Film Budget and Production Expenses Explained (2022)

How do people make movies? Writers, actors, directors, surely play a part, but there’s something more important than a movie’s creators, and that thing is money. Movies need money; that’s an irrefutable fact. And it’s the sole goal of the financier(s) to get a positive return on their investment. We’re going to look at how producers use production budgets to outline a course to positive net return. We’re also going to break down movie production budgets at three levels: low, mid, and high end. By the end, you’ll know how production budgets are made and the most expensive movies of all-time.

Film Budget Examples

Background on production budgets

What is a production budget? A production budget is simply the agreed upon cost between a financier and a producer for the creation of a product. That product could be a fine-tailored suit, a chandelier; or in this case, a movie.

Production budgets are separated by two sections: above the line and below the line. Everyone on a film crew falls on either side of this division.

Above the Line

Above the line means “creative talent” and their associated production costs. Personnel on this side of the line include writers, directors, producers, and talent.

Below the Line

Below the line means everyone and everything that’s not above the line – and their associated production costs. Personnel on this side of the line include crew, craft services, and non-key cast.

Production budgets vary greatly between projects. But if one thing’s for certain, it’s that organization is key. Check out this video for more on the process of film budgeting.

(Video) Feature Film Budgeting - How Much Will Your Film Cost to Make?

Film Budget Breakdown • An Introduction to Film Budgeting by RocketJump Film School

Obviously, there’s a lot that goes into film budgeting. We’ll have some film budgeting resources for you at the end of this article, but first, let’s take a look at some production budgets at low, mid, and high tiers.

Video Production Budgets

Production budget vs total budget

It’s important to note that production budgets only account for the production costs of a movie. Oftentimes, marketing and distribution cost a hefty penny as well. Check out this next video to see the marketing side of the film-world in further detail.

Movie Budgets • Marketing: Crash Course Film Production

Many people get confused when they hear that a movie with a production budget of $100 million grosses $15o million worldwide and loses money. But the brutal fact is that movies get sunk by the massive costs of marketing and distribution all the time.

Film Budget Examples

Low-end movie production budgets

A low-budget movie is a movie that’s (usually) financed through self-financing or small private funding.

There’s some conjecture as to what the low-budget movie range is (especially when accounting for inflation) – but most analysts agree anything below $5 million USD can be characterized as low-budget.

Examples of low-budget movies:

  • Primer (2007) – Budget: $7,000
  • Monty Python And the Holy Grail(1975) – Budget: $400,000
  • Get Out (2017) – Budget: $4.5 million

These three movies – Primer, Monty Python And the Holy Grail, and Get Out – represent three tiers of the low-budget movie spectrum.

Primer was self-financed on a shoestring budget by writer/director/star Shane Carruth in true independent film fashion.

Monty Python And the Holy Grail was financed in large part by friends of the Pythons, including band members in Led Zeppelin and Pink Floyd.

Get Out represents the final rung of the low-budget spectrum; that of the low-budget production company. Blumhouse Productions has made a fortune out of strategically picking horror-themed projects that they can finance with small-budgets. Get Out was no exception.

This next video takes a look at how filmmakers have made the most out of “no-budget” features.

(Video) Film pre-production explained - from script to budget! How to plan film for new filmmakers
(Video) How To Budget A Film Production

Low Budget Productions • Lessons for the No-Budget Feature by The Royal Ocean Film Society

There’s no doubt about it: many of the world’s best filmmakers began their careers making movies with miniscule production budgets. Some preferred to stick in that production tier; others moved on to more expensive projects.

Production Budget Examples

Mid-level movie production budgets

A mid-budget movie is a movie that’s (usually) financed by a studio; with assistance from grants, awards, and, or government subsidies.

Mid-budget movies bridge a considerable gap between low-budget and blockbuster movies. With inflation, it’s hard to say what that gap is – but for the sake of clarity, we’re going to say ~$5-$50 million.

Examples of mid-budget movies:

  • A Quiet Place (2018) – Budget: $17 million
  • The Grand Budapest Hotel (2014) – Budget: $25 million
  • Knives Out (2019) – Budget: $40 million

Mid-budget movies are some of the most dangerous movies to finance. Why? Because there’s almost no way to tell whether they will be a box-office player. The three movies above all did an excellent job of maximizing their budget – which undoubtedly helped their performance at the box-office.

Let’s check out a video on how The Grand Budapest Hotel was made on a mid-end budget.

