Taking advantage of being a Haas student's partner, today I got to attend a talk from Bill Block, a big-shot Hollywood producer who, later this week, will be attending the Oscars with District 9. The film is about aliens (i.e. it's fantastic) and Mr Block was here to tell us about the economics of show business.
"It's show business, not show art," was his opening quotation, so we knew where we stood. He then drew us into his world of massive spreadsheets, where foreign distribution rights, DVD sales, loan interest rates, star salaries, and estimated box office receipts are entered...and down at the bottom a magic number pops out that tells him what budget he can offer the director.
While I wanted to know the answer to questions such as "what's it like working with Johnny Depp?", the business school students lapped up "amortized foreign debt" etc. Still, a few non-financial nuggets of wisdom were offered for those of us more show than business inclined:
- Romantic comedies with "married" in the title sell really well overseas.
- Make a movie that costs under $40m or over $100m - anything in between is risky.
- Stick to horror and comedy if you want to be successful...
- ...preferably in 3D.
And who are we to argue with the man who funded The Blair Witch Project, Paranormal Activity (made for $15,000, took over $100m), and The Hangover. There is, obviously, no business like it.
And where is creativity on this graph?
