Without the big studios, like Disney, Universal, Warner Bros. and many others, it is impossible to imagine modern filmmaking. They give directors jobs, allocate production budgets, and oversee the creative process. The only problem is that the studios have completely forgotten how to take risks and have turned “art cinema” into “movie industry”. It happened only because at a certain point in time, box office returns began to play almost the most important role in negotiating which film to put into production, and which is better to abandon.

The fact is that in today’s film industry much more weight have big-budget films than small modest projects. This is only because the studios are not profitable low-budget pictures. They simply do not pay off. But how so? Guided by simple logic, we can assume that it is much easier to recoup the 10 million spent on the production of a low-budget film, rather than 100 million spent on a blockbuster. But it’s a little more complicated than that.

Let’s say you were allocated the necessary 10 million. Approximately the same amount the studio spends on promotion of your picture, advertising, etc. That is, the budget is already 20 million. Add the fact that the rental company, as a rule, take away 50% of the box office. Accordingly, 20 million becomes 40 million. And it turns out that a film with a budget of 10 million must gross at least 40 million to break even for the studio. After that, you simply have to turn to statistics and compare how many $10 million films have gone over the $40 million mark. The figure is not that big.

But if you do the same trick with big-budget films, then the situation is quite different, because it is much more profitable to invest more money in a large-scale project, which one hundred percent will pay off. Mistakes, of course, do happen, but they do not critically affect the studio’s financial situation, as they always have several large and profitable projects on their hands. Such a vicious circle.