How The Grand Budapest Hotel Was Made on a Budget • Subscribe on YouTube

(Video) The Production Budget

The Grand Budapest Hotel reportedly grossed $172.9 million against a $25 million budget. That’s a great return on investment by anybody’s standards. Of course, the film had a lot going for it; including an auteur director in Wes Anderson, and a bevy of stars in Ralph Fiennes, Willem Dafoe, Edward Norton, Tilda Swinton, and more.

Mid-budget movies have largely been relegated to two tiers in recent years: the Academy-focused and the streaming service tiers. Movies must play in theaters (or have been planned to play in theaters) to be eligible for the Academy Awards. For these movies, think Parasite ($15.5 million) or La La Land ($30 million). Other, more commercially-focused mid-budget movies, like most Netflix movies, are simply concentrated on attracting viewers.

This next video takes a look at the disappearance of the mid-budget movie.

Production Budget Examples • Why Don’t They Make ‘em Like They Used To? By Chris Stuckmann

Chris Stuckmann makes a lot of great points about mid-budget movies; streaming, creative changes, and theater exhibition have all played a role in the decline of mid-budget movies.

Blockbuster Movie Budgets

High-end movie production budgets

A high-budget movie is a movie that’s almost always financed by a film studio. High-budget movies are synonymous with blockbuster cinema; think Jurassic Park ($63 million) and Marvel’s The Avengers ($220 million).

High-budget movies are almost exclusively relegated to the $100 million+ tier. If this article was longer, we’d have more than three tiers – but it’s not, so we’ll say a high-budget movie is a movie with a budget of more than $50 million.

(Video) How to Budget for a Short Film

Examples of high-budget movies:

  • Dune (2021) – Budget: $165 million
  • John Carter (2012) – Budget: $250 million
  • Pirates of the Caribbean: On Stranger Tides (2011) – Budget: $379 million

Marvel’s Avengers movies have grossed billions of dollars at the box-office whilst captivating the minds and hearts of millions. But for every box-office hit, there’s a box-office bomb. In recent years, movies like The Last Duel ($100 million) and Mortal Engines ($100 million) cost studios enormous amounts of money; which goes to show you that big stars, like Ben Affleck and Matt Damon, and big directors, like Peter Jackson, sometimes aren’t enough to carry a big-budget movie.

Up Next

Film Budget Planning

Now that we’ve reviewed the industry details regarding movie production budgets, let’s move on to film budget planning. In our next article, we’ll show you how to outline film production costs step-by-step. By the end, you’ll know everything you need in order to start budgeting your film.

Up Next: Budget Planning Tips →

FAQs

What are the costs of film production? ›

Average Cost of Making a Movie

The average cost of making a feature film is between $100 million and $150 million. Keep in mind that this is an average, meaning that there are feature films that cost less than $80 million and those that cost more than $200 million to produce.

What does budget mean in film production? ›

A production budget is simply the agreed upon cost between a financier and a producer for the creation of a product. That product could be a fine-tailored suit, a chandelier; or in this case, a movie. Production budgets are separated by two sections: above the line and below the line.

How do you determine a film budget? ›

In order to estimate your film's budget, you need to decide how many days you aim to be in production. Studio films get by on shooting only one page of script a day. The majority of films average about five pages, and a low-budgets can plan to shoot as many as ten.

How much does it cost to do a film budget? ›

The average film production budget is $30,000. However, the type of movie being made will determine how much money is spent on it. For example, an independent film might have a budget as low as $5,000 while a blockbuster-type movie could cost up to $200 million.

Why budgeting is important in production? ›

Some of the main advantages of using a production budget include: It helps an organization balance sales, inventory and production, making it less likely that they would overproduce an item or not make enough units to cover the demand.

Why is budget important in film? ›

Having a well-thought-out movie budget gives your film a better chance of being successful, in terms of quality and profits. It doesn't necessarily matter how much money you have, especially if you're working on micro-budget short films — what matters is how you budget and utilize the money and resources you have.

How do you prepare a production budget in units? ›

You can follow these steps to calculate a production budget:
  1. Set the time frame and product. ...
  2. Perform beginning inventory. ...
  3. Run the sales forecasting. ...
  4. Determine planned inventory. ...
  5. Calculate required production.

What is production budget example? ›

There are mainly three types of components of the production budget, which include the Direct Material budget, the Direct Labor budget, and the overhead cost. Examples include rent payable, utilities payable, insurance payable, salaries payable to office staff, office supplies, etc.

