Tuesday, January 12, 2010

The Saw Movies, and Diminishing Marginal Returns, Pt 2

Well, my econometric predictions were way off. Saw 6 only grossed $27,693,292. However, this still proves the broader point that the marginal returns are diminishing. But it looks like they are diminishing at a faster rate than my simplistic model could predict
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But this was far from a box office failure. The production budget for Saw 6 was 11 mil, so that's a pretty good gross margin. There will continue to be new Saw movies until the expected marginal revenue falls below the necessary cost of production and distribution. Eventually, they might start releasing them direct to DVD (or internet), which would be a lower cost/lower revenue alternative.