The Blockbuster Economics Of The Amazing Spider Man

Businesses can guess or forecast based on financial data analysis from previous years. However, trying to guess the predilections of moviegoers is obscure. If an automobile maker wants to produce a new car, the executives can predict the outcome based on predilections of consumers, and the price of oil. Whereas, Film producers have to theorize about what audiences want to watch during the summer. Will they want science fiction, action, or drama? Will the blockbuster economics of “The Amazing Spider Man,” eclipse the modest revenue of Man in black 3? It’s uncertain.
In contrast to other industries, forecasting for Hollywood is not that simple. For example, if “The Hunger Games” was a big hit it could be attributable to factors such as: a built-in
Despite the huge cost of making movies, most studios are still profitable. “They have found the way to monetize the ancillary stream by selling pay-tv and overseas rights, creating tie-in video games, amusement park rides and so forth. The big hits pay for the flops, so the profits are not huge. Matthew Lieberman, a director at PricewaterhouseCoopers, expects growth over the coming years to be around 0.6%”(Davidson 1).Hollywood is, somewhat surprisingly, a remarkable stable industry (Davidson 1). For the past 80 years, this industry has been financed through money borrowed from New York bankers. Surprisingly, big studios that have been on top since 1950 such as Columbia, Disney, Paramount, Warner Brothers, Universal, and 20th Century Fox don’t have enough assets. And, their short-term projects are produced in collaboration with independents. Nevertheless, those studios main asset is the capability to put together the following dissimilar elements: Tom Cruise in a film, set up a location in Doha, the industry’s language of power, what stars, and scripts are good and which are not. “It’s the stuff of easy parody, but it’s worth billions” (Davidson 1). Since even successful films take years or even a decade to break even, for most entrepreneurs is not worth the risk to take the big studios on. As Harvard Business professor Anita Elberse asks, “If I’m sitting on $2 billion, will I invest in a Hollywood studio? “Although other industries have a higher ROI, billionaires like Anil Ambani, who is a partner in Steven Spielberg’s DreamWorks Studios, invest because the glamour helps them with their other business” (Davidson