Did Joker Beat Avatar at the Box Office?

Does spending ten times more money to make a smaller return on investment still make any sense in today's Hollywood?

I love going to the movies! I'm the guy who has to see that big new Hollywood movie on the first weekend when it comes out. I buy my tickets early to get good seats and always get popcorn and a drink. Not only do I make my living making movies, but I also spend my hard-earned money on movies. Studios and theatre chains must love me. I'm the ideal worker customer. But like other movie fans, I do spend my time and money discriminately. I always check Rotten Tomatoes for a decent rating and I tend to see movies that would be much better experienced in a theatre than at home on my big-screen TV. It doesn't matter if I know the same movie will be released on a streaming service a short time later. I just have to see it in a theatre because that's still the best place to experience a movie. Then why am I advocating that we should make less of these big-budget, big-screen spectacles and invest in lower-budget feature films?

Don't get me wrong though. I'm still a big fan of big-budget movies. I saw Denis Villeneuve's Dune three times in the theatre including once in IMAX. The Arrakis dunes and Harkonnen's attack on the House Atreides looked and sounded spectacular on the big screen with Dolby Atmos sound. In my job as an Art Director, I love working on big-budget feature film productions. (@DenisVilleneuve, please call me any time!) The politics and stress get just as big in this type of production. When I worked on Star Trek Beyond ($200M budget), we had to start from scratch after working for months because one of the key producers did not greenlight the script. Doug Jung and Simon Pegg (who also co-starred) had to write a new script from scratch in a few months and get it greenlit while hundreds of people were working away in prep because we had to go in camera no matter what. Talk about working under extreme pressure! Despite all the stress though, where else can I help design and create epic new worlds or never-before-seen spaceships? It's only in these big productions where studios are willing to spend literally hundreds of millions that allow the creatives to have a lot of fun and freedom.

These huge productions also employ hundreds of film workers as you can see from the massive list of names in the end credits. These big movies are also very lucrative for the film production centres where these productions are made. Billions of dollars in economic activity are gained in production hubs like Los Angeles, Atlanta, New York City, Vancouver, Toronto, London, Budapest, Prague, Johannesburg, Sydney and a host of other cities that are vying for the same film production money. Film productions pay money directly to the film workers as wages and also spend money on thousands of goods and services that are necessary to make a movie. There are many indirect economic benefits to businesses that rely on film production from movie light rental companies to hotel accommodations to coffee machine rentals. The global film production industry is massive with a total of $247B spent on producing content in 2024. No wonder so many cities compete to get a piece of this big production pie.

When you look at the potential earnings from making feature films, you would think that everyone would want in on the action. But of course, if it was that easy, everyone would be doing it, right? Obviously, not everyone can be James Cameron. His movies have grossed over $8.7B worldwide. Avatar which cost $237M to make grossed $2,923,706,026 worldwide! That's a return on investment of 1234%. That ROI isn't even that high. Joker cost $55M to make and had an ROI of 1962%! That's how the Joker beat Avatar! Of the top 50 feature films that each grossed over $1B worldwide, the average ROI is 807%. Your high-interest GIC doesn't seem so high anymore. The only industries that even come close to this level of profitability and aren't even legal would be the Drug Trade and Cybercrime and Hacking! I don't have any way to verify the numbers of illegal trade because they don't tend to share their bookkeeping data. But Pablo Escobar at his peak was worth about $60B in today's dollars. The highest legal industry Technology and Software (Google, Microsoft, Apple, etc.) makes a paltry 40% return on investment.

But of course, the movie industry is not defined or comprised of only high-grossing feature films. All movie studios are global businesses that are made up of a multitude of revenue streams with a huge network of expenditures. For an entertainment conglomerate like Disney, the movie business is a small part of their portfolio. It also has amusement parks, cable networks, streaming platforms, licencing, sports and vacations. Certainly, not all feature films are profitable. Unlike many other more predictable industries, the movie business is very volatile. The ROI is all over the map. Spending more does not increase the likelihood of returning a good profit.

