Hollywood, a district at Los Angeles has been known as heaven for movie makers and actors/actresses. Four major motion pictures companies have big studios for the industries there. The industries itself started at the beginning of 20th century. At that time, big companies were having “war” not only to make a good movie, but also to get patents, licenses, and copyrights. But I’m not going to discuss much about their war, I have more interest in their budgeting to make a motion pictures. Basically, there are four sections defined when the company planning a budget for a movie: above the line, below the line, post-production, and other.
Above the line is a term that refers to the list of individuals who guide, influence and hopefully add to the creative direction, process and voice of a given narrative in a film and their related expenditures. Above the line is including Director, Talent/Actors and Actressess, Producer, and Screenwriter. These section can be refer as Fixed Cost.
Below the line is a term when if the director decide to cancel some scenes, there are some cost that can be cut. It can be refer as Variable Cost. Below the line crews are: Assistant Director, Location manager, Director of Photography, Composer, and etc.
Post Production includes editing, advertising, digital art. This is a term for all stages of production occuring after the actual of shooting is finished.
Others includes insurance, bond, etc.
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| Figure 1 example budgeting of Terminator 3 (img source: http://www.edwardjayepstein.com/budget.htm) |
Here is the example of Terminator 3 Budget:
Above The Line
Story rights (Carolco and Gale Anne Hurd): $19.5 million
Screenplay: $5.2 million
John D. Brancato & Michael Ferris: $1 million
Director (Jonathan Mostow): $5 million
Producers: $10 million
Cast: $35 million
Arnold Schwarzenegger: $29.25 million + 20% gross profits
Arnold's perks: $1.5 million
Rest of principal cast: $3.85 million
Extras: $450,000
Below The Line
Production costs: $58 million
Post Production
Post-production costs: $4 million
Visual effects: $20 million
Music: $2 million
Others
Other costs: $33.6 million
Total: $187.3 million
Controlling the Budget
The producer has an important role for controlling the movie budget, he/she must decide on what to do when over budget is occurred because actual budget can’t exceed the initial budget. Some actions like cutting and canceling some scenes, or taking scenes in a cheaper place (on the studio using green screen, etc) may occur. What the producer can do is by cutting budget on the Below The Line and Post Production section as he can avoid the variable cost. No fixed cost can be avoided in movie project as the actor’s fee and director’s fee can’t be avoided or reduce. At an extreme condition when there’s no section can be cut, some producers tend to eat the cost by receiving less for their producer’s fees.
Sources:
http://www.latimes.com/business/la-fi-movie15apr15,0,6005119.story
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