George Lucas Announces The Death Of The $200 Million Feature Film

from the good-for-him dept

Back in April, at the Cato Institute conference on copyrights, someone in the audience from NBC Universal challenged both myself and Professor David Levine from UCLA on how the movie industry could keep making $200 million feature films in a world where copyrights were less stringent (or non-existent). The response, of course, is that he’s asking the wrong question. Why focus on the cost of making the movie? It’s like a mainframe maker asking how they can keep making million-dollar mainframes as PCs become more and more powerful. The answer is that you don’t keep making $200 million films, but figure out how to make films for less. That means embracing technology that makes moviemaking, distribution and promotions much cheaper, while also recognizing that the value of star power (which is extremely costly) is greatly overrated. While the folks at NBC Universal may not like that, it does seem like some big moviemakers are recognizing the trend. John points us to an interview in Variety with George Lucas, where he discusses why he won’t be making $200 million movies any more, saying that they’re just too risky. Instead, he can spend the same amount of money making a lot more video for TV or for online. While he doesn’t discuss ways to make quality films for less, he’s clearly realized that the market is changing — and it’s changing in a way that will make him produce more content, not less. That’s important, since the assumption from the NBC Universals of the world has always been that, if they can’t make $200 million movies, the world would have a lot less content. Looks like that assumption isn’t holding up either.

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Comments on “George Lucas Announces The Death Of The $200 Million Feature Film”

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Sidebuster says:

Re: $200 million stereotypes

The artists paint the picture and let the viewer decide what it means. Of course it is a film and you can also take it for what it is and not look too deaply into the films.

That said, George Lucas has always been some what of a Indi outsiders. Sure he has his StarWars movies that made him a rich bastage, but remember he quit the directors guild because they didn’t like the idea of starwars. everyone told him it was a crappy idea. Except Fox that is (i forget if it is 20th century fox).

gb says:

Re: Re: $200 million stereotypes

The fallout with the directors guild was not over the plot of Star Wars, but rather that the directors credit was at the end of the movie, and not at the beginning as the guild dictated. As a member of the guild, George was fined. GWL paid the fine, and then quit the guild.

Also, Fox didn’t get the whole Star Wars concept and they weren’t thrilled with it either. Studio Exec Alan Ladd Jr. was the one who had GWL’s back and helped get the movie produced.

YouKnowNothing says:

Re: $200 million stereotypes

Errr… “A long time ago in a galaxy far, far away”…there was no Earth, no Arabs, no Hindus, and no Africans….and no Americans, no Europeans, and no Asians.

Really, dorpus, the quality of your trolling has plummeted precipitously lately. C’mon Big Guy, you can do better than that!

dorpus says:

Re: Re: Re:Trolling for $200 million stereotypes

You’re right, my heart hasn’t been into Techdirt lately — between taking 4 courses in grad school, having had a midterm yesterday, having 2 emotionally needy girlfriends, and posting on other forums that are more exclusively Asian, I don’t put as much energy into here anymore. Sorry.

Dam says:

From The Mind That Gave Us Star Wars

Like him or hate him, one has to recognize what Lucas has done for the film industry. His THX model finally set a standard for the movie going public that the collective industry never gave a damn about. He brought visual effects and quality sound into the 21st century before the end of the 20th century. He is a filmmaker who embraced technology, not ran away from it.

If he thinks the day of the $2MM movie is over, the Hollywood lemmings should pay attention to him. They will fail to do so at their own peril.

Malux says:

Lucas will now stop using special effects in every shot thereby cutting the movie’s cost in half. In another brilliant cost-saving move, all movie charachters will be of the non-cg human variety thereby bringing the cost of a movie well below the 200 million

This should leave some money for other aspects of a movie like plot and dialog. We can only hope. Maybe one day we’ll even get Star Wars episode 1.5: The Apology.

Frank says:

Re: Plot, Acting more important that special effects

This should leave some money for other aspects of a movie like plot and dialog.

That’s my hope … focus less on where you can squeeze in another special effect and get back to trying to make us care about the characters.

In the original Star Wars trilogy, you actually cared about the main characters. The second trilogy, you keep hoping for the main “protagonist” (Anakin) gets killed (or at least just shuts up). If they weren’t so focused on the special effects, they could have realized that the Anakin actor(s) were screwing up the film.