Perhaps by luck, some sort of alchemy and a lot of producing experience and know-how, good movie producers can turn a profit on most of their feature films eventually. Remember that there are many other costs to releasing a feature film. The most expensive is marketing which could be as much as the cost of production. Obviously, not all movies are as profitable as these top 50 feature films. Some bomb spectacularly! Everyone seems to remember John Carter as the most egregious of these bombs losing $255M even after making $284M at the box office because of the other costs like marketing. But the Director Andrew Stanton and lead actor Taylor Kitsch both went on to do amazing work. However, when a film performs poorly, all of the other productions have to take a collective hit. I worked on Tomorrowland which unfortunately made the top 11 all-time expensive bomb list losing $185M. It looked amazing, but looks aren't everything! As a result of that, Disney cancelled two other big-budget sci-fi movies which I could have worked on and could have employed hundreds of other film workers and generated millions in economic activity.

It used to be a lot more predictable and lucrative with many more revenue streams after the release of a film. In pre-pandemic and pre-streaming days, the marketplace looked some like this.

The film industry took a gut punch like many other industries during the global pandemic in 2020-2022 and then took another blow to the head in 2023 during the Writers' and Actors' strikes. The industry is still reeling and has yet to find its solid footing. During the pandemic filmgoers worldwide got so used to staying home for the movies, they became filmstayers and the box office has never rebounded to pre-pandemic levels. There are no rental DVDs and hardly any retail DVD markets. Cable companies are struggling as they have lost viewers to the streamers and compete for advertising dollars with social media giants. Feature film production has yet to recover.

Globally speaking, film and TV production volume and spending levels are down 50% compared to a year ago. Last year was an outlier where productions ramped up briefly in the first quarter to complete productions before the Writers and Actors went on strike which effectively stopped Hollywood productions worldwide for about 7 long months. Not only are there fewer productions, but the average cost per production is also down as the costs keep going up. So what can we do to turn this around?

Studio filmmaking is expensive

Costs have skyrocketed across the board. Housing has become unaffordable for a lot of people. The price of groceries has gone way up. Airline ticket prices have gone sky-high. I feel I need to get a second mortgage to afford a stay at a hotel. The movie industry is certainly not immune to these rising costs. Mainstream Studio movies are very expensive endeavours. Whether you are doing a sequel or a reboot, or you are developing an original script, that takes a lot of time and money. Development is expensive. There are movie rights, legal fees, production staff office and salaries, financing, concept artists and of course, writers. Art Directors like me come into the picture during pre-production where we really start writing a lot of cheques. All of the departments start to ramp up and crew up. We design and build sets and scout locations. Actors are hired and depending on the movie, some lead actor salaries can be huge. Thousands of creative decisions are made during pre-production that usually relate to costs. Practically everything has a ripple effect that affects the bottom line.

Everyone remembers the diner scene in When Harry Met Sally. This scene was filmed at Katz's Delicatessen in New York City. Even before this movie was released, Katz's was a very popular deli so you can imagine what they would have charged to rent the entire restaurant for this movie shoot. Depending on what the creative and technical needs were, they would have rented for at least a couple of days before the day of shooting in order for the film production crews to prep. This includes the Art Dept, Construction, Paint, Lighting, Grips, Props, Locations, Transportation and Special Effects. All of these workers including everyone else on the crew would belong to at least one of the six film unions (including six chapters of IATSE) that have jurisdiction in New York City. These are all well-paid film workers with health and welfare benefits paid by the production. Lights and grip equipment rentals are also needed. Back at the production office, the Background Casting Dept. is working with Costumes and the Assistant Directors to dress and fit all of the background performers who will play the diners in the background. Props is working with food stylists on the food and drinks. On the day of the shoot, space must be permitted and rented to locate the circus and work trucks. Crews need to be fed. Out-of-town cast and crew need to be housed. And the production costs just go on and on. Costs vary greatly depending on what is needed, but a simple deli scene like this could cost $100K per day. On a big-budget Marvel movie, it could be hundreds of thousands per day. So you can see how expensive studio filmmaking can be!

Smaller is better!

When big-budget movies do well, they do spectacularly well. But as we can see from the Top 50 $1B Feature Film ROI chart above, this is far from a sure thing. So why make one Avatar movie when you can make at least ten low to medium-budget feature films for the same investment? One of these $52M films could turn out to be another Bohemian Rhapsody and make $910,813,521 or could be another Joker ($55M) and make over $1B! If we look at these 80 feature films which cost $60M or less to make from a list of the top 1000 grossing movies of all time, we can see that they all had very impressive ROI. Collectively, all 80 films cost about $2.5B but earned $24.5B! On average, the return on investment is 1292% which isn't bad at all. In fact, it's 485% more than the average for the top 50 highest-grossing films but these smaller films cost a small fraction of their big-budget counterparts.

