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John Scalzi – Four Reasons Why Avatar Is Too Big to Fail

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I was forwarded this New York Times article on James Cameron‘s scifi flick Avatar, and how the production and marketing of the movie will likely cost a staggering half-billion dollars. The friend who forwarded it to me wrote, “is this film ever going to make its money back?” Sure, it could, and probably will.

Some of the answers are in the article itself: First, the half-billion under discussion is not being fronted by a single studio (in this case, 20th Century Fox); it’s the entire outlay of cash, which includes funds from two other movie companies that between them are covering 60 percent of the production costs. It also includes advertising deals where one company basically uses Avatar properties while promoting their own goods; the article notes Panasonic using Avatar clips as part of a $25 million effort to push its own home theater lines.

To be clear, Fox isn’t getting off cheaply; when all is said and done it’s going to be on the hook for at least a couple hundred million dollars in production and marketing costs. If the flick fails, it will hurt. But there’s a difference between being on the hook for a half a billion, and being on the hook for half that.

Beyond that, there are other factors to consider.

First, there’s a difference between 20th Century Fox spending a couple hundred million dollars (or so) in the production of Avatar, and, say, Warner Bros. putting $100 million dollars into The Adventures of Pluto Nash. Honestly, I try to imagine the pitch for that one: “We have a great idea! First, it’s a science fiction comedy. Second, the star hasn’t been hot in a decade except when he wears a fat suit. Third, the director has never had a hit that didn’t star Billy Crystal and a herd of cattle. It can’t miss!”

Contrast this with the pitch one would make with Avatar: “It’s the Oscar-winning director of the most successful movie in history returning to the genre that made him famous, using new technology to show moviegoers visuals they have never, ever seen before. Plus, it’ll be in 3D, so we can charge more for the tickets.” If I were a studio executive, I know which of these I’d go for.

The point here is that track record does matter. James Cameron will spend every single dollar a studio gives him (and more!), but as far as being both a bringer of big box office and pushing the technical envelope, he’s in a class which at this point includes only George Lucas, Peter Jackson and Steven Spielberg. More to the point, with the arguable exception of The Abyss (which I think eventually broke even), James Cameron has not lost money on a movie.

Another thing to consider: Titanic brought in two-thirds of its total gross from overseas markets. True Lies (Cameron’s movie before Titanic) brought in 61 percent of its gross overseas. Terminator 2: 60 percent. Over the last twenty years, Cameron’s movies have been instrumental in expanding the global market for Hollywood flicks and, for better or worse, making the U.S. film industry factor in global tastes when making its product.

What this offers Fox is a hedge against a possible lackluster U.S. performance — frankly put, it’s the global market that will be Cameron’s primary box office, with the domestic box office the (probably large) cherry on top.

Finally, there’s the matter of 3D. In the last couple of years, 3D screenings of movies have been a boost to the box office bottom line, but Avatar will be one of the first major studio live-action flicks in recent memory (if not the first) for which the 3D-enabled theaters are going to be the movie’s main revenue stream as opposed to a bonus. Since tickets for 3D theaters go for up to a 30 percent premium over standard tickets, that’s likely to make a huge difference in the opening weekend numbers and help to keep the weekend-to-weekend fall-off manageable.

What could sink Avatar? For the opening weekend, I’d say almost nothing; even if the reviews are uniformly negative (which I don’t expect), very little will stop a wide swath of science fiction and action fans from filling seats. Very bad word of mouth could kill second-weekend and repeat viewing, but it really would have to be pretty bad.

In short, unless Avatar turns out to be historically awful — which given Cameron’s track record is unlikely — it’s a pretty safe bet that the movie is going to hit its marks financially. At which point, a half billion-dollar price tag won’t look like folly; it will simply look like the cost of doing business with James Cameron.

Winner of the Hugo Award and the John W. Campbell Award for Best New Writer, John Scalzi is the author of The Rough Guide to Sci-Fi Movies and the novels Old Man’s War and Zoe’s Tale. He’s also Creative Consultant for the upcoming Stargate: Universe television series. His column appears every Thursday.

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