What does film budget include? ›

Items Included within the Budget

In general, the budget includes all costs relating to the development, production, and post-production of a film. Thus, the budget includes, for example, costs of acquiring the script, payments to talent, and production costs.

Who makes the budget of a film? ›

Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film.

What percentage of a film budget goes to the producer? ›

Producer Fees

The rule of thumb for producers is 5% of the budget, but that rule only applies up to about a $5 million budget. Generally, the fee is based on what the producer has earned in the past, and caps out in the $150,000 to $250,000 range for most producers of indie films.

Does production budget include actors? ›

Movie budgets can average around $100 million for a big budget film, meaning a lot of tickets have to be sold to break even. Major costs include paying cast and all staff their salaries, CGI and special effects, and marketing.

What percentage of a film budget goes to post-production? ›

Post-production is relatively the most expensive for the smallest films, with post-production for films over $5m typically being around 7% to 9% of the total budget.

Is usually the most expensive part of film production? ›

Marketing: The most important part of how to make a movie as well as an expensive magic potion that it requires is its marketing. With all the huge investments of more than a hundred million dollars, you don't want it to go unheard.

How do you calculate profit in a movie? ›

Simply put, the formula for calculating RoI is to divide the film's box office earnings by the production budget and multiplying the result by 100. The resulting number is expressed as a percentage. So, a film that made a 200% RoI made 2 times its production budget.

Do low budget movies make money? ›

Low Budget Films Can Make Money

In fact, sometimes keeping the budget low provides more margin for profit. If the film flies and costs little to produce, then you are on to a real winner. The classic example of a low budget indie film that made it big, is The Blair Witch Project.

What are 2 key benefits of budgeting? ›

Benefits of budgeting include providing "guardrails" (i.e., designated limits) for spending, achieving financial goals (if savings is included as a fixed "expense"), and for peace of mind.

What is budget explain? ›

A budget is a spending plan based on income and expenses. In other words, it's an estimate of how much money you'll make and spend over a certain period of time, such as a month or year. (Or, if you're accounting for the incoming and outgoing money of everyone in your household, that's a family budget.)

What do you mean by sales budget and production budget explain in detail? ›

The sales budget then calculates the amount of income it will earn from sales activities over the coming time period. The production budget uses the data from the sales budget to calculate the number of products the company has to produce over the period of time.

What's the biggest budget for a movie? ›

Pirates of the Caribbean: On Stranger Tides officially holds the record, with a budget of $378.5 million, while The Hobbit trilogy stands as the most expensive back-to-back film production, with combined costs of $623 million after tax credits.

What is a low-budget film called? ›

A micro budget film is that which is made on an extremely low budget, sometimes as little as a few thousand dollars. An example of such would be the popular 1992 film El Mariachi, in which the director Robert Rodriguez was unable to afford second takes due to the $7000 budget.

Which of the following is needed to prepare the production budget? ›

Correct Answer: Option b. Direct materials purchases, direct labor cost, factory overhead cost.

What are the formula needed to calculate the cost of production? ›

Total cost of production= Cost of labor Cost of raw materials ie Overhead costs on manufacturing.

How do you calculate monthly production? ›

Calculate Productivity

By dividing the number of products produced by the man-hours involved, you calculate the average production rate. As an example, if your employees produced 800 units in the 200 total man-hours during the week, divide 800 by 200 to calculate 4 units per man-hour.

What are the different types of budgeting? ›

Different types of budgets
  • Master budget. A master budget is an aggregation of lower-level budgets created by the different functional areas in an organization. ...
  • Operating budget. ...
  • Cash budget. ...
  • Financial budget. ...
  • Labor budget. ...
  • Static budget.

How do you calculate normal loss in production budget? ›

Generally the cost of normal loss is absorbed by the cost units. Normal Output = Units introduced – Units of normal loss Normal Cost of Normal Output = Total Cost – Scrap value of Normal Loss. and if there is any scrap value then that will be shown in amount column of the credit side corresponding to lost units.

What are fringes in a film budget? ›

“Fringes” in film, TV, commercial and new media production are employer-paid taxes, fees and health / pension plan contributions that are paid to outside agencies on top of your crew's wages.

What percentage of movie budget goes to actors? ›

Now, thanks to Vanity Fair, you can rest assured that the Hollywood hierarchy is alive and well. In the video below, VF estimates the breakdown of a $200 million blockbuster. Unsurprisingly, above-the-line talent scores the biggest paycheck; Lead Actors 1, 2, and 3 comprise 9% of the film's entire budget.

