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Comment by jsmeaton | Hacker News Reader

Maybe it'll force Hollywood to pay actors far far less. Harrison Ford was paid somewhere between 10 and 25 million (probably towards the lower end of that scale). Flipping the question a little bit, how do you justify paying actors 40 million for a movie if they're being streamed online for $5 a pop? I'm of the belief that the better actors are paid far too much and that releasing cinema to streaming services will correctly adjust the price of new release films.

For context I watched the force awakens last night at iMax (premium recliner chairs which was nice!) for $43. But you can't see a movie in Australia for less than about $23 these days. We're directly funding hollywood's lifestyle.

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> Flipping the question a little bit, how do you justify paying actors 40 million for a movie if they're being streamed online for $5 a pop?

This is basic supply and demand. Harrison Ford has a monopoly on Harrison Ford, so if you want Harrison Ford, you have to pay what Harrison Ford wants for it.

Maybe this will give all the not-Harrison Fords a better chance. A lot of the A list is about hiring tried and true great actors... but you can get 80% of Harrison Ford for much less than 80% of his current asking price.

Much like making music, filming technology is already commoditized at the entry level... it's distribution costs that remain high (hard to reach a large audience without massive ad $$, known actors, and an established publisher). Netflix would seriously disrupt that, boosting "indie" film making in the same way that Spotify / youtube / myspace / etc seriously boosted non-mainstream music. We still have A-list musicians but the long tail is seeing far more success than before.

Netflix has paid Kevin Spacey his price, anyway, so the point is kind of moot.

>> filming technology is already commoditized at the entry level

But Indie music is better in the personal preference category and usually no worse in production values. And on the other hand what we see in regular tv: we see increasing abundance of content , and most people flocking more and more to the highly rated content which usually has high production values and often some measure of high brand.

That's probably because they don't want to risk an hour of their time. On the other hand , listening to a new song ? who cares if it's bad - it's only a minute to switch to something else , and it's a social custom too.

Exactly, supply and demand. He demanded what the studio could afford to pay. If the movie is no longer generating so much revenue (because streaming) then actors will no longer be able to (successfully) demand 8 figure payments.

I think some of the low to medium budget movies will make the transition to simultaneous streaming releases where it may be easier to recoup money early on. This may or may not force a similar thing to happen with big budget films, but too many lifestyles would be affected for this to happen in any short to medium term.

If the movie is no longer generating so much revenue (because streaming) then actors will no longer be able to (successfully) demand 8 figure payments.

Pretty much what happened to authors of novels.

Were publishing companies hiring authors for millions of dollars?

I know authors usually use publishers for review / editing / publication, but I'm not aware of a time where the relationship was not "publisher gets X% cut of revenue". When was it "author gets X million dollars"?

The same applies to music. Pretty much every creative industry outside film is paying the performers or creators a percentage of sales. Its just harder for that to scale to endeavors that take thousands of people like modern blockbusters.

> The same applies to music. Pretty much every creative industry outside film is paying the performers or creators a percentage of sales. Its just harder for that to scale to endeavors that take thousands of people like modern blockbusters.

For performers, actors in plays, members of an orchestra, backup dancers behind a pop star... most are getting paid per performance or per period of time, not royalties. Royalties are more common for people who can take a majority responsibility for the end product, e.g. a solo artist or an author.

Publishing customers were at least sometimes paying million-dollar advances (which I appreciate isn't quite the same thing).

Lump sum payments are not at all uncommon when it comes to ghostwriting.

(Royalties aren't rare either, but a lump sum agreement isn't eyebrow raising in the least)

I am not sure why you are presenting reducing actors revenues as a desirable goal. Movie studios can afford to spend that much because there is enough demand for movies of that budget. What's wrong with that?

There are 2 sides to the transaction and it comes down to margins. If the margins don't exist to pay Harrison Ford $40M then either he takes less $ or another actor is found.

>Or the movie doesn't happen and we will see movies of lower quality because of that in coming years?

Hard to imagine how that would be possible...

Or the movie doesn't happen and we will see movies of lower quality because of that in coming years?

The original Star Wars did okay using no-name actors instead of paying Harrison Ford $10 million just to show up.

But they paid Alec Guinness very handsomely for his role.

Though it did do ok paying Harrison Ford to (not just) show up.

If the industry shifts to paying its top stars smaller but still large sums of money then maybe Harrison Ford won't accept that, but the best actors in the next generation who weren't used to getting paid todays rates will.

Well, I wouldn't jump so fast to the conclusion that those movies would be of lower quality.

We end up with YouTube?

What you're saying is true, but it's also interesting to me that studios could potentially get by with less.

