomically, rare.

    But from a pure business angle, it seems a bit shocking that movie studios wouldn't be trying to find/create more low-budget films that would appeal to moviegoers.

    They tried that. The moviegoers voted with their pocket books and went to Spiderman 7 and Shrek The Fifteenth instead. As a result, most of the sub-studios that specialized in lower budget "indie" fare are now gone. Paramount Vantage, Warner Independent, Picturehouse etc. Even Miramax, the one time poster child for these sorts of things, is balancing on the brink of disaster alongside it's blood brother, The Weinstein Company.

    You are not suggesting to Hollywood anything it hasn't already tried.

    The "independent revolution" that everyone was so sure was just around the corner with the advent of cheap digital video equipment and processing -- never arrived. Anyone that was holding their breath in anticipation is now dead.

    Even if the equipment were free, the talent is still rare.

    Hollywood is stuck in the idea bigger budget means that a movie will make greater returns.

    Big budget "event films" DO have the best odds of making the biggest returns. You make it sound like they're on a snipe hunt, lol. Go look at the box office top 100. It's 99.9% big budget blockbuster and big budget Disney/Pixar/Dreamworks cartoons.

    If any Dave with a Camera can make a film that sells for millions why the fudge would you share that revenue with someone who tells you to add a giant spider and polar bears?

    "Any Dave" can't. Very, very few "Daves" can. Talent will never be democratized.

    I do hope that one day a "Dave" will refuse the studio's offers and release his low budget blockbuster independently through the internet. More than likely it would put an end to a lot of the idealist nonsense you see around here or at least make it harder to say with a straight face...

    But I would love to be proved wrong. Obviously it would be in "Dave's" best interest to cut the studios and middlemen out entirely and release it himself. Unfortunately, there's no proof of that being a realistic scenario anytime soon.

     

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    Peet McKimmie (profile), Oct 13th, 2009 @ 2:02am

    Re:

    "There's just so many ways you can destroy the Eiffel Tower and keep it interesting"

    Two words. "Team America". Awesome.

     

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    Doctor Strange, Oct 13th, 2009 @ 2:05am

    I'm not sure what the new idea is here. It's not like Paranormal Activity and The Blair Witch Project are the only two low-budget or independent movies to make huge (relative) returns in the last 10 or 20 years. Clerks? Juno? My Big Fat Greek Wedding? Crouching Tiger, Hidden Dragon? Napoleon Dynamite? Slumdog Millionaire?

    The idea that popularity isn't directly correlated with production cost isn't new either. Survivor ushered in a decade-long deluge of reality TV shows that is still going on today. I see these shows as sort of "TV junk food" compared to the fine dining that is the greatest show ever to air on a TV set, LOST. I hope there's still a market for precedent-setting big budget TV like that in the future, because I would give away every reality show on TV and sell Ryan Seacrest into slavery for another season of LOST.

    The trick with all of this, of course, is to have your returns far exceed your production PLUS marketing budget. If I recall right, marketing budgets for The Blair Witch Project substantially exceeded the production cost of the film (but were still dwarfed by the monster box-office returns). Viral and word-of-mouth marketing are good, because they let the crowd do your marketing for you. The best is when your word-of-mouth marketing creates a train of hype with momentum enough to barrel through the actual mediocrity of your product, as with Blair Witch and Snakes on a Plane.

    The real difficulty, I think, is that nobody's ever quite figured out the trick for predictably manufacturing the perfect storm of budget, product, and marketing. You think nobody in Hollywood ever thought "hey, let's make a really fantastic low-budget movie that we only have to spend $1M marketing to get a $300M box office?"

    Right now, there are probably dozens of amazing independent and low-budget movies sitting on shelves or going direct-to-DVD that will never really "catch on." There are lots of marketing dollars being thrown at movies that will never recoup those dollars. There are marketing firms designing extensive "viral marketing" campaigns that will never reach anything like a critical mass. Even with hindsight, it may not be possible to answer the simplest of questions: "why?"

    Just "make a great movie" doesn't really explain it, since you can make crappy movies that are nonetheless tremendously profitable (*cough*Titanic*cough*). There have also been many great movies (big and small budget) that seem to have had quite a bit of trouble even breaking even. It's unclear that Donnie Darko, despite being widely known, ever made a lot of money (according to Box Office Mojo, it didn't in theaters although it may have in DVDs). Primer one of my favorite movies and with a similarly confounding plot, was made for an unbelievable $7000 and many years of the life of its Writer/Director/Star/Producer/Composer/Editor. Yet it's unclear that it was ultimately very profitable either after you factor in marketing, the cost of prints, etc.