Increase your odds

Making movies is a very complex and creative process. The same script can become very different movies depending on who is directing it. In fact everyone on a film crew has some degree of influence over the final finished product that is released to the world. In the world of feature filmmaking, the Director is the creative leader. In episodic series productions, the Showrunner is the driving force. But everyone who works under them can also contribute to a show's success or failure. It's a team sport! A low-ranking Production Assistant who accidentally put cream instead of almond milk into a lead actor's coffee might have inadvertently undermined that actor's performance in an important scene. A random conversation from the past inspired Director/Writer Cameron Crowe to come up with the line "Show me the money!" which has become part of our popular lexicon. The chemistry and interaction of all the people in a film production as well as all the outside influences like weather, availability of goods and services, actors' schedules, permit approvals, etc. make filmmaking unpredictable but somehow film people make it happen. Hiring a good crew certainly helps!

There is no definitive way for you to stack the odds in your favour. Just because you make a sequel or do a reboot of a popular IP does not guarantee success. It's usually a safer bet to do so which is why they will make Fast and Furious 11 and their spin-offs. Hiring A-list actors to star in your feature does not guarantee a win at the box office either. There is a long history of box office flops or underachievers despite casting top talent. The only actor who might defy these odds would be Tom Cruise, but he can't be in every feature.

So why not turn the odds in your favour by making a lot more low-budget features rather than a few big-budget ones? Your financial exposure is the same but your odds of making a profit increase manyfold. But it's not just a numbers game. There are also many other reasons that making many smaller films is better.

Diversify your market

I love superhero movies like the Avengers franchise. But too much of the same genre will only attract the same demographic group. Unless we're in Kosovo or South Sudan, the world is a lot more diverse than 18-25 year olds. Gone are the days of the Titanic movie where the same young moviegoer would see the same movie in the theatre 5 or 10 times. Today's moviegoing public is much more fickle and there is a lot more competition for their attention. We have social media as well as all of the streaming services which will show the same movie on the small screen after a movie's ever-shrinking theatrical window.

Most of the biggest box office champs in the $60M or less group from my very unscientific survey are in the horror genre. This is not surprising because this is one of the cheapest film genres to make. By its very nature, much of the horror is seeing the unfamiliar in familiar places. These familiar places are usually small because smaller confined spaces are scarier. It would be a lot more fatal if a zombie attacked you in your car rather than at a football field. Small especially dark spaces are less expensive from a production standpoint. However, this doesn't mean that we need to make a lot more jump-scare movies. Even within this genre, filmmakers like Jordan Peele are expanding possibilities in horror in movies like Get Out. His movie only cost $4.5M to make but grossed $255,751,443 worldwide!

Making more smaller feature films allows filmmakers to explore many more genres and cross-genres. Filmmakers are a highly creative, versatile and hardy bunch. The explosion and accessibility of filmmaking tools to these folks have expanded creative possibilities like never before in the history of filmmaking. This expands the market audience who benefit from having more to choose from. Who would go to Panda Express restaurant if they only sold chow-mein?

Scarcity breeds innovation

Hiring well can increase your odds of success manyfold. A good, strong film crew can move mountains. I did a low-budget feature this year called Eternity but I bet you wouldn't know it was low-budget when you see it. The Producers hired a team of very experienced heads of dept. who in turn hired well. We did not have a lot of budget to work with so we had to innovate, think outside the box and call in a few favours. It of course helped immensely that we had an amazing and supportive Director David Freyne and everyone fell in love with the script by Patrick Cunnane with rewrites by the Director. A smaller film also means that we have a smaller crew. This makes us very nimble and carry a smaller footprint than big-budget production crews. We repurposed our most expensive set many times over with changeovers to squeeze as much production value as we could from it. We minimized costly visual effects shots and only shot what was on the pages of the script. We made creative choices that leaned on economical practical looks rather than building more expensive scenery or VSFX extensions. We had to plan and schedule the shoot very carefully to make the production work within our budget.

