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Everyone has noticed the general lack of lower-budget movies breaking through in cinemas these days. It is either blockbusters based on massive, recognisable IPs, or an occasional breakout horror movie. Very rarely, there is a surprise phenomenon that sometimes makes an impact.
It seems studios are increasingly reluctant to gamble on backing any projects at that lower level for any kind of theatrical release.
Matt Damon has explained why he thinks this is. It is because nobody buys DVDs anymore.
Appearing on the First We Feast show, Damon explained that in the past, DVD sales were a massive and crucial part of a movie’s income. Because of this, there was less focus on success during the theatrical run.
Studios knew that about six months after a theatrical release, they would get a second large stream of revenue from people buying the DVD. This revenue would also potentially have a longer tail. Damon compared this to feeling like a studio was effectively reopening the movie for a second time.
Because of this second turning of the financial wheel, there was an opportunity for studios to take chances on smaller, more character-driven films. Now, with streaming technology making the DVD and Blu-ray obsolete, that source of income has been all but completely removed for studios, and forcing a complete financial model change.
He talked through one of his movies, Behind the Candelabra, as a specific example.
The movie cost around $25 million to make and had another $25 million on top of that for “P&A” (prints and advertising – basically full distribution costs, including marketing). That meant the total investment in the movie was $50 million.
Taking into account points and split with theaters, the movie needed to hit around $100 million just to break even. He said in todays marklet that would never be made as it would be simply too much of a risk for studios. Back then, they knew the DVD sales would cover a lot of the investment.
He went on to say that in the 1990s mid-budget, adult-oriented films were his “bread and butter”, maintained by DVD sales.
One of his movies, The Bourne Identity, was largely propelled to legendary status and birthed a franchise on the back of very strong DVD performance. In rentals alone, it surpassed Harry Potter and the Sorcerer’s Stone to have the highest DVD rentals of the year.
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