Young Harrison Ford in the late 1970s might have been willing to trade away the use of his likeness in future Star Wars films for a relatively small consideration.

In the future, if a studio can find a relatively unknown actor who wants the work, it's possible they could do with a digitally-produced likeness, in case the original actor doesn't want the job. (Sort of an augmented version of the SNL contract)

SNL?

A long term 'gold handcuffs' deal for new performers http://observer.com/1999/08/snl-s-killer-contract/

I'm of the belief that the better actors are paid far too much

The market decides these things.

It's difficult to argue that there isn't enough profit on a movie that has grossed over 1.5 billion dollars in three weeks to pay A-list actors A-list salaries.

A-list actors don't make that kind of money because movie studios are generous. They make it because their presence puts butts in seats.

Sure, the "Star Wars" name would be enough to put butts in seats but without Ford, Fisher and Hamil, this movie would have made less money.

If I'm not being forced to pay it, I don't care what someone else makes.

Would the movie have lost more than the amount they paid him, though? I'm pretty sure they could have released a blank tape on the screen, called it Star Wars 7, and made several hundred million dollars. Its hard to approximate the amount of sales exclusively to the presence of a specific actor, versus the reviews, ratings, and social response to good acting.

Obviously, no one knows for sure but let's say that 1% of the people who went to see it would have opted out if the original stars hadn't returned...

In three weeks, that is over 15 million dollars just where it's been released so far. Think about China and the rest of Asia. Think about on demand viewing and DVD/Blu-Ray.

As I said, we don't know for sure but it's a pretty safe bet that Ford, Fisher and Hamil being a part of this movie will pay for itself in increased revenue.

> The market decides these things

Right, and I think the market is unfairly inflated at the moment, and has been for a long time. Movie ticket prices have more than doubled in the last ~ 10 years. The presence of streaming new blockbuster movies is likely to disrupt the traditional cinema if it is allowed to get off the ground.

And that's basically the point I'm trying to make. If movies were to transition into the Steam model where the cost is brought down but has higher reach, the gross is going to go down, and so should the marketing and actor budgets of such films.

> If I'm not being forced to pay it, I don't care what someone else makes.

Yes, going to the cinema is optional, no one is forcing you to go. But if you want to see a movie within 3-6 months of release you have to pay the cinema ticket price. There is no other option. I don't care how much the actors make, I care how much I pay at the ticket box, which appears to be viciously increasing cycle of actor demands more -> prices go up -> more gross is made -> actor demands more. To account for this, studios are spending more and more on advertising to get people to actually go to the cinema, further driving ticket prices up.

And it's the non blockbuster movies that are going to fail. Ticket price is $x regardless of the quality of the movie. The blockbuster budgets are going to price the smaller movies out. No one is going to pay $25 to see something they might enjoy but doesn't have the kind of budget to warrant a cinema viewing. Streaming services that offer these kinds of movies at release date I think will bring the whole scam crashing down.

> viciously increasing cycle of actor demands more -> prices go up -> more gross is made -> actor demands more.

That's not exactly how movie economics works. The script calls for a male character, 30-40 years old, good-looking as he's the subject of romantic story. The casting operation calls a few agents and comes back with data that Tom Cruise will want $3m, Ryan Philippe will want $2m, some known actor who's currently in a TV series wants $500k, or a no-name actor showing promise will do it for $80k.

It's up to the studio heads and producers to circle down on an option they consider reasonable. They are aware that a portion of movie revenues is generated by having a brand-name actor, i.e., there will be 200,000 extra tickets sold if Tom Cruise's name is on it. Tom Cruise is also aware of this dynamics, which explains the premium.

But it's also not that simple. Actors like to pretend they're in this industry for the sake of "art", not "money", which means that if you have an interesting script and an "artistic" director with a potential of making to Sundance or Cannes, you might then get a brand-name actor for essentially free (you'll have to pay some union-mandated salary). Every big name actor has this "artistic" no-budget movie in his belt, to showcase their "range" and to signal to public that it ain't about the money, which leads to more public attention and larger check for the next franchise movie, as the actor is still "hot".

If movies were to transition into the Steam model where the cost is brought down but has higher reach, the gross is going to go down, and so should the marketing and actor budgets of such films.

Why would they? Why would a studio decide to reduce their gross and therefore their net by going with a less profitable model?

Streaming services that offer these kinds of movies at release date I think will bring the whole scam crashing down.

No more than Honda and Toyota put an end to the "scam" of American automakers.

One party providing a service or product at a specific price and other parties choosing to purchase or not purchase it is not a scam.