Butchering a greatline: Don’t be too proud of this technological terror you’ve constructed. The ability to dazzle the eyes and ears is insignificant next to the power of a good plot well acted.

Anonymous Coward says:

Re: Re:

QUOTE: “Yeah… look how sad his last few movies have been when he’s had tons of $ and time to spend on them. Now he’s going to start slapping stuff together faster and cheaper… and that’s going to be good??”

YES! The very reason Episodes 1-3 weren’t very good was the fact that when you have unlimited time and money at your disposal, you don’t make creative decisions. You make expensive ones.

Episode four rocked BECAUSE of the financial limitations and creative problem solving involved. Oh, and there was a decent script too, but to be honest, it wasn’t much better than the others.

Narco Tom (profile) says:

Lucas is no longer the prophet

In love with the sound of his own voice and convinced that no one could write a proper Star Wars prequel trilogy, Lucas produced 3 of the most ponderous, hard to watch and un-StarWars-like movies in the short history of modern movies. I’m talking about Episodes I,II and III.

Makes one wonder if the original trilogy would have been nearly as good, nearly as magical, nearly as successful, if George had all the money he needed to produce them the way he wanted back in the 1970’s.

Is it his age, his bankroll or is he just another “one hit wonder” that makes him irrelavent today?

mike says:

one should stop and wonder if it is the film, the director or even the amount of money being thrown at them that really makes the difference, maybe it’s the audience that makes the money worth the directors efforts and the producers $200m. I say who cares how much money is put into it. If it’s crap well then it’s crap and anyone who sees it knows it.If a big name actor charges millions to star in it and it’s crap who looks worse for it?
The bottom line being if you like the movie thats your OPINION and nobody has to agree or disagree and if you don’t well at least you have an informed opinion.

G-Man says:

Star Wars - the debate

In my youth, I watched the Star Wars movies (Episodes 4, 5, and 6) and worshipped all things Star Wars. When Lucas announced he was doing the prequels, I was worried – but not like the rest of the skeptical world out there.

I was worried that with the advances in technology and all that we had seen in film to that point (just before episode 1), we would not get to see anything new. I was also afraid that the public would reject anything that would come out with the Star Wars name on it.

Well – the public suddenly fell in love with the concept that it was fashionable to bash all things Star Wars.

I can go back now and watch episode 4-6 and can see similar flaws that people whine about in the newer movies. The story is constant – so arguments about the story/plot are pointless. Terrible acting for the star/focus of the movie – that’s nothing new. Try to go back to Star Wars: A new Hope and put up with the whiney Luke Skywalker.

Now I am not one who goes back and slaughters those movies for that. Remember, when I was a kid – I loved everything about those movies. Heck – I even followed the Mark Hammil train on through the terrible TV movie that was Corvette Summer. I watched the terrible ewok movies to follow the trilogy. It is what it is. When I saw episodes 1-3, I remember the feeling that the films brought when I watched 4-6. I had the same feeling with 1-3. Today, people focus too much on the negative and find it quite fashionable to bash Star Wars.

I am over it. People who claim they are original Star Wars fans but cannot stand the new ones are contradicting themselves in my book. Once a Star Wars geek – always a Star Wars geek .

yeah...bash it! says:

Re: Star Wars - the debate

G-man – If you really like it, then that’s all that matters.
But you’re argument, in similar ones, don’t hold water for me.
The new movies were forced pieces of tripe, trying too hard to be the old movies. All the effects and the nice, glossy finish couldn’t save the character portrayal. The original actors put on a performance like old Star Trek: over acted and almost campy. The new actors tried to act like that, and it came of as stiff, forced performances. They should have performed like new Star Trek actors.
The other big killer was the story line: The clones were all Jango Fetts (sic)? Why? And why Jar Jar Binks? No, he is not analogous to the Ewoks: they tried hard to beat the bad guys; Jar Jar accidentally fumbled his way to being a general! And the story did not need to go back to Darth Vader as a kid. That left far too much material to cover in three movies.
Now, how about Hardware Wars? That was a movie…

Clifford Edward VanMeter (user link) says:

$200 Million Movies

There will always be a spot for the premium. From custom cabinets to designer clothes, to $200 million movies. It should be interesting to watch over the next few years as lower budget, indie movies embrace alternative distribution methods. It could actually make for a less crowded theatrical release market. paving the way for a new generation of blockbusters to become the premium content.