Why is film expensive? ›

Film cannot be produced as cost-effectively as in the past, and due to shortages in both personnel and material, film cannot be made quickly enough to meet demand and is thus in short supply; therefore, prices have risen.

What percentage of profit does a producer get? ›

For example, a producer may receive 20% of the total production fee before principal photography, 50% during photography, and then the rest after. Most producers are also promised a cut of the film's profits. Again, how high of a percent you get usually depends on your reputation and level of success.

How much do producers make per movie? ›

A 2017 report from the Hollywood Reporter found that top-earning producers can make millions of dollars per film, while the average studio producer makes around $750,000 per film and first-time studio producers earn about $250,000 per film, though these figures are dependent on an individual producer's compensation ...

How do movie producers make profit? ›

After the release of the movie, it earns revenue from theater collections, selling of distribution rights, selling of broadcasting rights, selling of DVDs and VCDs etc. If this revenue exceeds the expense, then the movie has made a profit. This profit goes to the producer. Thus the producer earns money from the movie.

What percentage of a film budget goes to marketing? ›

When calculating a marketing budget, the rule of thumb is to spend 50 percent of the rest of the production costs (pre-production, filming and post-production) [source: Vogel]. So if a movie costs $100 million to make, you'll need an additional $50 million to sell it.

What are post-production expenses? ›

What are post-production costs? Post-production costs are the expenses incurred in order to get the gas from the wellhead to market. These costs include gathering, compression, dehydration, processing, fractionation, marketing, treating, handling and transportation.

How much do low-budget film actors make? ›

It's the first time in 10 years that the low-budget rates have been raised. Actors can currently be paid as little as $100 a day under the union's Ultra Low-Budget Agreement, which covers independent films produced entirely in the United States for less than $200,000. Minimum pay will go up to $125 a day.

How much does post-production cost? ›

₹ 25,000 per two hours Uncertified, only unencrypted.

What is the lowest budget movie that made the most money? ›

The Blair Witch Project

Despite just a $60,000 budget, it went on to make $246.8 million worldwide at the box office, including $140.5 million domestic. This number will likely even more surprising when we inform you that the film was made in eight days, and there wasn't a finished script when filming began.

How do directors get paid? ›

Directors earn salaries based on the type of work assigned during the film production. The main director earns the highest salary, while directors taking numbered positions sometimes work for an official title and for the experience.

How are film profits divided? ›

As if the film is released in multiplex, 50% of the first week's collection, 42% in the second week, 37% in the third week and thereafter fixed 30% share is given to the film distributors.

Do producers make more than actors? ›

Definitely producer earns more if the movie is a highly profitable one(Super duper hit). In all other situations, the actor or the director earns more depending on their publicity.

Can an independent film make money? ›

How likely is it for an indie film to become profitable? Statistically speaking, the picture is quite bleak – 97% of independent feature films fail to turn a profit. Most filmmakers assume they will be in the lucky 3%, not realizing that turning a real profit with a low/micro-budget film is practically unheard of.

What happens when movies make less than budget? ›

In the film and media industry, if a film released in theatres fails to break even by a large amount, it is considered a box office bomb (or box office flop), thus losing money for the distributor, studio, and/or production company that invested in it.

What type of movies make the most money? ›

CharacteristicRevenue in billion U.S. dollars
Adventure64.95
Action50.56
Drama35.68
Comedy33.63
6 more rows
14 Mar 2022

What is the negative cost of a film? ›

Negative cost is the net expense to produce and shoot a film, excluding such expenditures as distribution and promotion. Low-budget movies, for example The Blair Witch Project, can have promotional expenses that are much larger than the negative cost.

What was the most expensive movie ever? ›

Pirates of the Caribbean: On Stranger Tides officially holds the record, with a budget of $378.5 million, while The Hobbit trilogy stands as the most expensive back-to-back film production, with combined costs of $623 million after tax credits.

How much does it cost to pay a film crew? ›

Generally, hourly rates for a camera crew range anywhere between $25/hour to $300/hour depending on the service. In order to complete your project, you'll need to budget everything from crew members, to equipment type, to additional technicians.