    Luckily it looks like there is still some room for big and small budget films, and unluckily some good films will get overlooked and some terrible films will be huge successes.

    But none of this is new to Hollywood. If you can come up with the magic formula that lets you reliably construct profitable movies, you'd be the first in a very long litany of people who have tried.

     

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    Kevin, Oct 13th, 2009 @ 4:01am

    Re:

    Love the Kevin Smith reference. And no, I'm not that Kevin.

     

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    Anonymous Coward, Oct 13th, 2009 @ 5:01am

    Mike, you once again are focusing on the wrong spot, trying hard as heck to blame hollywood.

    The reality? For $1 or for $100 million, the important part of the game is the story and how it resonates with the people who will watch that movie. Waterworld was the most money for nothing, where as a movie like Clerks was not much money at all but it resonated with a fan base.

    It's not about money, it's about stories, and there are so few good stories out there that Hollywood is down to remaking old movies because they have more confidence that a rehash movie with resonate with more people than some random film.

    Dreamworks bought this movie not for the movie, but for the idea, the script, etc.

    Movies and music both have reached a point where many feel that "everything had been done", and it gets harder and harder to come up with anything original.

    It's easy as hell to pin the greedy tail on the Hollywood donkey, but that just isn't the case. Cost isn't the key.

     

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    Anonymous Coward, Oct 13th, 2009 @ 5:25am

    I heard that Saw was shot for like eighteen bucks and a latte over a 30 minute period.

     

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    chris (profile), Oct 13th, 2009 @ 5:46am

    Re:

    Hollywood wants nothing more than cheap, easily marketable films that appeal to a broad demographic. Unfortunately those films and concepts are exceedingly, ridiculously, astronomically, rare.

    and this is why hollywood is doomed.

    a generalized product, with a large budget and targeted at a large audience, will get downloaded on a large scale because everyone knows about it and it's easy to find.

    lower budget films targeted at smaller groups of people dedicated to the film's success will more easily turn a profit due to the lower budget, AND not be downloaded on as large a scale because it doesn't appeal to that large of an audience. if the audience is really excited about the film, they may also buy merchandise associated with the film.

    there are a handful of blockbuster event films i go see every year, mostly big sci-fi/fantasy releases with my friends or cartoons with the kids, so there is no reason to stop making those films. but for every dark knight or watchmen, there are a hundred other movies that my friends and i don't want to gamble on. we'll either wait for it on netflix, or just download it.

     

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    NullOp, Oct 13th, 2009 @ 5:59am

    Movies

    Hollywood is not interested in movies that make money. They are ONLY interested in "blockbusters" which make mega-bucks. They are a perfect reflection of the business world where profit is not enough, we must have obscene profit.

     

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    John Fenderson (profile), Oct 13th, 2009 @ 6:06am

    Re:

    "there are so few good stories out there"

    Ummm, so wrong. There are tons and tons of really good stories out there.

    "that Hollywood is down to remaking old movies because they have more confidence that a rehash movie with resonate with more people than some random film."

    That's right on the money. It's about risk. There are a ton of great stories, but it's not always easy to tell which of the great stories will have mass-market appeal. The low-risk approach is to do what worked last year.

    The problem is this: if you're spending hundreds of millions of dollars on a film, you must have great mass-market appeal to make a profit. The risk is enormous. So the intelligent thing to do is to remake already proven sellers.

    What Mike is getting at here, I think, is a complete reframing of thought. If you put up a few tens or hundreds of thousands of dollars instead of millions, the impact of a loser is lower, so the risk is lower. You'd be able to actually make movies that use the unproven, but great stories that are out there. You could even make great movies that -- although wonderful stories -- appeal to particular niches of interest rather than the broadest possible audience. You could even make many more movies per year and mitigate your risk over more titles -- a bit like book publishers do.

    "Movies and music both have reached a point where many feel that "everything had been done""

    If that's the case, then those people need to leave the industry because they have become far too myopic to do any more good. All they can see is what they've already seen. The music field alone is rife with more novelty and excellent innovation now than at any time I can remember except, maybe, the '50s. It's just not happening in the traditional "industry."

    It's never true that "everything has been done" (except insofar as "there is nothing new under the sun" -- but there's always a new way to do the old things.)

     

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    Mechwarrior, Oct 13th, 2009 @ 6:07am

    Re:

    Id like to point you to District 9 and Cloverfield. Id also like to point you to GI Joe and American Godzilla. Make your own comparison.

