Famous Actors Effect

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An extensive academic literature exists on the question whether famous actor creative talent affects the financial performance of movies. The research typically accounts for the notion that studios may employ bigger famous actors for movies that are expected to generate higher revenues or that the most powerful famous actors may be able to choose the most promising movie projects.

Several researchers have studied the effect of hiring famous actors on revenues. The findings are mixed: some studies have not detected a relationship between revenues and talent involvement (Austin 1989;Litman 1983; Litman and Ahn 1998; De Vany and Walls 1999; Ravid 1999), while others have
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Price is fixed for each movie in a theater for those of the same age and for those wanting to see a movie during the same time of day. Changes in price do not have to be considered because there will simply not be any. Supply can be considered fixed as well. There are only so many movie theater seats in the Philippines and more will not be built with the excitement of a new movie coming out. Since price and supply are generally fixed, the only variation one can witness is in the location of the demand curve.

When it comes to big projects, famous movie actors are really demanded. According to Ms. Hazel Raymundo, a production manager from GMA, she is willing to go over the budget just to hire the actors. “If you really need the ‘big’ actors in that specific project, you literally have to adjust everything.” she said. She showed us an example of a breakdown of a budget.

1. Pre- production
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Table 1
On the other hand, Ms. Emerald C. Suarez, an executive producer and production manager from ABS-CBN, when asked about the negative effects of hiring a famous actor, she simply said that “famous actors mean high maintenance”, meaning famous actors have lots of demands, in terms of food, wardrobe, air conditioned tents, etc. but then she also explained why producers still hire famous actors despite of its high maintenance. First, famous actors have a massive fan base who will definitely watch the films they star in. Second, famous actors could get sponsors for the movie that can decrease the expenses.

It will also depend on the writer’s material if it will require a famous actor or not. As a director, the way Mr. Rhandy G. Reyes sees success in a film is when he gets to achieve its financial and artistic satisfaction. He said that if it only satisfies its artistic aspect but it did not attract more viewers, the producer might not produce a film with you anymore.

In connection to this, he explained that if there are famous actors starring in this particular film, there will be instant viewers because of the fan base the actors already have. Yet, he is concerned that most of the movies nowadays are talked about because of those celebrities, not because of the content or the message that movie wants to
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