The Most Expensive Cinematic Risk of All Time

avatar-movie-image-9It’s become an axiom in Hollywood today that the runaway budgets are making studios more and more risk-averse. Then again, 2009 has been a very strange year. Paramount spent $150 million on Star Trek, which not only was stigmatized as a very uncool show, but was dead in the water as a viable franchise. Warner Bros. spent $100 million turning a short children’s book into a full length film without it becoming a simple children’s story, cute yet forgettable. And now 20th Century Fox is spending what could amount to $500 million on Avatar (once you include robust marketing costs and investments from Cameron and other producers, the reported $230 million film doubles in price). The New York Times has an article about the specifics of the film.

The strange thing is that, besides the technology and the man in the director’s chair, there is very little that’s instantly bankable about the film. It’s sci-fi…with blue aliens. There are no huge stars. And it’s based on no preconceived property. The one hope is that the film will be pure spectacle.

Of course, Avatar may not be as big of a risk as it sounds. With TV deals, DVD sales, and merchandising, there are avenues of profit that may not be seen beyond a simple theatrical run. The studio is also investing in new technology, both behind the camera and in front of the audience. If Avatar mollifies audiences to being more receptive toward the 3D experience, then it will pay for itself over time.

The economics of the situation are kind of fascinating too. With increased globalization and the expectant doubling of the worldwide middle class over the next two decades, having already increased dramatically over the last few decades, there will be a focus on creating a general experience for international audiences with summer blockbuster films (G.I. Joe already went to some lengths to create an international cast with its actors). This is not necessarily new: international sales have kept pace with or exceeded US sales for decades. But the US has still represented a disproportionate part of the global return. Now 20th Century Fox is focusing on burgeoning economies like China. Screen Daily has an article about Avatar’s potential impact in the country:

Gao Jun, deputy general manager of the New Film Association, said: “It is the first time in five years that such a heavyweight Hollywood film released in the year-end season.  Its box office impact will be huge.”

Maybe they are taking a risk, but they are also playing it smart. And since it is an original property, it will most of all probably have to be a good film, which makes you realize why it’s so difficult in the first place to throw hundreds of millions of dollars at a film when the quality isn’t known until after it’s finished. It reminds you of why studios want to play it so safe.