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Monday, November 9, 2009

James Cameron’s ‘Avatar’ Cost $500M, May Flop - Analysts wonder whether one of the most expensive movies ever stands a chance at the box-office - Softpedia

James Cameron’s ‘Avatar’ Cost $500M, May Flop - Analysts wonder whether one of the most expensive movies ever stands a chance at the box-office - Softpedia: "This December, James Cameron and fantasy-film fans will be treated to what is deemed one of the most ambitious and potentially successful projects of almost two decades: Cameron’s “Avatar.” However, boasting an estimated budget of about $500 million and almost no star power, while neither a story with which audiences are familiar, analysts can’t help but wonder about the odds of it being a hit at the box-office.

According to the New York Times, if all this is handled well, then “Avatar” stands to make a profit and all the backers, sponsors and movie partners that invested heavily in it, as well as the cast and production crew actually get to make an extra buck aside from the fix salary they cashed in. However, in an industry that is seeing declining sales and shifting tendencies, it’s becoming harder and harder to predict whether a film has what it takes to sell at the box-office.

20th Century Fox, for one, as well as Cameron himself seem convinced that “Avatar” can turn a profit. What this means is that it has all the necessary ingredients to cover the $500-million budget it required to make – and then some. 3D theaters will hopefully cover some of that number of tickets the film needs to sell (with theaters being able to charge extra), DVD sales and merchandise will eventually work together to make a profit – and keep everybody involved happy, the NY Times piece says.

Cameron has already taken the extra steps to ensure things work out well. “In a further hedge, Mr. Cameron would give up part of his own participation in the film’s returns if production costs exceed a specified level, according to those who were briefed on the film. If final production costs exceeded $300 million, for instance, Mr. Cameron would effectively defer much of his payout until the studio and others were compensated, despite his years of labor on the movie.” the aforementioned publication informs.

However, it could very well be that it’s too soon to tell. There are also too many players involved, and too many unknowns in the equation for analysts to be able to make an accurate estimation. “At what point the various partners in ‘Avatar’ would see profit from the film depends on what share of revenue each receives as the movie reaches theaters, then home video and other media around the world. If domestic ticket sales reach $250 million – a level broken in the last year by five films, including ‘Star Trek’ and ‘The Hangover’ – Fox and its allies would appear to be headed into the black.” the NY Times further says."


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