Avatar has finally done as predicted and knocked Titanic off the top spot for highest grossing film of all time. Cameron has beaten his own record and will probably be smug forever more. For me this feels like a hollow victory of style over substance, one that tells the studios that fancy effects and endless marketing makes for a guaranteed success. Which perhaps it does.
Looking at the figures a different way, Avatar‘s budget was so massive that it needed a record breaking box office to bring about a reasonable percentage return on the studios investment. If claims of a $500 million total production and marketing budget are to be believed, Avatar only made less than four times the investment it cost. The real winner is Paranormal Activity.
Paranormal Activity was made for a meagre $15,000 and made over $140 million dollars meaning a whopping percentage return on investment of 472,962.70% (as shown here). I’m not an expert on investments but this looks like a case for smaller films with viral marketing to get a bigger return for your money. It is worth noting that the second most profitable movie of all time, based of percentage return on investment is The Blair Witch Project. Obviously not every film can have a micro budget but those that do should not be overlooked as they are far more profitable than effects laden epics like Avatar.