Please do expand on these reasons. What costs a lot for fundamental reasons? And what can be attacked with software?
And it's an industry where profits are made at the high end of the market (you'd rather pay Tom Cruise $100 millions for the statistical guarantee of $200+ millions in Mission Impossible box-office openings rather than medium-quality people for no guarantee at all).
You can attack script-writing with software, or replace actors with computer animation done by software engineers, but you end up with poor low-end results or even more expensive budgets (that only make sense for computer-animated fans, see Toy Story).
The attack vector implied by pg was not necessary to make film-making cheaper but rather to make entertainment better and probably different. E.g.: video games took off in the last two decades, and their business model worked because every time you play a game you get at least slightly a different entertaining experience without any additional costs from the producers.
Only a bottom-up, decentralized approach can win against Hollywood.
Preproduction: - where screenplay is written or adapted, cost is usually low unless rights are to be managed for original content you're adapting from. - Production schedule and directors shooting script is done, sometimes a storyboard too (skilled storyboard artists COULD be somewhat replaced by software and there are attempts) - Sound designers start their work (sound design is a major component of content along with images) - Composer starts their work - Location scouting and permits are secured (permits for natural locations can cost a serious amount of money) - Art director and art departement starts working on costumes (costs a lot of money) and designs for sets (we'll get back to this)
Production: - Camera and grip departement can get huge... I've done only a moderate size productions and my camera and grip dept. was 20-30 people (skilled labour that costs money)... also cameras cost (with RED little changed because camera itself is usually from rental so prices are more or less the same)... lenses cost (Ultra primes are around 250.000 euros per set - if someone can make a startup for prime lenses for PL mount there's your business)... grip costs (cranes, dollies, russian arms, whatever your production actually needs) - art department can also get huge, wardrobe, set, makeup... - talent - you need them before production for actors rehearsals and if their name is recognizable it bears marketing power, which they cash in from you
Postproduction: - Color Correction can get attacked with software, Assimilate Scratch software tried to attack it with their software but it is still expensive, Nucoda Baselight and Quantel are still very expensive... not to mention hardware ccosts you need to run 4k dpx files at realtime - VFX usually require a large amount of highly skilled labour with a serious hardware power for rendering - Prop dept. is rare in talent and costs a lot of money, traditional FX even more so - Sound designers which are good are rare, they cost, their hardware and software costs. Foley is even more rare to find.
And now most important part about pricing structure (falls in both preproduction and production) - Setpieces http://en.wikipedia.org/wiki/Setpiece
Setpieces are what drives most of the costs in high budget movies, they are akin to large theatre production where there are extravagant sets. Building setpieces needs engineers, builders, material and is already shaved of from profit as much as possible.
Marketing and distribution is a sizeable chunk of money in a project too - and this is actually a part of disruption that could make a difference. If raising capital and subsequently marketing and distribution could be taken care of, it could work - but IMO only for low budget projects (up to $20 million).
Just to summarize a bit:
Even if by some kind of magic you could downsize in post production (lots of people, lots of hardware, lots of work) and do it for free and in preproduction if you could write a script for free, do locations scouting and production scheduling for free (movie magic scheduling software is $500 I think)... you still have 30-60 days of principal photography where you need set building, actors, 50+ crew, electricity, transportation, natural locations permits. Those are all highly skilled workers and if you only paid them you still break a $1 million budget, sans equipment and everything else. It's an expensive sport. Lucas calculated that a low budget movie is in a ballpark of $20 million - with marketing and distribution, half of that without it. He's right.
How is a movie marketed and distributed in the film industry?
>> - Camera and grip departement can get huge... I've done only a moderate size productions and my camera and grip dept. was 20-30 people (skilled labour that costs money)
Could the team size be reduced by more/better technology?
>> Sound designers start their work (sound design is a major component of content along with images) - Composer starts their work
>> Prop dept. is rare in talent and costs a lot of money, traditional FX even more so - Sound designers which are good are rare, they cost, their hardware and software costs. Foley is even more rare to find.
How much of this work can be outsource to other countries?
It's not my expertise so I can't dwell into detail, but you can see it for yourself too - mostly via traditional channels, print and billboards, tv and radio trailers, online campaigns.
Could the team size be reduced by more/better technology?
Yes, but not by much! For example 35mm film is now more or less obsolete - average movie is shot on 20:1 ratio (for 90 minutes of running time, 1800 minutes is shot), that shaved off about $100,000 in negatives alone (around $5000 per hour of negative - costs of processing and making copies with film is additional cost). Film equipment can get cheaper. Dollies (like panther) cost around $60,000+ for example, good optics is 250,000 euros etc... Film lights are expensive too, but you need grip crew to operate them. I see opportunity in reducing costs of film equipment, but not so much in crew size.
How much of this work can be outsource to other countries?
It can and is, but as productions shifted from California to other countries those same countries started raising prices over time - so it's not so much as a cost reduction anymore... other countries now compete more on tax incentives than lower salaries (cost of equipment is more or less the same everywhere).
Independently produced outside the system. Shot in Romania, I believe. Reported budget "just under a million", but that's often code for "a few hundred thousand", which is what it looks like.
Acquired by Paramount Insurge for a million. Insurge is a brand formed after the success of Paranormal Activity to make very low budget projects.
But then Paramount spent $15 million to market the thing. So the cost of production was tiny percentage of the overall cost. It was the marketing that mattered in the end.
And it worked. Opening weekend box office alone brought the film to breakeven, even after you deduct everything else. $35 million dollars gross.
And it's almost universally thought to be an awful movie.
But that didn't matter.
Marketing. It's what the studios do best.
I agree that making movies is expensive, but we shouldn't fall prey to the availability heuristic.
To circumvent this, it might help to think about TV: What would it cost to produce original content for a 24/7 stream?
[1] http://abovethelineproducer.blogspot.com/2011/12/hollywood-p... [2] http://filmfinancing.org/
As for TV costs, I was involved in a Big Brother show as a director for example - reality shows are among the cheapest content you can produce (hence why there are so many of them)... 3 months of that show production was I believe in 3-5 million euros range. And that was the cheapest content you can produce, with producers that watched every penny spent with relatively cheap workforce.
The bigger the budget, the more likely there are strong revenue streams from other sources. For example, for large tentpole pictures domestic box office is often only 1/3 of the total global box office.
This study appears to be rather shallow.
But, you make an interesting point. Ultra low budget movies, character or story driven ideas could get funded and developed via kickstarter, but you still have most of productions which aren't suitable for low budgets no matter what.
You can bet that really stupid decisions are made here, because they can't save money without losing a revenue stream, or pissing off theatres.
And Box Office sales are really important, because they are the first figure to be released. If 10 million people watch the movie, it's a good movie, so the DVD shops it (doing free advertising for you), and the TV Channels will pay more (even if everyone thought it was awful). They want to "anchor" the movie as being a money maker, by maximizing Box Office sales.
If you shoot a brilliant movie, like The Shawshank Redemption and nobody goes to see it, then the DVD shops won't push it. This means you'll only sell copies by word of mouth, by which stage the price has gone down.