The truth is, if Hollywood and the big theatrical chains were to embrace this, rather than fight it, we might see a new golden age where movies stayed on screens longer, and the theater-going experience was valued as unique from watching a movie at home. Yes we’d probably pay something more like what people pay for tickets to a Broadway play, but it could be worth it if theaters and movie makers worked together to make the experience as high-end as possible. Like that restaurant where you go and spend $100 for two people on your anniversary.

They need to remember that market share isn’t as important as return on investment.

PhysicsGuy says:

But will the 15 year old Demo

see, the problem is a large majority of the video games nowadays have more plot than 90% of the movies YOU would consider good… scratch that hypothesis of yours, got anything else?

also, i’d like to point out on the starwars thing… despite the lousy acting, the third movie is pretty good.

dorpus: girls who are friends shouldn’t be called girlfriends. the word girlfriend implies more than girls who are just friends there bud… 😉

Yume says:

Star wars geeking

I have to disagree with you G-man. I loved the original trilogy as they were an important part of my childhood. I went to see the new movies with an open mind and heart.

I was disappointed. Badly. The magic was gone. Stolen away with too much flash and not enough wonder.

I wanted a regal young queen, and a dashing young ace who could win her heart and mine. I wanted to meet this person that Obi-wan spoke of with great fondness, years later, as his friend. I wanted to know what terrible thing could fracture the fairy tale and create the person we knew as Darth Vader.

Instead I got a sullen, surly brat that, in my opinion, did not live up to the legend that he would become. He and Obi-wan weren’t friends, they could barely stand each other. And we got a lot of wooden acting from Natalie Portman. They had no chemistry, none at all. I don’t see her potential death as the reason Anakin went to the dark side. It was the weak excuse of a weak soul that didn’t have the will to stand on his own.

It was disappointing, because it could have been so much more.

jovie won (user link) says:

whether or not Lucas followed his own advice as soon as he recognized is insignificant next to the force of his observation. The sisters of income – high budget movies and star power – are no longer going to secure top box office success.

And if the movie industry is not seeing that, then it makes sense that we should take note of Lucas’ observations. The reason? He has been a consistence source of movie making innovation across the board. Individuals who would rather dismiss him because the pre-quel failed to meet 20 years plus of anticipation, have basically ignored Lucas’ observation.

I think its an important observation, and they couldn’t have used a better movie maker to state it.

Anonymous Coward says:

$200M buys a lot of TV

One thing Lucas is right about is the profit margins (and less risk) of dumping $200M into TV instead of a single movie.

$200M is enough to produce 3 seasons of a fairly expensive one-hour TV show (as long as there aren’t Friends-like star salaries).

Start with what the network pays you for first run rights. Then, with $40-50 profit per DVD set, you can recoup most of the production cost. Add-in a syndication/re-run deal, and, it’s a lot more likely that you turn a profit than on a single $200M movie.

getoverit says:

You're full of crap.

The first three movies were contrived and cliche… well, not cliche since they actually invented those cliches. The acting was questionable. The “alien” characters were hokey. The plot was simplistic. The plot included topical allegory that could be interpreted various way. And they were excellent movies.

The prequels were exactly the same way. They reused the old cliches (which is okay since they were Lucas’s cliches to begin with). The acting was questionable. The plot seemed a little contrived. The characters were hokey. The plot was less simplistic and a little more emotionally charges. They plot included more modern topical allegory that could interpreted various ways. And they are as good as the originals.

You deluded if you’re a member of the “the new movies are nothing like the old ones!” crowd. You just don’t want to admit that what you took so seriously as a youth seems contrived and trite to you as an adult, so you don’t want to admit to yourself that the prequel trilogy is of the same ilk as the original. Just get over it, don’t take it so seriously, and just let it be what it is: an excellent series of six movies.

Tauren... Its what's for dinner (user link) says:

Re: You're full of crap.


