Hollywood blogger David Poland has a good summary today of an MPAA ShoWest presentation on the negative and marketing costs for theatrical releases, which are once again on the rise after a brief remission in 2004 and 2005. The average negative cost on a feature released by an MPAA-member studio in 2007 was $70.8 million, with an additional $35.9 million in marketing expenditures, for a total of $106.6 million. Sounds like a lot, but what Poland zeroes in on is the average cost cited for releases from the quasi-independent specialty divisions of the same big studios (we’re talking now about the likes of Warner Independent and Fox Searchlight): $49.2 million, with a marketing spend of $25.7 million bringing the total to $74.8 million! The numbers seem to show that the gap between the studios and their “indie” divisions â€” at least in terms of budgets â€” is closing fast.
That kind of spending would also seem to open the doors, once again, to low-budget productions that can leverage their efficiencies against the costs incurred within the studio structure. Interestingly, the other stat Poland picked out has to do with just that. As recently as 2002, MPAA-studio releases accounted for 49 percent of the total number of feature films released in the U.S. (out of 449 total releases, 220 of them were from MPAA signatories). But in 2007, that number was 30 percent (just 179 of a total 590 films).
The numbers also show a general upward trend in the total number of releases over the last few years, from 474 in 2004 to 590 in 2007 â€” is it driven in part by the easy availability of affordable acquisition technology? And do low-budget, (truly) indie films have a better or worse business model if they have to duke it out with an ever-increasing number of competitors for their share of the box-office-and-home-video pie?
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