Movie Budgets Shake Hollywood

THE summer's biggest hit, "Terminator 2: Judgment Day," features such edifying sights as an exploding computer plant, a nuked-out Los Angeles, and a linoleum floor turning into a man before your very eyes. Creating these bits of movie magic, and the bone-crunching story that surrounds them, cost the picture's producers about $100 million. To put this in context, here are a few recently reported facts about the Hollywood film industry:* The average price tag for a major-studio production rose to $26.8 million last year, according to the Motion Picture Asociation of America (MPAA). * Figuring in the amount of time needed to make such a picture, expenditures now flow at a rate of approximately $100,000 per day during production, not including payments to the cast, producers, writers, and the director. * If the movie is studded with stars, a lot of the film's budget may go toward huge salaries rather than "production values" actually visible on the screen. Arnold Schwarzenegger, who toplines "Terminator 2," is one of the stars who receive fees in the $10 million bracket. Tom Cruise and Michael Douglas are among the other members of this club. * It wasn't always like this. Last year's average budget marked a 14 percent increase over the 1989 figure - and a whopping leap over 1980, when you could knock off an average-cost movie for less than $10 million. Movies remain popular, of course, and box-office returns may repay even the largest investment. The total take from United States and Canadian ticket sales was more than $5 billion last year - a very large pie that money-minded producers and investors are eager to slice up. But the gamble is getting so enormous that the big-budget pendulum may swing in a more modest direction one of these days. This summer's "Hudson Hawk," a Bruce Willis action film said to have cost more than $50 million, became a turkey the moment it opened, rivaling such fabled flops as the Michael Cimino western "Heaven's Gate," the Elaine May comedy "Ishtar," and the Elizabeth Taylor epic "Cleopatra" which cost about $44 million back in 1963. Then too, even a success may not easily recoup all the money poured into it. "Batman," a $50 million adventure that was marketed with unusual vigor, had earned more than $250 million a year or so after its 1989 release - an impressive amount, but still a reported $150 million short of the break-even point, given the huge expense not only of making the picture but of advertising and promotion; and this gap may never be closed by future income. If this is the fate of the fifth-highest grosser of all time, what's in store for a success of average proportions, not to mention a mild disappointment or an outright disaster? No such considerations are making Hollywood less active in churning out new pictures. The major studios produced no fewer than 169 movies last year, according to the MPAA, and the output is rising. This summer's reported 51 releases is up from 37 last summer. And that doesn't count new entries from independent releasing companies. This means a lot of options for audiences to choose among when it's time for a night at the movies. But it also means a "product glut" for the industry, with too many pictures elbowing one another for space on your local movie screen. The films threatened most by this situation are the "special" ones that need time to "find their audience" through word-of-mouth recommendations from one moviegoer to another. Hollywood pundits invariably insist that word-of-mouth is more effective than the most elaborate promotion campaign, but it takes time for word to get around. The offbeat film that's sure to build in popularity slowly, steadily, and surely - but not immediately - is likely to be crowded off the screen by another contender (perhaps backed by an aggressive marketing drive) before it has had a chance to realize its potential. Thus the ordinary films unseat the special ones time after time. The only cure is a new boom in theater construction, which has indeed shown signs of taking off in recent months. There are also rare cases when advantage can be gained from clever "counterprogramming," whereby a modestly budgeted film is deliberately released in the very teeth of megabuck competition. "Ghost," not particularly "special" but not endowed with a gargantuan budget either, arrived at the exact moment when last summer's audiences were getting fed up with oversized films and wanted a change. Something similar happened with the more eccentric "sex, lies, and videotape" three years ago. Still, this is hardly a predictable or reliable strategy - and is unlikely to work miracles when Twentieth Century Fox releases its brilliant but hard-to-market "Barton Fink" next month. If the cycle swings and a lower-budget trend does arise in Hollywood soon, the result might be more movies than ever competing for screens and attention. Would they be better movies? Maybe. A move to more modest investments might weed out some of the most money-minded producers and studio bosses, leading the industry toward a slightly reduced obsession with money for its own sake. And maybe not. The startling success of "Easy Rider" in 1969 spurred a large and mostly loathsome wave of low-cost "youth movies" that simply replaced ambitious budget-flaunting with audience-pandering vulgarity and the cheapest of cheap thrills. There's no law that says an inexpensive movie has to be good, or an expensive movie bad. Still, many a small-talent filmmaker has been known to use star-stuffed casts and flamboyant special effects as a smokescreen to hide that perennial Hollywood bogeyman: a lack of new ideas and deep emotions. Look at a list of the costliest movies ever made, and you find many famous titles, from "Die Hard 2" and "Who Framed Roger Rabbit" to "Total Recall" and the first two "Superman" installments. Thoughtful moviegoers agree, however, that most such extravaganzas offer little of lasting value to either th e eyes or the mind.