Even my kids (6 and 3) refuse to watch the first two movies.

They love 4-6 and will watch 3 when they are bored. I think the only part they “Actively” watch is the light sabre battles tho.

I bought the episodes 1 and 2 with the expectation that my kids would like them (with those damn kiddie chars inserted) more. Turns out I was wrong.

Joey says:

Missing the point.

the whole point is to FORGET that Lucas even mentioned this.

Good movies can be made dirt cheap, with just talented writers, actors, directors, and editors. In fact, it has been done for a long time.

Hollywood has a mentality, though, of “if it didn’t cost a lot, it isn’t any good”. SO, they spend hundreds of millions of dollars on crappy “Shotgun target audience” movies, and figure if they spend a ton of cash on special effects, get big name movies, and can pay extra for some Boobage (especially from Big name women), they’ll get their investment back.

Will Hollywood change this train of thought? most probably not.

The End

Tashi says:

That’s why Tom Cruise got fired. Jumping on a couch and talking about other actors… if that’s all Tom Cruise did he’s a choir boy.

Tom was getting paid his 20-25 mil as the star. He was getting a producer salary AND he was getting part of the gate. He was just making too much money for the executive’s tastes, and despite still making money, the drop in sale of MI3 made them tired of seeing Tom getting that sizable amount of grip. Basically Tom’s movie made less money, but Tom wasn’t making less money because he got his money up front. Actor’s salary, producer’s salary and his percentage of the gate, while studio had to sit back and wait and see what their cut was gonna be. I would’ve fired his ass too.

If Tom is really profitable, he’ll form his own company and put his money where his mouth is.

Anonymous Coward says:

Chris Tucker getting $20 mil and part of the gate in North Amerca and Jackie Chan (a much bigger star, ironically) gets $15 mil and distribution rights in Asia for Rush Hour 3. So out the gate, this movie has already cost $35 million and the camera hasn’t even started to roll yet.

It won’t approach $200 mil, but over $100 for sure. But it’s a good bet RH3 will make its money back. The director is back, the writer’s are back so it should do well.

Questioner says:


Since I asked you the question at the CATO event, I have it on good authority that you are wrong about the question you were asked.

I was responding to your assertion, also made by Prof. Levine, that copyright protection for movies was unnecessary because movie makers could adopt the open source software model and sell services rather than the movie itself.

My response to your assertion asked how it would be economically rational for a movie creator to invest in creation of a movie, like the $150 million+ invested in creating King Kong, Narnia, or Lord of the Rings, if the absense of copyright protection meant the creator could not prevent free riders from performing, distributing, and reproducing the movie.

You responded that the movie makers could still sell the theater experience, and sell DVDs with extra features. I did not have the opportunity at the conference to do so, but now take the opportunity to discuss why your answer makes no sense.

The theater part of your answer utterly fails to take into consideration that (1) movie makers are prohibited under established anti-trust cases from owning theaters; (2) even if movie creators could own theaters, the absense of copyright protection would create a free rider problem, since the movie creator/theater owner can not compete with free rider theaters that could profitably charge far less for admission because they had not invested millions in the initial creation; and (3) very few movies, ESPECIALLY LESS EXPENSIVE ONES, turn a profit during theatrical release, and thus need a DVD, PPV, VOD, and TV window to recoup costs.

Your assertion that movie creators could still make a profit by selling DVDs with extra features (Director’s cuts, Unrated versions, behind the scenes) suffers from the same flaw. Namely, without copyright and anti-circumvention protection, any competitor can sell the same DVD WITH the extras at a far lower price than the movie creator, who must recoup the initial investment in the movie AND the extras.

Prof. Levine’s answer to my question was even more flawed. He positied that the mainstream movie industry should just follow the model of the pornography industry and make far cheaper movies. Apparently, he would be just as happy seeing some $100,000 version of King Kong, Narnia, and Lord of the Rings filmed with people in rented costumes jumping around a backyard in Van Nuys. However, the vast majority of movie viewers actually want to see the $150 million versions filmed in New Zealand and on painstakingly crafted sets, using state of the art CG technology, and employing hundreds of skilled actors, stuntmen, carpenters, costume designers, engineers, musicians, Foley artists, etc. Furthermore, he was wrong to say that the pornography industry doesn’t rely on copyright protection to prevent free riding. The case law is rife with examples of pornographers suing to prevent infringement of their movies.

