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Recently I re-watched Panic Room after almost a decade and the movie still holds up to this day. Anyway, my question regarding this is, after watching the movie I went to Wikipedia and saw that the movie's budget is $48 million.

How did this movie cost that much?

The entire movie is set inside the house, and the only big actors are Jodie Foster and Forest Whitaker. Even if they gave both these actors $5 million each, there is not much that would cost $38 million. There aren't many big explosions or fight scenes. There are movies with similar production quality which didn't even cost half of this movie.

There's also the fact that this movie came out nearly two decades ago. $48 million then is worth $70.7 million in 2021.

Is this just another example of Hollywood accounting to evade taxes?

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    Question for OP: Do you have an understanding of what usually goes into a movie budget? Of the scale of a modern film production and their typical costs? As written, it sounds like that could be an issue. It's not just the actors who get paid, for one... – user45266 May 13 at 5:40
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    "the only big actors are Jodie Foster and Forest Whitaker" - I'd class Jared Leto as a big actor. The film also starred Kristen Stewart but that was her first major role, so she wouldn't have been considered a "big actor" at the time. – F1Krazy May 13 at 9:19
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    There were 145 shooting days for Panic Room. 80-100 days is considered a long period for Principal Photography. Fincher is renowned for the number of takes he makes. – iandotkelly May 13 at 13:54
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    @Paulie_D "Jared Leto wasn't a big actor 20 years ago" – he had some juice. He got good reviews for Prefontaine and Requiem for a Dream, and he'd been in The Thin Red Line, Girl, Interrupted, and American Psycho. Plus the role in Panic Room is big, and Fincher might have wanted him specifically, having directed him in Fight Club. – Paul D. Waite May 14 at 8:54
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    @F1Krazy: Don't forget Nicole Kidman, who was originally cast and even started filming, and thus might have been paid at least partially. Also, actors aren't the only people working on a film, and David Fincher and Howard Shore are no less A-listers in their fields than Jodie Foster and Forest Whitaker are in theirs. – Jörg W Mittag May 14 at 10:21
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Update: I've included some feedback from the comments. Thank you all.

Never forget that movies are to a certain degree illusions. In this case, it means the conclusions about the production you can draw just by watching the movie are limited. I haven't watched the movie in recent times but found enough resources online to explain certain aspects of the prodcution.

Locations

Yes, the movie is set inside a house, but all in all 4 filming locations were used, 3 for exterior scenes and the house was actually a set built in the studio. Each location shoot means people and equipment has to be transported, permits acquired, people hired to fence off the general public, and possibly extras need to be hired. In other words, it is expensive.

Building the set costs 6 million. They had a 3D model of the house which was useful to better plan camera positions and save a bit of money. Nevertheless that's a big chunk of the budget.

Unplanned Events

Nicole Kidman was originally casted but had to leave for medical reasons after the first 3 weeks of filming and was replaced by Jodie Foster. Consequently some scenes had to be re-shot. Also, Jodie got pregnant but a simple costume change (sweater instead of tank top) was enough to hide it, still any change costs a bit extra - although this is negligible.

Technical Aspects

When you watch a movie you often overlook some special effects and especially visual effects or CGI. These things costs a lot although they aren't that noticeable most of the time. Fincher is known for frequent use of visual effects and the long post-production phase is supporting this. CGI was more expensive to make back then.

Another big cost factor is filming with multiple cameras. They used two cameras, which also means two sets of very pricy lenses. And film stock. While one camera+lens bundle for high-end productions is around 500k-750k it is not clear how much it cost back then. However, not only cameras but all equipment costs are often shared amongst several productions over time, since most equipment is reusable, hence the impact on the budget might be smaller. Alternatively they could have rented the bundles for a couple of thousands per day. One important point is that filming with cameras from 2 angles complicated the lighting setup. You need more time to conceptualise, set up and tweak lighting when filming with two cameras simultaneously. More time on set means more saleries to pay.

Lastly, don't forget there are many more people working than the actors. Filming was done for half a year, followed by something about 9 months of postproduction. I haven't found dates for the pre-production phase. The saleries, including Foster's 12 million and 4 million for the script make essentially the majority of the budget.

Conclusion

All this taken together, a budget of 48 million is perfectly fine for this movie. Converting it to today's money is problematic since there are also drastic cost savers nowadays, like shooting digital instead of using film. So you cannot compare a movie made back then with a movie made today well.

References

There's a good documentary which helps you to get a better feeling of how much work such a production means: YouTube

What equipment they used: Shot on what

Some facts I mentioned were taken from IMDB and Wikipedia.