     

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    Anonymous Coward, Oct 13th, 2009 @ 7:09am

    Re: Re:

    I was going to mention cloverfield as well. It shows that you can shoot a movie around big topics like destroying a city on a reasonable budget.

     

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    Jason, Oct 13th, 2009 @ 7:18am

    ITS GREAT!!!!!!!!!!!!!!!!!!!!

    I got sucked into the hype of the blair witch project and was extreamly let down. But this movie Paranormal activity has to be one of the best movies I have ever seen. You pretty much forget that there are only 4 people in the whole movie. The acting was horrible but that was ok because it was supposed to be a "true story" so it is almost like you or me working a camera and being ourselves. There were moments where you could tell they were acting but for the most part this was a great movie. I would love to go see it again. I must say that the lack of big buget special effects and lack of cast lent a air of realism to the movie which only made it even scarier. If you can I would go see this movie.

     

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    Jupiter (profile), Oct 13th, 2009 @ 7:37am

    I want some pie

    The reason everyone wants to make $200 million movies is because there's $200 million to go into everyone's pockets. Nobody cares if a low budget movie is a hit because most people in the business don't get paid from profits - they get paid upfront. The profits only go to a handful of people and to the studio coffers. A $200 million movie keeps a lot of people working.

    And the problem with the whole indie film movement was that it got bought by Hollywood. All the good talent sold out to make big budget action and comic book movies, and the studios locked up all the distribution channels with their indie arms, which are now being shut down since they have such a firm grip on who gets to watch what movies and when. Making indie movies was just their way of getting into the business - it wasn't a business by itself. Napoleon Dynamite might have been an indie hit, but it was Fox and Paramount that distributed the movie, and they likely nabbed a lot of those profits. The money didn't go to making more indie films.

     

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    Coughing Monkey (profile), Oct 13th, 2009 @ 7:40am

    oh i dunno could it be that after making a ton of money wouldn't you want to use the latest high expense toys to be a little more creative? granted money does not take the place of talent (creativity) but look at all those expensive car brands some are very nicely done while others are so high priced only a very few may appreciate them when other cars are sold for far less and the owners seem to be having as much fun driving them. films can be seen the same way, some are so full of different meanings you can only catch them all by viewing the same film over and over a few times. this takes talent beginning at the pencil and a sheet of paper (for us old school types). i've been working on how to make a film spending the least money possible and am amazed when i see what others do with so little compared to those who spend so much and get so little in return (talent wise). i know someone must be laughing all the way to the bank.

     

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    Marc, Oct 13th, 2009 @ 7:49am

    Re: Movies

    Hollywood is not interested in movies that make money. They are ONLY interested in "blockbusters" which make mega-bucks. They are a perfect reflection of the business world where profit is not enough, we must have obscene profit.

    Not only that but I'd add that this must happen within approved distribution channels. Control the creatives at one end and control dissemination at the other end. Mostly, it's all about control.

    It's easier to pump 200 million productions from a handful of players to 3000+ screens than it is to allow indies to showcase works to 300-500 screens. The last thing they want is for the creatives to think they don't need the majors in order to show their works. So, they buy and shelve until the creative has signed the 'right' deals with them. Otherwise, it stays shelved.

    They haven't managed to outright kill the indies but they are getting there. More of them are falling into the investment banking big budget production model that a limited release requires.

    Again, nothing gets into the multiplexes without first paying the piper err... major studios. Once, you understand this then the rest is what is called a barrier to entry.

    Much better for all if a 200 million dollar production breaks even than to risk losing the marketplace to those commie creatives. Next, you'll expect them to retain rights and offer variable pricing.

    Sheesh!

     

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    Marc, Oct 13th, 2009 @ 7:57am

    District 9

    District 9 only saw the light of day because Peter Jackson wanted the original film maker to make it. It was a 20min short which was going to be turned into a much bigger production involving big name talent. Thankfully, Jackson was able to avoid that fate by simply agreeing the bankroll it.

     

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    Dave (profile), Oct 13th, 2009 @ 8:28am

    Crowded marketplace

    While I agree with some of the sentiment, there are some serious holes. There can be room for both big and small movies but not all of either. You couldn't replace one $200,000,000 movie with 500 cheap films and expect them all to do well. Nor could you eliminate all the small films and release ten $1 billion movies a year. There is a limit to the size of the total marketplace. This also varies seasonally. You may attract a few more tickes one year for good movies, or lose a few to other entertainment.

    Another thing to take note is how few of the big budget films are in the same genre as Paranormal. Budgets north of $30 million are rare for horror films these days.