So, my question was directed at revealing the fallacy of the economic model you proposed, not a defense of big budgets for films. (Movie studios have the same economic incentives as any other market actor to keep down their costs.) The fallacy in your argument applies as equally to a movie that costs $2 million as one that costs $150 million. Why would someone invest $2 million in creating a movie if free riders could sell all the potential services (theatrical experience, DVDs with extras) for less than the creator? The more rational economic decision is to go into the free rider business, and wait for someone else to be stupid enough to invest in making a movie.

Glenn T says:

Just what are monopoly rights worth?

So just what are monopoly rights worth? My guess is between 0% and 500%, but more generally around the order of 100%. That is, if a product would make $x with no monopoly rights it will make between 0% and 500% more than $x with monopoly rights.
It is so often implied that monopoly rights produce 100% of returns, and this is patently false. Monopoly rights increase the returns, and I would hypothesize that this increase is often very little. People go to movie theatres for the experience and for a night out. They will continue to do that. So long as honesty is maintained and studio approval is noted people will pay the 10% of the ticket price to see approved movies. With a blockbuster like Lord of the Rings this may involve ensuring that every moviehouse in the country has access to approval to show the movie, so that overflows into non-approved theatres are minimized. It means that the timeframe between theatre release, DVD release and TV release may be shortened. This is simply an adjustment in the business model.
The key question is why do governments provide a mandated monopoly to distort the market to increase these profits. It is providing a government mandated subsidy of hundreds of billions of dollars to companies in particular industries. It distorts the market, this money would otherwise flow to different industry segments.
Life would go on and a group of 3 year old girls singing happy birthday in public parks would no longer be subject to arrest or harassment from the RIAA.

self proclaimed geek says:

we are all twenty years older

I loved the first movies. I didn’t know anything about cgi or movie making. I did know that all the sci fi movies I had seen had crappy special effects and I could almost always see the wires. When I saw Ep 3 I was glued to the screen. I has visions, daydreams of one day owning a laser pistol and trying to invent the light saber in my spare time. I even dressed up as Luke one Halloween.

But that was a different time. Movies then were not made with the sp. effects that Ep 3 had in them. They made improvements and innovations over what was made at the time. This explains the failure (or what some people call a failure) of Ep. 1-3. This also explains why kids today don’t like them either. No new cutting edge innovations in special effects were used just regurgitations from existing movies. I mean really after the resurection of the dinosaurs into living breathing actors in Jurrasic Park there’s nothing left to be made wondrous to the viewing public. Also with the added technological advances that we have now days kids today aren’t as impressed with a computer/communicator on someones wrist. They haven’t quite got there in real life but they are really close. Sorry Dick Tracy your no longer needed.

I admit that there is more advancements being made in special effects and maybe someday I will wonder again at how they did that. But for now, I am not wondering anymore. CGI has killed the childhood wonder in me and every movie that comes out with million dollar special effects just looks like a really well made video game to me.

Yes, I agree that the acting and characters in Ep. 1-3 were seriously lacking and really the movies were just like, catching people up with the back story. Maybe as I have gotten older characters and plot is more important to me. I wish they would have spent 20 minutes with the back story and just made new movies with new stories and new characters. Then maybe they would have endeared themselves to the new audience instead of pandering to the old.

Jeff Noaln (profile) says:

$200m crappy films

There is a big difference between making a $200m great film like Lord of the Rings and a $200m shitty film like all the new Star Wars episodes.

Yes the market is changing, but Lucas’ version of the franchise film with all the respective merchandising and whatever wasn’t working either and that should inform his decision more than anything else.

While I agree with you that the formula is changing, this story is really more about Lucas’ formula.

SunKing says:

Follow that car driver... and step on it!!!!

The industry is hugely bloated and could easily be scaled down with little to no loss of quality. For instance, the simple use of smaller cameras and smaller film, dwarves and children on stilts could cut costs by as much as 74.6279%. Also, charge people double to see the movie a second time. It’s their own fault, they should of paid more attention the first time.

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