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Patrick Goldstein and James Rainey
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Jim Cameron's 'Avatar' price tag: How about a cool $500 million?

You'd have to say that the New York Times' Michael Cieply is a pretty crafty reporter. He knew that the best way to get us to read a sober, intricately detailed financial analysis of 20th Century Fox's economic involvement in "Avatar" was to stick something in the lede that would grab our attention -- like the news that the movie's price tag was approaching $500 million.

Avatar-movie-poster How did he get that number, you may wonder. According to his story, the Jim Cameron-masterminded film (due out next month and still under lock and key) has a reported production budget of $230 million, but Cieply says that the price tag "would be higher if the financial contribution of Mr. Cameron and others were included." He says that when you toss in the cost of global marketing for the film -- he says Fox itself is planning to spend $150 million around the world -- the film would cost its various backers $500 million.

Cieply's story makes a compelling point about modern-day studio economics. When it comes to a mega-blockbuster like "Avatar," studios like Fox don't just hedge their bets. They involve a wide variety of partners who provide financial and marketing support for the studio's behemoth. According to the piece, a pair of private equity partners -- Dune Entertainment and Ingenious Media -- are picking up 60% of the film's budget. But Fox also has built-in protections from Cameron himself. If the film's final production costs topped $300 million, for example, Cameron would "effectively defer much of his payout until the studio and others were compensated."

Cieply says the film also qualified for tax rebates in New Zealand, since much of its digital work was done there. It also benefits from $25 million worth of technological and marketing aid from Panasonic, which pitched in to help the film in return for assistance from Cameron on Panasonic's upcoming 3-D home video systems.

It just goes to show that when you're in the blockbuster business these days, you can always count on a little help from your friends, who are all hoping to make a little money -- or enjoy some reflected benefits -- from a mega-event that casts a giant shadow over the entire Hollywood landscape.

 
Comments () | Archives (29)

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Remember Titanic was actually a pretty bad movie.

I just proved again the cold hard fact that Teenage girls drive the economy.


Boy bands.

Sappy romance flicks.

You name it.

Let's see....I will go see it myself (because I got hooked on the show while watching with my kids on Nickelodeon). My kids (2 young boys) will want to see it with me when I return home from serving overseas in December (Can't wait to see you). I am fairly certain my ex-wife will go see it with them as well. Most likely my sisters (3 of them) will all take their nephews to this movie as well. Basing that on an average ticket price of 11.00 for adult and 6.00 for children. 6 adult tickets and 6 child tickets gives the movie 102.00 dollars. Not quite 300 million, but keep in mind I am one family with two kids. If the movie is good I might go see it a third time with my girlfriend. So, regardless of my political position, I would say that most parents of children 4-12 will probably know about this movie. They may end up in my situation taking their children to this movie multiple times. I, also, think that alot of people in my situation don't know about or care about similarities to other movies' plots, or what big name is starring in the movie. I can assure my boys won't care. Do I think this movie will be as big as a "Spiderman/Harry Potter" the answer depends on the quality of the movie. Do I think it will make more than 300 million in the US? Yes, absolutely. How it will fare internationally, again will depend on the quality of the movie. Unless of course they get nickelodeon. But, I firmly believe this movie will be a "box-office" hit by default.

Since Mr. Cameron has been playing "I vant to be alone" since his glory days of "Titanic", I am guessing he realizes he has contracted Lucas Syndrome: impossible-to-meet expectations combined with the total revalation of the Emperor's nakedness. Everything I have seen regarding "Avatar" reminds me of nothing so much as that bucket of ego-slop called "Battlefied Earth", right down to the color palette.. Remember - you read it here first.

Who is the target audience for this movie? Is it young men who mostly play video games like Second Life or World of Warcraft?
Movies like Harry Potter, Lord of the Rings or the superhero movies tend to have a broad appeal; will this movie enjoy that type of appeal or will only a limited demographic be interested?

Its interesting that “fans” of movies get very impressed with them selves when they talk about film budgets. What a film costs has nothing to do with quality of a movie. In this case Cameron has spent a lot of money on new technology and some processes that will be used extensively in the future. He’s and very talented story teller and a great director. Wait to see the finished film before getting an attitude about the cost. Whether it cost 50million or 500 million is not an important issue to the public. Is it a good film? That’s what we are waiting to find out. At least people who are interested in films and not posers who think their movie studio executives.

"but honestly it's hard for blockbusters like Harry Potter and Batman to recoup their investment and these are franchises with strong earning powers."

I guess you don't pay attention to reality.

The Dark Knight recouped its entire investment on opening day, accounting for international box office as well as American. It went on to make over $500 million in box office sales alone in its first theatrical run.

Each Harry Potter movie has recouped its investment within weeks of release.

obscene

You know, didn't they already release this movie, where it bombed horribly? I believe at the time they called it "Battle for Terra".

In Cameron we Trust!

He never dissapoints (maybe true lies just a bit). And its in 3D!
First time a movie is in 3D (not full CGI). Lots will go and see this one.

Although I do admit the Trailer didnt impress and South Park maybe shoved off a few millions from him hehe :) or who knows, maybe the contrary is true.

Lets just wait and see shall we.

 
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