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Does a Higher Budget Make a Movie More Successful?

by Daniel Miller

Considerations for a Movie Budget vs. Movie Success

Who doesn't love a good movie? Of course, we all have that favorite film that swept you off your feet and seat. But have you ever thought of what goes into making the movie 'good’ or 'enchanting?’ Have you ever given a thought of the cost and gross expenses that go into making a movie? What do you think is the average movie budget?

Worry not. We compiled this article specifically for you!

Here's a promise, what you'll learn may surprise you more than you expected.

What is the Average Movie Budget?

When talking of the average movie budget, we usually refer to the production costs. You may stop and think that's a crazy budget for such a movie, but wait until you add the marketing and distribution charges. One would think investors would be tempted to take installment payday loans to meet the staggering costs.

We generally consider different things when accounting for movie budget averages. Most importantly, the movie genre. The average movie costs approximately $18m to produce, with major studio movies going for around $65m. However, you'll get pretty different figures when you break that up to individual movie genres.

This report estimates the average estimated expenses of U.S. motion pictures and videos at USD 65.59m. Digging deeper, we find variations in different types of movies. For example, adventure feature films released from 2014-18 averaged at $76m while horror and romance cost much less, averaging at $8m and $11m, respectively. In the same period, music-based movies had a mere budget of $7m only, while fantasy and SciFi films grossed higher at an average of $60m and $61m, respectively.

Would you guess what an animated film cost to produce during the same period? Here’s a hint; it errs on the higher end.

These are general movie budget examples. Once we start digging into the movie budget details, we'll come to terms with the intricacies of getting such movie budgets. Are you ready?

The Intricacies of a Movie Budget

This is where it gets interesting. Did you know some producers intentionally inflate the prices of their movies hoping to boost sales and marketing revenues? This is a business strategy practiced across different industries. If it costs more, it surely has better features and quality, right?

That takes us back to our original question; are movies with higher budgets more successful than their contemporaries? Let’s inverse that question: do movies with lower budgets sell less?

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Do you think your movie ticket prices are justifiable?

Before we answer that question, let’s focus on what does the movie budget include?

The first thing the producer has to deal with is purchasing the rights for the story. The original storyline may come from a video game, novel, play, remake, or sequel.

If it's an original copy, however, we need ourselves a screenwriter for the script. But, it doesn't end there – even the highest-paid screenplays need revisions and editing, just like typical writing. That’s where script doctors come into play. Their job is to revise and polish the original copy or rewrite it entirely if circumstances allow.

Then we have to pay the big boys. The producers often take the largest share of salaries, followed by directors. However, if the movie budget involves big names and stars in the industry, then investors need to dig deeper.

We also have salaries for the cast, including those behind the scenes. It's common for actors to accept lower pay in return for a share of the profits.

Depending on the actors, directors, and producers, we already have ourselves an average budget of $50m. We’ve not even mentioned the production costs, including catering, costumes, transport and accommodation for the crew, crew wages, travel, studio costs, production design. We haven’t mentioned everything that goes towards the production costs.

Producers place a heavy emphasis on the visual effects and music of the film. These components will either intrigue the viewers from the start or repel them without apologies, even if the script is super duper. Just to show you how important producers value this, the visual effects costs for Avatar and Lord of the Rings are primarily what pushed the production costs to over $200m. Luckily, it paid off.

Now you know the basics of what a movie budget includes. Wondering how to get a movie budget? You can use an online tool or a movie budget calculator to help you determine individual costs. But note that the final costs may end up being way more than initially planned. That’s why producers add a 10% allowance of the estimated movie budget to account for extras.

Movie Budget in Real Life

Now since you have a rough idea of what a movie budget looks like, let’s see how that plays out in actual films.

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Technology is quickly changing the face of movie production. Hopefully, the costs will also come down with time but still deliver high-quality entertainment.

As we did our research, we noticed something peculiar. Movies with high budgets don’t necessarily end up a success. Similarly, movies having lower budgets may just as well be explosive hits. Merging the two, we realized that successful movies with lower budgets end up with a higher ROI than the big guns with plenty to spend.

What's the Highest Movie Budget in the History of Filmmaking?

For some time, The Pirates of the Caribbean (released in 2011) held the record as the most expensive movie budget. Can you guess the figures?

If you said something along the lines of $200m, you’re far from it. The movie budget for production and marketing added up to $379m. Luckily for the producers, the script and play and effects were marketable enough and agreeable with large audiences. As a result, the movie made gross global sales of $1.045 billion.

Currently, The Avenger’s Endgame boasts of that top spot for most costly movies, with a budget of $400m.

If you think that budget is a bit overstated, how about the Hobbit Trilogy film, which had a combined cost of $623m after tax credits!

Other films that had a budget of over $250m include

Star Wars
Spider Man 3
Spectre
Justice League
The Lion King
Batman V Superman: Dawn of Justice
Harry Potter and the Half-Blood Prince

Which movie has the lowest budget?

Generally,movies before 2000 had relatively lower budgets compared to the modern day. Once you account for factors such as modern technology, inflation costs, and competition in the entertainment industry, you'll start understanding why.

For instance, the 1993 hit movie El Mariachi made global sales of $2.041m after using a budget of only $7000. Now that’s nothing but impressive.

Other films you may know that had a lower expense outlay but a larger profit base include;

MOVIE

BUDGET ($)

PROFIT ($)

RETURN ON INVESTMENTS (ROI)

Mad Max

200,000
49,675,000
24.738%

Facing the Giants

100,000
24,377,174
24.277%

Super Size Me

65,000
6,427,904
9.789%

Paranormal Activity

450,000
89,933,424
19.885%

Fireproof

500,000
46,476,605
9.195%

The Gallows

100,000
6,924,131
6.824%

God’s Not Dead

1,150,000
36,697,628
3.091%

Has your perspective about movies in general changed?

Now you have a primary understanding of the financial aspect behind filmmaking. We've seen how a major blockbuster hit can cost little to produce. We've also understood why prime producers inflate their prices as a marketing stance.

Do you know how much it costs to produce your best movie? Hit us up in the comment section and let us know.

ABOUT THE AUTHOR

Daniel Miller is an inexperienced specialist in the business and financial area. Daniel has also worked as a financial advisor at a bank and provided consulting and advice about budgets, savings, insurance, stocks, retirement funds, tax advice, etc. He is currently doing specific research on the topic.