    Also someone mentioned that Hollywood tried and failed the small movie thing. I disagree. The small movie arms of the big companies were done for PR. They were all gambling on prestige films to win big with critics and academy awards. Blair Witch, Paranormal Activity, Clerks, and Pulp Fiction appealed to viewers before they were told to like them by critics.

     

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    Anonymous Coward, Oct 13th, 2009 @ 8:28am

    Re: Re:

    Sorry, I have to disagree.

    What does Techdirt stand up for? A movie made with older blues music. Remix and mashup artists. Ignoring patent and copyright. By those standards, pretty much everything had been done, and all that is left to do is remix it, repaint it, rename it, or mash it up.

    There are very, very few good stories out there. There are plenty of stories, but very few good ones, and certainly even fewer that coudl easily be converted to the big screen.

    Even fewer of them could be done for a very low budget. Heck, even the "Paranormal Activity" movie would cost a ton if it was done just paying scale to everyone. The only way movies are made cheap is when everyone does it for nothing. Again, it's another one of the common threads around Techdirt, the concept that you can replaced paid professionals with unpaid amateurs and get the same product. It just isn't true, there are hundreds of crappy amateur movies made every year that nobody would want to see. A couple of good ones a year are perhaps best classified as exceptions that prove the rule.

    Remember, technically, we can all build our own houses, we can all catch and cook our own food, we can build and maintain our own cars. Most of us are wise enough to let the professionals do it, and pay them for it.

     

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    Captain Kibble (profile), Oct 13th, 2009 @ 9:00am

    Will it teach them a lesson?

    No, of course not. Instead we will have an extended period of piss poor knock-offs of 'Paranormal Activity'. Most of which will have 10x the budget and be 1/10 as good. The knock-offs will continue until one knock-off doesn't make a profit or Hollywood catches on to a new fad.

     

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    John Fenderson (profile), Oct 13th, 2009 @ 9:03am

    Re: Re: Re:

    Well, we disagree on everything, it seems -- even down to what Techdirt stands for!

    Ignoring patent and copyright? Not what Techdirt stands for. Unpaid amateurs producing content identical to professionals? Not what Techdirt asserts at all. Trying to get stuff without paying for it? Not Techdirt's position.

    Although, we agree that "amateurs" (what do you mean by amateur, anyway?) produce hundreds of crappy movies a year, with only a few gems, I would also assert that "professionals" have a very similar track record. Most "professional" movies (and music) are complete crap. Some are very good, and a few are excellent.

     

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    lux (profile), Oct 13th, 2009 @ 9:03am

    Seriously?

    Will 'Paranormal Activity' Teach The Movie Industry A Lesson?

    No. Absolutely not. Not everything can be marketed virally. Moreover, Hollywood would fuck it up if they tried.

     

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    John Fenderson (profile), Oct 13th, 2009 @ 9:06am

    Re: I want some pie

    "Nobody cares if a low budget movie is a hit because most people in the business don't get paid from profits - they get paid upfront."

    True, and it's a tremendous shame. I think this fact alone goes a long way to explain the dismal state of the movie industry.

     

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    PaulT (profile), Oct 13th, 2009 @ 9:19am

    Re: Re: Re:

    "There are very, very few good stories out there. There are plenty of stories, but very few good ones, and certainly even fewer that coudl easily be converted to the big screen."

    The only way you can truly believe that is if you stick to the homogenised crap churned out by Hollywood as "blockbusters". There's plenty of great original stories being told, they just don't get to show at the multiplexes on the same scale as 80s remake #1265 and generic romantic comedy #84547.

    I'd counter that there's actually very few stories that need over $100 million to tell, and that most can be told for less than $40 million. If Hollywood stops spending $200 million to tell a $50 million story, there will be less problems and hopefully more District 9s in our future.

     

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    John Fenderson (profile), Oct 13th, 2009 @ 9:28am

    Re: Re: Re: Re:

    "most can be told for less than $40 million."

    ... and should be. In my years as a (successful, thank you very much) enterpreneur, I've learned one or two things. One of which is that having too much money available is more harmful than having too little. It skews your view and leads to an inferior product.

    Nearly all of the movies I consider excellent story-wise have been relatively low budget ones. Many of these have already been mentioned. Primer, Pi, District 9, Cube (the original, not so much the sequels,) and etc. Primer lacked terribly in terms of production values -- but the story was so fantastic that it didn't matter.

    If any of these had been made with a large budget and big-name stars -- i.e., given the "Hollywood treatment", they would not have been nearly as good.

     

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    PaulT (profile), Oct 13th, 2009 @ 9:30am

    Re: Movies

    The funny thing about that is that it's utterly counter-productive in many ways.

