Hollywood is the place where dreams come true and millionaires are made overnight, right? So it was perhaps prescient that as a kid, Owen Wilson was already dreaming of big-screen riches, performing the Gatlin Brothers’ “All the Gold in California” with his brother, Luke, at his parents’ dinner parties in Dallas. Two decades later, the question is whether Owen and his screenwriting partner, Houston native Wes Anderson, will be able to reprise that hopeful duet. Their two movies together, Bottle Rocket and Rushmore, cost a total of $15 million but have grossed only about $17 million so far. Still, the show-biz powers that be have apparently concluded that the duo’s future efforts will be more successful, because Walt Disney Studios has signed them up to make their next picture.
But is that kind of optimism straight out of Fantasyland? Are these young Texas filmmakers and others like them a good investment? How you answer depends on whether you understand Hollywood’s convoluted economy, where making money—as in, literally turning a profit—has been an antiquated notion ever since Star Wars first arrived in theaters. Here’s how things work these days: You get a studio to finance your movie for, say, the current average, which is $53 million. The studio then spends about $22 million to produce prints of the movie and to advertise and market it. So immediately the pressure is on for you to earn back not just $75 million in ticket sales but more, since studios don’t collect 100 percent of the box office (theaters collect a small percentage). Almost every movie that grosses more than $100 million—a “hit” by current standards—now costs more than $100 million to make.
Fortunately domestic box office is no longer the only source of revenue. There’s foreign box office, an ever-growing piece of the profit pie; many action flicks and star-studded vanity pics that do only moderately well here go great guns overseas. There’s also video, which makes studios money in film rentals and direct sales to the tune of about $16 billion a year. Then there are what’s termed “ancillary markets,” which is anything else a film can sell to make money: laser discs, pay-per-view, cable and broadcast rights, T-shirts, consumer product tie-ins, toys, fast-food deals, and so on. With all these extras, a movie is either a