Which movie cost the most to make? ›

Here Are the Most Expensive Movies Ever Made
  1. 1 Pirates of the Caribbean: On Stranger Tides — $422M.
  2. 2 Avengers: Age of Ultron — $386M. ...
  3. 3 Avengers: Endgame — $350M. ...
  4. 4 Avengers: Infinity War — $316M. ...
  5. 5 Pirates of the Caribbean: At World's End — $300M. ...
  6. 6 Justice League — $300M. ...
  7. 7 Solo: A Star Wars Story — $275M. ...
19 Jul 2022

Can a cost be negative? ›

So yes, in general, costs can be negative. Note though that in economics, it doesn't usually make sense to speak of costs in isolation or benefits in isolation. Instead we usually look at the net benefits (i.e. all benefits minus all costs) or net costs (all costs minus all benefits).

What is a negative cost statement? ›

Negative cost means the actual cost of producing and shooting a film. It also includes the cost incurred for manufacturing a completed negative. It is the costs incurred up to the production of the completed or final negative. Negative cost does not include the costs of prints or advertising.

Why is cost of sales negative? ›

If your number of returns exceeds sales for a certain accounting period or there is a correction on the overstated costs from a prior accounting period… it is possible to have a negative COGS.

What movie has the most f words? ›

The 10 Most Profane Movies of All Time, Ranked by The Number of F-Bombs
  • Casino (1995) - 422 f-words. ...
  • Nil by Mouth (1997) - 428 f-words. ...
  • Summer of Sam (1999) - 435 f-words. ...
  • Uncut Gems (2019) - 560 f-words. ...
  • The Wolf of Wall Street (2013) - 569 f-words. ...
  • F★CK (2005) - 857 f-words. ...
  • Swearnet: The Movie (2014) - 935 f-words.
1 Jun 2022

What makes a movie successful? ›

Star power, acting expertise, rousing reviews and public ratings are all key factors that influence our decision to see a movie. Researchers from UTS, HEC Montreal and the University of Cambridge compared these factors across 150 studies to boil down the formula for box office success.

Does a film budget include actors salaries? ›

Hollywood is a big business, raking in billions of dollars a year in revenues and profits. Movie budgets can average around $100 million for a big budget film, meaning a lot of tickets have to be sold to break even. Major costs include paying cast and all staff their salaries, CGI and special effects, and marketing.

What percentage of a film budget goes to post production? ›

Post-production is relatively the most expensive for the smallest films, with post-production for films over $5m typically being around 7% to 9% of the total budget.

What is a producers day rate? ›

In commercial work, the producer day rate is typically in the $450 to $900 range, but can be much higher.

How much do production companies charge? ›

Average cost for Film Production ranges from. $650 - $900 /hr

Hiring film producer, you will likely spend between $650 and $900. The price of film production can vary greatly by region (and even by zip code).

What is the most successful low budget film of all time? ›

One of the most successful low-budget films was 1999's The Blair Witch Project. It had a budget of around $60,000 but grossed almost $249 million worldwide. It spawned books, a trilogy of video games, and a less-popular sequel.

Which movie took the longest to make? ›

The list excludes projects comprising individual films not shot over a long period, such as the Up series, The Children of Golzow, or the Harry Potter series. The Other Side of the Wind holds the record for a movie to be in production for the longest time.

Is marketing included in movie budget? ›

The budget excludes film promotion and marketing, which is the responsibility of the film distributor. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and/or out-of-pocket funds.

Videos

1. Video Budget Template: Creating Yours and Determining Costs for Your Video Production
(Pull My Focus)
2. Independent Film BUDGET BREAKDOWN
(Crimson Engine)
3. Making It - Ep1 - Budget Bombshell (Film Budgeting & Script Breakdowns)
(StudioBinder)
4. How to schedule and budget a Film or TV Show
(Go For Production)
5. Excel Budget Template | Automate your budget in 15 minutes
(Work Smarter Not Harder)
6. Complete Guide to Film Budgeting | Lesson 1 By Piyush Pande
(Piyush Pande Films)

Top Articles

Latest Posts

Article information

Author: Jamar Nader

Last Updated: 12/04/2022

Views: 6255

Rating: 4.4 / 5 (75 voted)

Reviews: 82% of readers found this page helpful

Author information

Name: Jamar Nader

Birthday: 1995-02-28

Address: Apt. 536 6162 Reichel Greens, Port Zackaryside, CT 22682-9804

Phone: +9958384818317

Job: IT Representative

Hobby: Scrapbooking, Hiking, Hunting, Kite flying, Blacksmithing, Video gaming, Foraging

Introduction: My name is Jamar Nader, I am a fine, shiny, colorful, bright, nice, perfect, curious person who loves writing and wants to share my knowledge and understanding with you.