    For example, Paranormal Activity is listed on boxofficemojo.com as already having made $9 million, from an initial budget of $11k. Even allowing $2 million for prints, advertising, etc., it's made back over 4x its costs already. Generally speaking, studios get back approximately 55% of the final gross, so the movie will have made a 2-300% profit even if it fails to take any more money, and that's virtually impossible now. Given the largely positive reaction from audiences, it's likely to have a good run on DVD after the theatrical run, meaning even more profit. I doubt it will be as successful as Blair Witch (which grossed $140 million domestically on a $60k budget), but there's no doubt that it'll make back many times its cost.

    District 9 was a moderately budgeted sci-fi movie with a budget of $30 million. It's made back $115 domestically so far, so it's almost certainly in the black with 55% net revenue even before international sales are factored in. Positive fan reaction means DVD sales will probably be strong. Investors will probably make back several times their outlay.

    On the other hand, let's look at one of this year's more "successful" blockbusters, Transformers 2. The movie had a production budget of $200 million and has made $405 million domestically. Given the 55% figure above, the movie would only just be breaking even domestically. But, the movie also had such a marketing blitz before its release that it'll probably only just breaking even with international revenue. The film also had a lukewarm audience reaction, so DVD sales may be disappointing. Remember, this is one of the *more successful* blockbusters. For every Dark Knight, there's several movies like Meet Dave ($11 million on a $60 million budget) or Land Of The Lost ($49 million on a $100 million budget).

    It's a strange way of thinking. On the one hand, you have smaller movies that are capable of making back several times their outlay without a huge amount of effort (and gold to be had for a rare phenomenon). On the other hand, you have studios willing to bet $200 million + marketing + distribution in an industry where the biggest-selling product of all time (Titanic) only made $600 million domestically. Yeah, there's incredible profits to be had if you're lucky, but most aren't.

    I understand the mentality of gambling for higher profits, but this is what's so frustrating as a non-American movie fan. I get restricted from seeing the movies when I want to (Up has only just been released over here, for example), despair at the obvious crap that's being released instead of movies I want (I have to wait till February for Ponyo, but a remake of Fame is out already? Joy...), then have to endure "waaah! piracy!" when they bet on the wrong horse.

     

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  34.  
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    Allan Masri (profile), Oct 13th, 2009 @ 10:35am

    Shoestring budgets

    It should be noted that films made on a shoestring budget are a product of the Hollywood mythmaking machine. However much a movie may have cost originally, by the time it gets to the screen in your local cineplex, millions have been spend on remastering the original film, adding sound effects, dubbing in dialog, and hyping the film that cost "only $60,000". Wikipedia estimates Blair Witch cost $500,000 to $750,000 to make (including post-production), and $25 million to promote. Film companies are understandably reluctant to spend that kind of money promoting what are basically home movies.

     

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  35.  
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    Stephen, Oct 13th, 2009 @ 10:44am

    down and dirty pictures

    I would highly recommend Peter Biskind's "Down & Dirty Pictures," which shows the popularization of indy films in America, starting with "Sex Lies and Videotape" and focusing largely on Miramax. It demonstrates two things: one, you can make a movie for a few hundred thousand dollars or less and with the right marketing push bring in several million, if not much more. It's the story and the marketing that make it. The other lesson is, if you're dealing with Miramax at least, get as much money up front as possible because you won't be seeing any down the line however well the movie does.

     

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  36.  
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    Michael Ho (profile), Oct 13th, 2009 @ 11:07am

    Re: Shoestring budgets

    But I think the point is... it shouldn't cost $25M to promote a film anymore. And as technology gets better, the quality of "home movies" gets better and more professional-looking.

    And ultimately, if you assume the odds of success for a movie is relatively constant -- wouldn't you want to try to lower costs instead of betting "big" all the time?

     

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  37.  
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    hegemon13, Oct 13th, 2009 @ 12:00pm

    Box Office

    Another interesting thing you didn't mention in your article is that it hit #4 in the box office last weekend, while it was still on limited release of 160 screens! $7 million in one weekend (almost $50,000 per screen) with no costly TV advertising and a movie that cost $11,000.00. I'm sure the 85% on rottentomatoes doesn't hurt anything, either.

    I DO love horror movies, and I did like Blair Witch. This looks interesting, though I won't let the hype inflate my expectations. I intend to see it tomorrow night, as much for curiosity as anything.

    It's amazing to see how far something like this can go on pure word of mouth. If the studios would focus on quality rather than dollars spent and connecting with fans rather than spending millions on TV-advertising campaigns, they could be a lot more profitable. And, for once, quality would float to the top. Everyone would be better off.

