Movie budgeting
The process of preparing a movie budget is quite tricky and challenging. However, this process is very crucial in determining the success of the movie. The primary function of developing a movie budget is to avoid overspending during production. The budget acts as a guideline on how the money gets spent, and having one ensures everyone is held accountable for money spent. Having the budget also ensures that the crew understands what is feasible and what is out of reach.
Movie producers indeed misrepresent budgets either by understating the figures or overstating. They state a lower value than the real one when they want to seem like there are resourceful and god at getting good deals on the crew and kits. They also understate to avoid the embarrassment that would come if the expensive movie flopped. On the other hand, they may overstate the budget to get better sales deals or to make themselves appear as big-time producers. However, I do think it is unethical to misrepresent movie budgets as it misleads the moviegoers to watching movies they would not otherwise attend.
I agree with the statement that if a movie’s revenues from the box office are more than the budget used, then that movie makes a profit. This statement is true because, given the case that a film gets funded with a budget of two hundred million dollars on production and another one hundred million on marketing and promotion, the movie needs to make at least three hundred million dollars to be profitable.
A film making company asks the crew, including the producers, actors, and directors, to take a small salary upfront and receive a share of the profits to motivate them to do their best job and also to save on taxes. The crew accepts this arrangement in hopes that the percentage of the gross profits might be more significant than the fixed salary upfront. This arrangement makes the process of budgeting more challenging as it is hard to predict how well the movie will perform at the box office.