Moviemaking is "still a very challenging business," says media analyst Richard Greenfield. "The average movie still loses money." The question is, will Indiana Jones and the Kingdom of the Crystal Skull turn out to be an average movie? In a piece calculated to make you break out the crying towels, Claudia Eller of the Los Angeles Times reports on "the new economic realities of the movie business" and how they're reflected in the deal that Paramount Pictures cut with director Steven Spielberg, star Harrison Ford, and fount of contemporary mythology George Lucas in order the get the fourth Indiana Jones picture up and running. The franchise is different from most of the more recently forged brand-name pictures (such as your Spider-Mans and your Pirates of the Caribbeans) in that the producer, Lucas, rather than the studio, owns the property, which puts Paramount more in the position of a distributor than a proud parent who can expect the movie's long-term revenue potential to take care of it in its old age. After it became clear that the picture was going to cost much more than originally projected--not an unheard-of occurrence in Hollywood--the major participants agreed to sweeten things for them by forgoing their upfront salaries. Eller reports that the studio "spent about $185 million to make the movie and will pay at least $150 million to market it worldwide. The studio will earn a distribution fee of 12.5% of the revenue it receives from the film's release in all media, including theaters, DVD and television." Lucas, Spielberg, and Ford will stand to make 87.5 cents off every dollar the movie makes after the studio has been fully reimbursed for the cost of the movie and been paid their distribution fee, but that means that they won't start to clear anything until after Kingdom of the Crystal Skull has made $400 million.
The thing is, if the movie makes less than $400 million, Spielberg, Lucas, and Ford will have spent a year of their lives killing themselves--well, Ford, anyway--just for the exercise. Is there a chance in hell they'll go home empty-handed? Eller: "Although the "Indiana Jones" franchise is considered one of Hollywood's surest bets -- the first three pictures amassed $1.2 billion in worldwide ticket sales -- there is no guarantee that younger moviegoers will turn out in droves to see a now 65-year-old action hero in a fedora dust off his trademark leather jacket and crack his bullwhip. Today's under-25 action junkies are wowed by computer-generated effects spectacles, such as Spider-Man, Harry Potter, 300 and Fantastic Four." Stress the age of the leading man (and the franchise) and the fact that the movie is built around old-school physical stunts instead of CGI, and it starts to sound more and more like Live Free or Die Hard, a movie that did better than respectably at the box office (and not half bad with the critics) but that has yet to clear the $400 million hurdle. Hollywood: where success has a thousand fathers, and failure sometimes clears $3,999,999 in profits.