    Let's hope Paranormal Activity has taught the studio a valuable lesson.

     

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  38.  
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    Alan Gerow (profile), Oct 13th, 2009 @ 1:19pm

    Re: Re:

    "Literally! A giant spider. And I didn't get it at the time because I still lived in Jersey. Now I live in Los Angeles, I get it. Spider's a good idea. Wasn't then. But I was young." - Kevin Smith, Comic Book: The Movie

     

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  39.  
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    Michael Ho (profile), Oct 13th, 2009 @ 3:07pm

    Re: Crowded marketplace

    I agree that the marketplace for movies should include both "blockbusters" and "indies" -- there's a whole spectrum of movies that can exist. And to some extent, I think that TV shows will cross into the film industry more and more... as the production value of TV shows are getting closer and closer to movies...

    Youtube serials will eat into the TV show market, and TV shows will eat into the movie market.. The technology and costs of production are getting cheaper, and so the market for visual content expands and grows.

    I seriously think that animated films are going to be the next big thing as more story-tellers figure out how to use cheap animation to bring plotlines to audiences.

     

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  40.  
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    Anonymous Coward, Oct 13th, 2009 @ 10:30pm

    Re: Re: Shoestring budgets

    The problem is that right now you are looking at "free" advertising methods that won't stay free forever. If social video sites like Youtube become the dominant way to reach fans, they will just start charging for airtime. Suddenly, the 25 million dollar TV and radio budget becomes a 25 million TV, Radio, and social media budget. There are only so many eyeballs, and whoever happens to control a signficant number of them at any time almost always ends up charging for them.

    Free today doesn't mean free tomorrow.

    if you assume the odds of success for a movie is relatively constant

    It isn't. Fairly crappy movies with no visual effects, no stars, and little beyond being a movie is still a crappy movie. A crappy hollywood blockbuster with special effects, name stars, and a high end musical score including hit song support will do much better. There is no indication anywhere that the odds of success are equal.

    Making a basically incorrect assumption pretty much blows the rest of the deal out the window.

     

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  41.  
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    Michael Ho (profile), Oct 14th, 2009 @ 12:57am

    Re: Re: Re: Shoestring budgets

    Fairly crappy movies with no visual effects, no stars, and little beyond being a movie is still a crappy movie. A crappy hollywood blockbuster with special effects, name stars, and a high end musical score including hit song support will do much better. There is no indication anywhere that the odds of success are equal.

    It depends on how you define success. Crappy movies with no budgets won't lose much money. Crappy movies with HUGE budgets are financial disasters for the producers.

     

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  42.  
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    nasch (profile), Oct 14th, 2009 @ 8:09am

    Re:

    2012 looks like it'll be another "Day After Tomorrow." A lot of nice special effects and famous landmarks being destroyed with a weak plot to hold everything together.

    Day After Tomorrow had a plot?

     

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  43.  
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    TrevorAMueller, Oct 14th, 2009 @ 10:18am

    Paranormal Activity

    I wasn't a fan of the flick at all. I keep reading all these great things about it, but it made about as much sense as Transformers 2.

    However, I will admit that it had some good scary moments in it.

     

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  44.  
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    Pretty, Oct 14th, 2009 @ 1:03pm

    Am I the only one that thought Paranormal Activity was drab, boring, and a waste of $10 (so glad this was a "date" movie and i didnt pay for it)... I was bored from the time it started until the last 30 seconds of the movie. id much rather spend (waste) money on a horror movie spoof (i.e. scary movie). Paranormal was a HUGE disappointment. i should have just waited for SAW 30 (or whatever number this one is). Everyone kept saying how scary it was, but now im starting to think they were paid actors. I believed so much that it was going to be so horrifying that when it started, i asked my date if we could leave and see another movie, after half an hour i was asking if we could see another movie because i was completely bored and detached... i mean am i REALLY the only one that feels this way?

     

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  45.  
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    PaulT (profile), Oct 15th, 2009 @ 1:19am

    Re: Re: Re: Shoestring budgets

    "If social video sites like Youtube become the dominant way to reach fans, they will just start charging for airtime."

    On what, exactly, are you basing this assumption? Any proof or just a blind assumption that everything has to be charged for directly? Even if they stop being free for professional applications, they're likely to be cheaper than traditional media.

    "Suddenly, the 25 million dollar TV and radio budget becomes a 25 million TV, Radio, and social media budget."

    Isn't what they should be doing now anyway? Spending the same money on 3 major advertising tactics rather than 2 seems like a no-brainer to me...