I know that this prudent methodology isn't any different (hopefully!) with any film production regardless of scale or budget, but when you're counting pennies, the attention to detail and the experience and knowledge of key crew members are priceless. They can make or break your film production. Big-budget productions can also derail in a big way but they tend to have a lot more fat to trim. This doesn't happen as often anymore, but I remember when we did X-Men 2 back in 2002 when had already built about $200,000 worth of the Danger Room when the Producers decided to cut it from the script. It was almost complete! To be fair, they would have spent 3 or 4 times as much money had they decided to proceed with the scene. On a low-budget film, this loss of budget would be devastating and would require drastic cuts elsewhere to make up the shortfall.

Independent filmmakers are always making short and feature-length films on micro-budgets. Unfortunately, most of these films don't make it to wide distribution due to a lack of funding for marketing. They play the festival circuit and some get sold to streamers or other aftermarkets. But this does not deter indie filmmakers. They have stories that need to be told and they will find ways to make their films. Technology has certainly helped filmmakers of every budget level from indie to mainstream filmmakers like Robert Zemeckis. A.I. will enable filmmakers to make visual effects which only Marvel could afford. Low-budget film crews will always seek out economical and innovative ways to make the shots that are needed creatively.

Empower future filmmakers and talent

When I worked on Insomnia in 2001, that was Christopher Nolan's first big studio feature. His only other feature film was a $9M feature called Memento that only took 25 days to shoot in 1999. If the Production Companies Alcon Entertainment and Warner Bros. did not give a young 30-year-old filmmaker a chance, do you think we would still have the movie Oppenheimer? Well, probably yes because Christopher Nolan was destined to be one of the best filmmakers. Anyone who saw him work on set knew this. But my point is that you would probably only give inexperienced filmmakers and actors a chance on lower-budget films because there is less financial risk. Making more low to medium-budget films opens the doors to a lot more talented people who would otherwise not be given a chance. More opportunities give more women, BIPOC and other underrepresented filmmakers a chance to share their unique viewpoints and stories. This is very important for a healthy society that is growing ever more polarized. We need to give voice to many more people than just the privileged few or the ones that shout the loudest or have the most money. It's the only way we can learn from one another and grow together as a community instead of as opposing tribes.

Empower and multiply the film workforce

Studio film productions are expensive mostly because of the labour costs. However, a larger film does not mean that you would grow the same low-budget crew by the same proportion as a big-budget crew. A low-budget film has one Director and one Director of Photography just like a big-budget film. The core crew remains more or less the same. Bigger productions tend to have a lot more support crew for the same core crew and the number of Exec Producers usually increases with the budget. Construction, Grips and Lighting Depts. usually grow much bigger as the budgets grow bigger. This is due to the larger volume of sets and locations that need to be prepped to meet a film shooting schedule. For instance, a big-budget film production may have many, many expensive sets that take weeks to build. These sets might only be needed for a day or a few days at the most in a shooting schedule. Hence, we need to crew up in a big way to complete these sets in time to make the schedule.

Smaller film productions have leaner crews that need to do a lot in a short time frame. Believe me when I say that film crews worldwide are working as efficiently as they can. Obviously, I'm biased to Canadian union film crews but there are great crews all over the world. Film crews typically work 12 hours a day / 5 days per week. When deadlines come closer, they may need to work 6 or 7 days a week. Occasionally when it really becomes frantic, there might be a second shift of night crew so that work is done 24/7. When I started working in the film industry 24 years ago, film crews were given more time to their craft whether that was a Carpenter building a stage set, a Painter brushing layers and layers of ageing onto a stage set or a Grip installing an overhead grid of pipes to hang movie lights. Now we are expected to do more with less and less time. Film people are a resilient bunch so we push on and always try to deliver the best product with our available resources.

More film productions mean more complete sets of film crews need to be hired. This means that more people are given the opportunity to upgrade to higher positions of responsibility and pay. More people will gain valuable experience working on different projects which will hopefully improve their skills and lead to more work in the future. To grow a skilled film workforce we must be able to pass on valuable skills and experience to future generations. This is vital to sustain a viable and productive film workforce to continue to make films in the future. A.I. is not going to replace filmmakers any time soon.

