Movies have consequences…
Screenwriters do not live in a vacuum. Rather we exist in a world populated by movie studios. They are the buyers, the suits, our employers. When things go well for them, generally things go well for us. When things do not go well, things can get a bit dicey.
There has been a lot of buzz about DreamWorks since it reconstituted itself and hit a rough patch with its initial release of movies (I Am Number Four, Fright Night, Cowboys & Aliens).
Here is a THR article based on an interview they conducted with DW President Stacey Snider. There is a lot of information to be gleaned from it:
“There is a financial loss, a hit that we took with Cowboys that we are able to absorb, not perfectly, but we are able to absorb it,” Snider said. “The Help went a long way towards helping us. And because of that, our partners can say, ‘Keep going. We’re behind you. You’ve got the money — make movies.’ . . . We have absolute support from our partners. That is real, it is expressed, it is explicit.”
One area where Hollywood might have noted a change, Snider said, is that DreamWorks has slowed its purchases of scripts. Though the company just optioned Raoul Dahl’s children’s story BFG, DreamWorks will work with material that is already in the cupboard. “I have definitely said to our executives, ‘Let’s turn these into movies, not meetings,’ ” she said. “I just think that’s prudent management.”
DreamWorks covered half of Cowboys’ $160 million budget, with Universal and Relativity splitting the other half. (Paramount distributed the film for a fee.) The Jon Favreau-directed sci-fi Western, released domestically in July by Universal, grossed only $98 million. The Paramount international release added only $64 million.
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So far The Help, which cost $26 million, has grossed $155 million and counting. The film was in profit at the $60 million point, according to Snider, and while it only has opened in a few foreign markets, it’s off to a strong start — in contrast to the expectations at DreamWorks that it would not perform overseas at all. Co-financier Participant Media ponied up a third of the budget.
Takeaway:
* Big budget movies offer a studio the opportunity to hit a grand slam and generate tons of revenue. They also are big risks, proved again by Cowboys & Aliens. [That is why the project was funded by DreamWorks, Universal, and Relativity, an attempt to minimize the risk.]
* While lower budget movies are less risky, sometimes they can catch lightning in a bottle like The Help.
* A movie does not hit profit after revenues match its production budget, rather you have to figure in marketing and distribution costs. So while The Help may have cost $26M to produce, its break-even point is [as noted above] $60M, basically meaning for every dollar the studio spent on the film to produce, it had to earn back 2 1/2 dollars.
* Using that formula, the break-even point for Cowboys & Aliens, which cost $160M to produce, would be $400M. Suddenly its current worldwide revenues of $162M don’t look very good, do they? That helps explain the following:
* DreamWorks has “slowed its purchase of scripts,” choosing instead to “work with material that is already in the cupboard.” In effect, that means one less buyer in the spec script market until further notice.
Bottom line: Movies have consequences. That is why DreamWorks has two dates circled in black on the calendar: October 7 and December 28. Those are the dates their next two big budget movies come out: Real Steel and War Horse.
As a screenwriter you hope those movies do well if only on a purely pragmatic level because you want to see DreamWorks become an active player in the acquisition market again.
For more of the article in THR, go here.
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