The latest episode of my Economics Explained podcast, Money on the Screen, explores the economics of the film industry. What affects the return on investment in films? Should governments subsidise film productions as they do in Australia?
In the episode, I discuss the economics of the film industry with my good friend Tim Hughes, who spent ten years working in the film industry in the UK and Australia. Tim worked as a crew member on TV shows such as Peak Practice, The Bill, and Coronation Street and on film productions including Tomb Raider, Scooby-Doo, and Swimming Upstream.
Currently, Tim’s a Brisbane-based businessman who’s had a range of ventures over the years. His latest business is Urban Ergo, a distributor of Humanscale ergonomic products which improve health and comfort at work. Despite his change of career, which he talks about in the interview, Tim has never lost his passion for the film industry.
In our discussion, Tim explains that to maximise the profitability of a film you need to see the money on the screen. You don’t want to waste money on expensive catering or fancy hotels. You want to see the money that’s spent end up on the silver screen, so:
…if you get together a $1 million budget, it looks like a $1 million film or, ideally, it looks like a $10 million film that cost $1 million.
As noted in the conversation, I’m a long-time critic of government subsidies for the film industry. For instance, see my Policy magazine article:
Special rates for special mates: The case against film industry subsidies
Regarding the issue of local Australian content on streaming services such as Netflix, an issue Tim and I discuss in the episode, the latest news is:
Change is coming: Netflix, Amazon, Apple get the jump on regulation