Award magnets

I'm not saying that if you spend under $60M on a feature film, you will win an Oscar for Best Picture. But at least since 2000, only four big-budget feature films won Best Picture. All the other 20 films spent anywhere between $4M to $58M. Academy Awards politics aside, there is certainly a lot more that goes into winning than budget. Each of these films has a unique story of how they were made. Each one was gifted with a great cast and crew as well as a great script. They were all crafted with care and attention to every detail. But then, we can probably say the same for many big-budget films - except for maybe the part about a great award-winning script.

I think what sets these films apart is that they are small enough in budget to allow Directors, Screenwriters and all the other key players to do what they do best - their jobs. They have creative freedom to make the choices whether it's story, plot, tone, casting, cinematography, music, production design, costumes, etc. without a lot of interference from Studio Executives. It's not that oversight is a bad thing, but it's hard to do something original and amazing when you are serving many, many masters. On big-budget feature films, Execs and Producers of all levels are just doing their jobs too. A lot of money is at stake so it's important to control where money is spent. It's always a balancing act to determine the right amount of control without stifling the creative spirit. There is always a sliding scale of art vs. commercial success. Sometimes these two polarities converge but they are usually at odds. There is nothing wrong with getting a big box office and critical acclaim. It's just f*cking hard!

Revitalize storytelling

Hollywood dominates globally in the feature film space. Certainly, many other countries also produce films for their markets like India, Mexico, Japan, Spain, France, Italy, the United Kingdom, Germany and China. But the U.S.A. has the greatest global reach. With Netflix, audiences worldwide have more access to international cinema than ever before. We can have a film festival in our homes every night where we can enjoy content from around the world. But Hollywood is still the predominate storyteller which is why it matters what stories it tells the world.

Many believe that the last Golden Age of Hollywood was in the late 1960s to 1970s. There's even a course on this at the University of Toronto. Some also call this era the New Hollywood. This was a period when a lot of young Directors like George Lucas, Steven Spielberg, Martin Scorsese, Francis Ford Coppola and Mike Nichols made feature films in the studio system that pushed the norms of earlier filmmakers. They were inspired by the French New Wave Cinema and wanted to tell their unique stories about subjects that were considered taboo like sexuality, drugs and violence. The Graduate is the first film from New Hollywood. They told stories that mattered socially in their time. Studios gave these young filmmakers a lot of autonomy. None of their films had a huge box office until Jaws and Star Wars: The New Hope came out. That changed everything. The blockbuster was born.

For all the reasons noted above, we need to make even more low to medium-budget feature films so that we can revitalize the art of storytelling in cinema. Of all the cultural delivery systems, feature films are still the most portable and accessible format. I love a long series but I don't have the hours or bladder endurance it would require for me to sit through a season of Game of Thrones in the theatres. A feature film can be enjoyed in the theatre, at home, on your phone or flying 30,000 feet in the air during a long flight. It's what we reference when we talk to our friends. It shows us an imagined world that influences our perception of the real world. It is not a mirror of our society but if we were doing our jobs right, it should look real to you. Even if you have many other reference points, seeing a version of reality on the screen affects how you perceive the world. For most of my life, I just accepted that all superheroes had to be White American, preferably male. We see stereotypes and tropes play out throughout cinematic history in Hollywood movies. The Writers and other creatives who made those films also live in the same world, so they may be reflecting what is already present in society but it gets amplified by the big screen.

Stories are the glue that holds us together as a civil society. What are laws but a set of stories that we all believe in that is supported by an enforcement and justice system which are also inventions of human imagination. We are living in a chaotic world where it is acceptable to question the validity of the institutions like free press, justice, law enforcement, science and democracy. A.I. is blurring the line between what's real and fake. As much as I enjoy a good Avengers movie, what do I really learn when Thanos snaps half of all living creatures out of existence? We also desperately need filmmakers to make more movies that explore and question who and what we are as a human species, a citizen of the world or a parent and a good neighbour. Yes, we want to be entertained too, damn it! But we also need to be challenged and moved to tears. It's not easy to make great cinema. However, it's much more achievable and less risky with a low to medium-budget movie than a $200M feature film. You have the ability to take bigger chances and push a little harder with these smaller film productions. The incredible thing is that the more of these beautiful, ugly, funny, sad, insightful and original feature films we make that matter, the more it builds an audience which in turn builds momentum to do more. Before you know it, someday they may call this the last Golden Age of Hollywood. I think a lot of us would want to be a part of that. Let's make more movies that matter!