In video games, at least, some of the biggest hits come from simply executing a formula really well.
When it comes to movies, it’s really hard to predict revenues, but it’s a lot easier to predict costs. If you can make movies cheaply, they don’t need to be smash hits in order to make money—and if they do become hits, so much the better. Roger Corman is an example of someone who made money not by making extremely popular movies, but by making extremely cheap ones.
Roger Corman’s strategy may be a good one for an individual, but it doesn’t scale well and thus won’t tell you how the industry is organized. When you have little money, it is good to control costs and maximize percentage return, but if you do this very well, you’ll end up with a lot of money. Investing it all in small films would be too many to manage. So you either have to hire people to manage these small films and run into principle-agent problems or you have to aim for larger grosses.
Random thoughts:
I suspect that there’s a lot more ways to make a bad movie than a good one.
In video games, at least, some of the biggest hits come from simply executing a formula really well.
When it comes to movies, it’s really hard to predict revenues, but it’s a lot easier to predict costs. If you can make movies cheaply, they don’t need to be smash hits in order to make money—and if they do become hits, so much the better. Roger Corman is an example of someone who made money not by making extremely popular movies, but by making extremely cheap ones.
Roger Corman’s strategy may be a good one for an individual, but it doesn’t scale well and thus won’t tell you how the industry is organized. When you have little money, it is good to control costs and maximize percentage return, but if you do this very well, you’ll end up with a lot of money. Investing it all in small films would be too many to manage. So you either have to hire people to manage these small films and run into principle-agent problems or you have to aim for larger grosses.