Wednesday, August 14, 2013

The Rising Cost of Fantasy

Distant worlds with exotic creatures, epic battles, larger-than-life villains - all that comes to mind, when we think about fantasy movies. Fantasy - like Science Fiction - opens up a world of dreams, like a keyhole into everything imaginable.

I wondered, why are there so few fantasy movies? I took a look at the box office statistics of the last years to find a reason, and I think, I found one. The following graph shows the Median Budget of General Fiction Movies for this year (Blue) and the Median Budget for Fantasy Movies (Orange) in millions.

What can we see? 
The average budget of general fiction movies roughly stays the same over the last 17 years with numbers between 60 and 80 Million Dollars. But the orange line slowly rises, as we can see, from 30 Million to 120 Million. The budget of fantasy movies has quadrupled in the same period of time. 

What does that mean?
Fantasy is expensive. For the cost of one fantasy movie the studio could make two non-fantasy movies - that would mean two streams of revenue for the studio. Remember, big budget movies are not a guarantee to earn back the cash (as Disney learned once again with The Lone Ranger, after their failure with John Carter). So it's a rough game to play for every studio.

But why are studios willing to produce big budget movies?
Foremost studios want to earn money. So if they invest a lot of money, they must hope to earn a lot of money. 
In the second graph, the orange line still shows the rise of the average budget of fantasy movies. The blue line shows the share of fantasy movies in the annual box-office (in percent, see left).

What can we see?
It is eye-catching, that both lines rise in near perfect harmony. Starting with only 1 - 10 % of the box-office share, the line slowly rises until it crosses the 20% mark. In effect, the share of revenue has more than doubled in 17 years. 
That's why studios are willing to pay huge amounts of money: the market hungers for fantasy and they want their piece of the box-office pie.

In the last decade the demand for fantasy movies slowly rose and created a new, big market for Hollywood. Consequently, studios greenlight high budgets in the hope to create a huge hit.
But studios can not produce dozens of high budget movies every year, they concentrate on a few, select tent-poles.

(all data comes from, visualized by me)

1 comment:

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