    "Fairly crappy movies with no visual effects, no stars, and little beyond being a movie is still a crappy movie."

    A fairly crappy movie with a big budget, lots of stars and little beyond being a movie is still a crappy movie. The difference is that if that movie costs $200 million, they have a lot more to lose than if they spent $20 million.

    "A crappy hollywood blockbuster with special effects, name stars, and a high end musical score including hit song support will do much better."

    ...but the risk is higher. If you produce a movie on the cheap and it fails, it will probably recoup its losses eventually on the DVD and TV markets. Larger failures cause massive problems and can bring down entire studios - look at what happened with The Golden Compass, which killed New Line just a couple of years after making massive profits with the Lord Of The Rings trilogy. A lower budgeted movie would not have put the studio in any danger.

    On the other hand, a non-crappy low budget movie with no stars and no visual effects can clean up at the box office if correctly targeted and made (e.g. My Big Fat Greek Wedding, Blair Witch). It might be more difficult as it can't fall back on the eye candy and stars that the "blockbusters" do when they're crappy, but it's far from impossible.

     

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  46.  
    identicon
    Des, Oct 15th, 2009 @ 2:50am

    45 pounds to make a horror movie

    There's a British Zombie movie that begins with a D. Cost 45 pounds to produce.

     

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  47.  
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    Michal Chick (profile), Oct 15th, 2009 @ 12:15pm

    Re:

    I think you are really missing the point here. "Because there are precious few concepts that can be filmed on a shoe string budget and then go on to attract a large audience." If the objective is to make movies that ALWAYS target the broadest audiences then you have to make movies with broad appeal, and what you say makes sense. So, the more people that MUST see a movie, the fewer topics/stories you can tell because (despite what marketeers try to sell us) the human race is not homogenious and there are very few things that EVERYONE wants to see. But new technologies are blowing that concept out of the water. Our kids hang out at sites dedicated to Nascar racing games. Hard core liberals get their news from the Huffington Post. People are recording Mad Men and then watch it in their hotel rooms 3 weeks later using Slingbox (fast forwarding commercials in the process). The trend for people to get their entertainment from more niche-like sources is increasing, not decreasing. And the good news is that research suggests that targeting smaller niches is more successful in turning eyeballs into action, which is what advertisers really want after all. "Big budget "event films" DO have the best odds of making the biggest returns. You make it sound like they're on a snipe hunt, lol. Go look at the box office top 100. It's 99.9% big budget blockbuster and big budget Disney/Pixar/Dreamworks cartoons." That statement is flat out false. People voted with their pocket books but the real ROI for these big budget movies can be horrendous. Hollywood (and you) often confuses big revenue for big returns. Spider-man 2 had a worldwide gross of $783,766,341 but cost $200M to make and probably had a marketing budget of $200M-$300M. So maybe the studio will make 2.0-2.5 times its investment with VOD, video rentals, etc. Now compare that with the ROI Paranormal Activity has already generated (assuming Paramount spent a couple million on marketing the return just in theatres is already 5X without ancilary revenues). So a smart business man would think, if I can make 500 smart smaller movies and target them well, I can take lots more risks, but my overall returns will be much higher. Practically every other business in the world understands this. Even venture capitalists don't take their $500M funds and invest them in one company; they make lots of little investments with the hope that even if only a few of those are successful, that their shareholders will benefit greatly. But part of the problem that few people address is that the major players in Hollywood/TV also control the means of distribution (theatres and broadcast and cable TV). Getting small films into theatres is becoming increasingly impossible because the screens are held hostage to the multi-picture deals signed with the studios (we'll give you Spider-Man 5 only if you also take Jennifer Aniston's next bomb). It is, and always has been collusion and our government looks the other way. But even this is beginning to crack as theatres see their attendance dropping - movies today seem to make more money than yesterday but it's only because theatres continue to raise ticket prices and those days are coming to an end with our "permanently-in-recession" economy. So allowing more screens to show good, independent/small studio starts to be more attractive to theatre chains as well. And lastly, the film pricing model is broken. Inflated actors salaries, expensive tradecraft, cameras, editing suites, and technology that is rented for practically the cost to buy many times over, even catering costs that can be double the costs of renting limos and driving the entire crew to Fleur De Lis - all cause the cost of a film to become astronomical very quickly. The cottage industry that has grown up around the excesses of film and broadcast TVis about to see a grand-canyon style crack in its business model. The business model for film and television production is broken but all the people who are driving their Bentleys and having business lunches at The Roosevelt are loath to give up that lifestyle. But the writing is on the wall, or more aptly on Facebook and YouTube.