> Why would they? Why would a studio decide to reduce their gross and therefore their net by going with a less profitable model?

I don't think the bigger ones will in the short to medium term. But if the gross is lower, then they're also paying less to actors and marketers (streaming services will "freely" market what they think will be popular titles), reducing the overall budget, and reducing the risk profile. The studios themselves may end up making more profits. In any case, that's why I mentioned the smaller budget films transitioning to such a streaming model may force the bigger ones to follow suit.

> No more than Honda and Toyota put an end to the "scam" of American automakers.

Scam was the wrong choice of word here, but do you understand the point I'm trying to make? A similar analogy that works in my favour is Steam as a distribution channel, undercutting physical disk distributors. Games became a lot cheaper, but the AAA titles still ask for and receive quite a high price comparatively.

I don't think the bigger ones will in the short to medium term.

At some point, in the distant future, it's likely that movie distribution will be radically changed. PPV and streaming from day 1 but that's highly unlikely.

For that to happen, alternate means of distribution would need to be more profitable for the studios than the status quo. If movie attendance drops enough that it will bring in more money to partner with Netflix, Hulu or some as of yet uninvented streaming service; then and only then will it happen.

We already have the straight to video model for small budget films and Mockbusters. For those, it makes sense. They are made on limited budgets because the producers know that there's never going to be a theatrical release and the target market is very narrow.

There's also the wrinkle that digital projectors have lowered the cost of releasing a film. There are no longer film prints to produce, quality control, deliver, track and pickup.

It might happen one day but no time soon.

A similar analogy that works in my favour is Steam as a distribution channel, undercutting physical disk distributors. Games became a lot cheaper, but the AAA titles still ask for and receive quite a high price comparatively.

I can't help but notice that GOG came along and started selling classic games at even lower prices than Steam and ever since, I have seen some excellent Steam sales.

What you're describing already exists: television.

I'm not worried about actor salaries. Big budget epics cost lots of money to make outside of actor salaries because hundreds of professionals work on them for years, usually on location.

I guess I like a world where a $300 million Lord of the Rings trilogy exists. It's not necessary but I like it.

> Maybe it'll force Hollywood to pay actors far far less. Harrison Ford was paid somewhere between 10 and 25 million

Probably a bad example, because the studio's investment in Harrison Ford in SW:TFA will surely be repaid many times over, and isn't really threatened by netflix.

Of course it will, because of really high ticket prices and they're providing a product that many people want. If ticket prices were lower though, Ford wouldn't be able to ask for that kind of money. Not many films can generate this kind of demand though, yet we're all stuck with high ticket prices for lower quality films.

For some sources on Harrison Ford

Variety claims 10 - 20 million http://variety.com/2015/film/news/harrison-ford-star-wars-pa...

Sydney Morning Herald had an article says that it would be $34 million if it breaks $1 billion gross earnings (which is likely). http://www.smh.com.au/entertainment/movies/star-wars-the-for...

You're directly funding the lifestyles of everybody involved in everything you buy. I don't see this as a negative.

That said, the studio will probably get at least half of each of those $5, and I've known people who think absolutely nothing of renting movies for $5 multiple times per day, literally no cognitive difference between picking some $5 movie on iTunes and choosing another one on Netflix. Multiply that, e.g. 1% * $global, and pretty soon you're talking about real money for everybody.

$10-25million is nothing to pay an actor with a main part in a movie that may make $5 billion dollars for the studio.

Yeah you can. I was in a cinema last week in Maloolaba for $9. Brisbane has 3 low cost cinemas around the same price, one in Southbank in the city. Just avoid event cinemas and support your local indies.

Wow, $43 (or even $23) is crazy. I just checked, in my city (in Germany) Star Wars costs 13€ (AU$20), and that's the English version in 3D with shutter glasses. "Normal" movies (no 3D, no excess length) are 7-8€ (AU$11-12.50). That's like... half of what you pay. Is Australia generally that expensive? :O

$43 is for a VIP type experience - smaller number of big reclining arm chairs, food and drinks delivered to your seat throughout the movie, etc. Similar to the difference between an economy and business class seat on an airline.

At the big-chain theatre that I saw Star Wars, the "standard" price for a non-3D movie is $19.50. However it's very easy to get discounted prices for any movie. I paid $12.50 for my ticket, booked it online a few minutes before I left home.

I'm quite sure that the extra dollars paid for the $43 movie ticket was going to the movie theatre, not Hollywood.

Just checked in Poland, and 3D version in English(with subtitles) is 25PLN per regular ticket, so around ~6.2USD. IMAX version is 28PLN so about 7USD.

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