Does Big Budget equal Big Revenue?

cmahoney
cmahoney
Nov 4 · 2 min read

It has been argued that there is no real rhyme or reason to creating a good movie or show. Famous actors, directors, and other factors play a role but even with all these factors there is no true formula to creating a movie that everyone wants to go and see. This being true, I may have found the factor that contributes most into making a “good” movie, and that is the production budget. Thanks to Plotly, I was able to make a scatter plot that compares the production budget of a movie to how much revenue it ultimately makes at the box office.

As you can see, there is a strong positive correlation between these two factors. Simply put, the more money you put into a movie, the more money you’re bound to make on the movie. Most of the movies shown had a production budget under 100 million dollars and ended up collecting under 100 dollars in revenue. But as we move up the production budget axis, we see revenues start to skyrocket as more money is put into the movie. Although there is no exact formula, having a larger production budget allows an entertainment company the affordances to get better and well-known actors and directors, put more money into special effects, and market the movie before it comes out.

The reason I believe this is an important correlation is because it serves as a microcosm for capitalism in America as a whole. Production companies such as Warner Bros, and Universal Pictures are both multibillion dollar companies that have the luxury of putting boatloads of money into a movie and exponentially increasing their profits. Just like in the broad American economy, it seems that the rich do in fact keep getting richer. How are smaller production companies supposed to compete with any movies that Warner Bros. produces. Warner Bros. is going to make a movie with all the best actors with a golden storyline and unbelievable special effects. Not all movies that these big production companies make are going to be a hit, but they have the ability to market the movie where they will at the least make a substantial revenue. This also brings up the concept of the “Homogenization Hypothesis” because there are a few production companies that own a significant portion of the film industry. I believe these big production companies do a pretty good job of releasing a diverse assortment of movies and this is mainly because they have the power to release “good” movies no matter the genre. This may mean that at least in the film industry, maybe homogenization of ownership isn’t such a bad thing.

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