     

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  48.  
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    Kafluke (profile), Oct 16th, 2009 @ 5:20pm

    Sweeeeeeeet

    I really enjoyed the movie. First to creep me out in a long long time. Wasn't perfect but hollywood left perfect over a decade ago when they sold their soles to the CG devil. So hard to find an enjoyable movie with some substance.

    Am I the only one that feels sick in the stomach with Michael Bay-ish "blockbusters" like Suckformers 2 or the new Friday the 13th. They should call that brand "startlers" cause you never think about the story afterwards or shit your pants when your 35 year old house starts making noises and you can't sleep.

    Crap! I'm taking extra sleeping pills tonight!

     

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  49.  
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    Jennifer (profile), Oct 17th, 2009 @ 6:08pm

    .Paranormal The Movie

    Another movie that is coming out that offers a clean alternative is ‘’Paranormal.’’ Below is some additional information about this new thriller!!

    Paranormal, the latest supernatural thriller from Cross Shadow Productions, (the
    creators of the Dove.org approved, best-selling BMG releases: Pray and Pray 2:
    The Woods) will be available in stores nationwide January 26th 2010. The 2009 Mrs. America is starring in it.

    See more information and trailers at:
    www.ParanormalTheMovie.com

    Following the success of family-friendly suspense/thriller The Exorcism of Emily
    Rose (Sony Pictures), comes a riveting supernatural thriller in the vein of the hit
    SyFy television series, Ghost Hunters and Frank Peretti's House (Roadside
    Attractions / Lionsgate).

    Paranormal follows best-selling, self-made novelist Greg Evans struggling through the worst case of writer's block in his award-winning career. In a desperate search for
    inspiration, Greg quickly finds himself immersed in a world he is not prepared to face.
    Turning to a group of paranormal investigators, Greg and the ghost hunting team search for proof and answers, yet are unaware they are about to have an experience of a
    lifetime! None will leave the way they came. Paranormal will peel back the supernatural curtain to reveal how The TRUTH will EXPOSE the darkness!

     

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  50.  
    identicon
    Treana Smith, Oct 25th, 2009 @ 5:20pm

    This is why

    The reason these movies are so successful and awsome is the fact its not smothered with all the special effects and fat head actors. The people are fresh and the film seems so believable because of these things. I adore Indie Films. I truely hope there are more to come. And hopefully next time they won't get ripped off with such crappy pay-offs. I mean come on, 350,000, Paramont new they were gonna bank, they should have paid more than that.

     

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  51.  
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    John, Oct 27th, 2009 @ 6:58pm

    Re: ITS GREAT!!!!!!!!!!!!!!!!!!!!

    Jason- I feel sorry for you if you consider this movie "the best movie" you have ever seen...especially after pointing out it's faults. You have either never seen another movie before, or you are under 17 years old...or your head is on backwards. I am not commenting on the movie because I haven't seen it, BUT "The Best Movie I have Ever Seen" does not have any faults in it.

     

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  52.  
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    Deb A, Oct 28th, 2009 @ 1:11pm

    Re:

    Y'know, I agree with you that Hollywood is getting lazy with the 'rip-off' movies. I have news for them, scary isn't blood,guts, and porn. The scary movies of the past frightened you shirtless by NOT showing everything and letting the audience's imagination fill in the scene. Oh, wait, I forgot, today's audiences have let their imaginations atrophe and are lazy. They want the movies to BE their imaginations. No wonder we as a people are in a downward spiral!

     

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  53.  
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    Jason Betts, Nov 4th, 2009 @ 6:34am

    Good movie. During the day this movie is hilarious...but at night things change.

     

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  54.  
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    Chase, Nov 4th, 2009 @ 6:35am

    Re: UR GAY

    fagot.

     

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  55.  
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    Jimmy, Nov 4th, 2009 @ 6:35am

    Re: Re: UR GAY

    YUP

     

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  56.  
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    Roberta Lopez, Mar 2nd, 2010 @ 2:42pm

    This movie is such a load of crap it is worsed movie I have ever seen, it is a total rip off.
    If I could have done it I would have asked for my money back.
    I think people should be warned what type of film this is before hand,it was terrible!!!!!!!!!!!

     

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  57.  
    identicon
    Roberta Lopez, Mar 2nd, 2010 @ 2:45pm

    This movie is such a load of crap it is worsed movie I have ever seen, it is a total rip off.
    If I could have done it I would have asked for my money back.
    I think people should be warned what type of film this is before hand,it was terrible!!!!!!!!!!!

     

    reply to this | link to this | view in thread ]


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