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    There is at least one scene that uses significant CGI, and likely plenty of scenes where CGI is also involved but you don't notice it. (I was surprised when watching the making of Fincher's next film Zodiac how much CGI was involved.) Also, the script for PR cost $4 million: en.wikipedia.org/wiki/Panic_Room#Production . – BCdotWEB May 13 at 13:01
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    +1, the only minor issue with this answer IMO is including the cost of the lenses. Those are capital expenses. You don't buy the lens and then throw it in the bin after each movie. But granted, there are depreciation costs. – JBentley May 14 at 10:13
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    How pricy are pricey lenses then? I'm surprised to hear that they are expensive enough to be a significant factor in this size budget? – Martin Smith May 14 at 12:32
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    @MartinSmith I don't know about the price back then. Nowadays you have to calculate with 500K up to 750k for one camera and lens bundle (Panavision doesn't sell these lenses separately) or around 4000$ a day when renting one bundle. When cameras and lenses or other equipment is reused for other productions, typically each productions pays a share which is of course smaller than the total price. – Matt May 14 at 12:51
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    These expenses all seem to be common to most films (even star recasting is not that uncommon). The question implies that this film was significantly more expensive than other films in its genre, so the answer should explain the unusual expenses. – Barmar May 14 at 14:25
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According to wikipedia, one quarter of the $48 million went to pay Jodie Foster for her role. According to both wikipedia and IMDb, screenwriter David Koepp was paid $4 million for the script. The set seemed to have cost about $6 million to construct (it's apparently an actual brownstone, that's now worth closer to $8 million). I don't know exactly where the other $26 million went, but the movie did spend several months in post-production (not to mention the salaries of all the other cast and crew). As F1Krazy mentioned in a comment above, Jodie Foster and Forest Whitaker aren't the only big names in the movie.

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    Much better answer than the accepted one imo, it's clear and concise and doesn't lose itself in speculation and negligibilities. – MaxD May 14 at 13:06
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Some people don't know but commonly, the main cost is marketing.

For example, Harry Potter:

Book Advertising budget was $3.5 million, Movie Advertising budget was $142.7 million, DVD/Video Advertising budget was $68.5 million and Merchandise/cross-promotion Advertising budget as $54 million. IN TOTAL $268.7 million (Gosh!!).

tips: the book was marketed, so it marks the difference between a regular book and a best seller (marketing).

For example, if you want to promote a movie, then a good way to do it, its if your movie is mentioned in the news (and no, it is not for free). In this case, this movie was promoted in the news:

  • A journalist started talking about insecurities and the increase of crime and how people could protect themselves. So, it shows some local companies that install some alarms and it ends the note talking about the new movie of Jodie Foster. Placement & Lure and Bait.

Also

The estimated budget is only referential and some studios cheat the expenses (it moves the expenses to another company/project but the expense still exists).

  • The holy grail of the movie industry is to create a best seller movie with a low budget. Why? It lures more shareholders and investors and pushes the career of the director to the sky, and it ensures a second part of the movie. This movie is not the case even when it generated 5 times the initial budget.
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  • Do you have any sources about the marketing budget of this specific movie? – Charles Duffy May 16 at 17:38
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    The marketing budget is usually separate from the production budget because marketing is done by the distributer. – Matt May 16 at 22:31
  • But it may still be charged to the movie, because, Hollywood financing. Do you mean all 8 HP movies together? – Harper - Reinstate Monica May 16 at 23:00
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Panic room came out in 2002, here are a few other 2002 movies ordered by their budgets.

  • Die Another Day - $142 million
  • Spider Man - $139 million
  • Minority Report $102 million
  • Harry Potter and the Chamber of Secrets - $100 million
  • Gangs of New York - $100 million
  • Lord of the Rings: The Two Towers - $94 million
  • Red Dragon - $78 million
  • Signs - $72 million
  • Murder by Numbers - $50 million
  • The Ring - $48 million
  • Solaris - $47 million
  • High Crimes - $42 million
  • 8 Mile - $41 million
  • Enough - $38 million
  • John Q - $36 Million
  • Queen of the Damned -$35 million

Now not all of those are going to be comparable, some are a lot heavier on the special effects, others have bigger casts full of famous (at the time) names, but $48 million is in keeping with the costs of the films in the same or similar genres from that year - it's not excessive.

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    Hi Andrew, what is your point with this list? The OP asks after the reasons for the costs, not how they relate to other movies from that same year. – Joachim May 15 at 8:59
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    @Joachim OP makes a point to talk about the age of the film, that it came out "nearly 2 decades ago" and that the costs surprises them in part because of that age - comparing the cost of the film to its contemporaries was a part of the analysis that was overlooked by all other answers and very directly addresses one of the points in OP's asking. – Andrew May 15 at 13:21
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    Ah! Sorry, I don't know how I missed that. – BruceWayne May 15 at 19:55
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    WP Die Another Day Synopsis: "MI6 agent James Bond infiltrates a North Korean military base ... a hovercraft chase ensues" and that's just some of the first paragraph. OP was clearly wondering why some people standing around in a room talking cost one third as much as a move with an entire military base (hundreds of extras, military equipment, firefight, vehicles getting blown up, etc.) – Acccumulation May 16 at 2:06
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    @Acccumulation That's pretty much what Bruce said before I pointed out my end paragraph. the point of mentioning the extreme high budget for that year was to show how low Panic Room cost for films of that year, then I mention films that are pretty directly comparable like 8 Mile and Murder by Numbers films with similarly low special effects needs and a similar size cast as far as big names goes - within the same 40 to 50 million budget. – Andrew May 16 at 16:59
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Pre Production can really inflate a movies costs if it takes a long time to finally start filming. Case in point, Jurassic Park III had already spent 18 million before they even started filming a single scene. This would end up adding in a fifth of the budget.

Writing and rewriting can especially be expensive. Good writers get paid regardless if you use a single line of their script or not. Some films go through a dozen scripts before they finally settle on one, or even just start filming as it is still being written by a whole knew person. Script doctors also demand a premium to come in and save scripts on the fly.

According to Forbes, Michael Arndt and Simon Kinberg have reportedly made as much as $400,000 a week doing rewrites.

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