Welcome to the show folks...
If you're a regular reader of this blog then you've probably heard that the Halcyon Company, who made Terminator: Salvation, have filed for bankruptcy, because they owe everyone involved with the film and their brother a truckload of money, and are currently embroiled in a lawsuit with the film's financial backers Pacificor which could cost the company ownership of the Terminator
franchise.
Now Terminator: Salvation made around $370 million worldwide at the box-office.
Think about that for a second, I'll wait.
...
...
...
Okay, did you think about that little tidbit of news and the cognitive dissonance associated with it?
Good, but I will rant about it anyway.
There was a time when if your company's film made $400 million you'd be dancing on the street. You'd be a big time blockbuster success story, and the profits would be so big, you'd actually pay people at least some of their back-end deal.
There was even a time when making $100 million was considered a blockbuster success. In fact, the original Terminator made only around $78 million, and was considered a smash.
Nowadays you can make $100 million, even $400 million, and guess what, you're in bankruptcy court, people aren't getting paid, and reports say that you're in the hole by $50 million.
What the hell happened?
I mean $78 million was pretty good for The Terminator, in fact, it was excellent, so why isn't $370 million not good enough for the prequel?
Well, it starts with the simple fact that The Terminator cost $6.5 million to make and Terminator: Salvation cost over $200 million to make. The first Terminator was a comparatively small film, with just a handful of characters, and modestly conceived but well constructed action set-pieces. Terminator: Salvation was an attempt at an epic, with everything done on an epic scale that would dwarf the first film.
However, if you went simply by the rates of inflation in the 20+ years between films it still shouldn't have cost over $200 million to make even with its grander ambitions.
You see, it's not inflation that's killing Hollywood, it's complication.
Everything is complicated, raising money is complicated, spending the money is complicated, and earning back the money is even more complicated.
Why is it so complicated?
Well the complicating started because studios and producers didn't like having to share the profits with the people who actually make the film, and started making every damn thing involve 50 pages of legalese. Because with complications come opportunities to screw people out of their money.
Feeling screwed, people started demanding more up front, and more from the back end. Prices started to go up, way up, beyond the rates of inflation, and that's just production. Prints and advertising rates also skyrocketed, especially after the "synergy" supposedly created by having all the media companies merge into mega-conglomerates.
Unable to pay for making films on their own, studios and production companies need outside investors. But to find those investors you need to sign on with specialist deal-makers, adding another mouth to feed, and you need to constantly find new investors, because a lot of studios can't maintain healthy relationships with investors (for obvious reasons).
Things just keep getting more expensive, and even though technology has made the means of making a professional quality movie a hell of a lot cheaper, the actual costs of making and releasing a movie have gone up so far that a $370 million box-office take isn't even enough to break even.
It's pretty sad when you think about it.
If you're a regular reader of this blog then you've probably heard that the Halcyon Company, who made Terminator: Salvation, have filed for bankruptcy, because they owe everyone involved with the film and their brother a truckload of money, and are currently embroiled in a lawsuit with the film's financial backers Pacificor which could cost the company ownership of the Terminator
franchise.Now Terminator: Salvation made around $370 million worldwide at the box-office.
Think about that for a second, I'll wait.
...
...
...
Okay, did you think about that little tidbit of news and the cognitive dissonance associated with it?
Good, but I will rant about it anyway.
There was a time when if your company's film made $400 million you'd be dancing on the street. You'd be a big time blockbuster success story, and the profits would be so big, you'd actually pay people at least some of their back-end deal.
There was even a time when making $100 million was considered a blockbuster success. In fact, the original Terminator made only around $78 million, and was considered a smash.
Nowadays you can make $100 million, even $400 million, and guess what, you're in bankruptcy court, people aren't getting paid, and reports say that you're in the hole by $50 million.
What the hell happened?
I mean $78 million was pretty good for The Terminator, in fact, it was excellent, so why isn't $370 million not good enough for the prequel?
Well, it starts with the simple fact that The Terminator cost $6.5 million to make and Terminator: Salvation cost over $200 million to make. The first Terminator was a comparatively small film, with just a handful of characters, and modestly conceived but well constructed action set-pieces. Terminator: Salvation was an attempt at an epic, with everything done on an epic scale that would dwarf the first film.
However, if you went simply by the rates of inflation in the 20+ years between films it still shouldn't have cost over $200 million to make even with its grander ambitions.
You see, it's not inflation that's killing Hollywood, it's complication.
Everything is complicated, raising money is complicated, spending the money is complicated, and earning back the money is even more complicated.
Why is it so complicated?
Well the complicating started because studios and producers didn't like having to share the profits with the people who actually make the film, and started making every damn thing involve 50 pages of legalese. Because with complications come opportunities to screw people out of their money.
Feeling screwed, people started demanding more up front, and more from the back end. Prices started to go up, way up, beyond the rates of inflation, and that's just production. Prints and advertising rates also skyrocketed, especially after the "synergy" supposedly created by having all the media companies merge into mega-conglomerates.
Unable to pay for making films on their own, studios and production companies need outside investors. But to find those investors you need to sign on with specialist deal-makers, adding another mouth to feed, and you need to constantly find new investors, because a lot of studios can't maintain healthy relationships with investors (for obvious reasons).
Things just keep getting more expensive, and even though technology has made the means of making a professional quality movie a hell of a lot cheaper, the actual costs of making and releasing a movie have gone up so far that a $370 million box-office take isn't even enough to break even.
It's pretty sad when you think about it.
This is what happens when a small company created by loans banks everything on one massive blockbuster. The film fails then they have huge debts they cannot pack back. They should have either made Terminator on a reasonable budget or at least started out on cheap but profitable films that could have built up their coffers and reputation.
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