The most profitable films ever
PLUS: The Pope Coat, Apple Mixed Reality.
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Today, we’re talking about the most profitable Hollywood films…and:
AI’s most viral image (the Pope Coat)
Apple’s mixed reality headset
And them wild memes (including Jonah Hill)
James Cameron keeps beasting it.
Avatar 2: The Way of Water has grossed $2.3B at the box office. Adjusted for inflation, Cameron now has 3 of the top 15 films of all time (Avatar, Titanic). Cameron said Avatar 2 had to crack $2B just to break even, so that happened even though no one I’ve ever met can name a single Avatar character (there’s a non-zero chance that we are all hallucinating the existence of this content).
Either way, Avatar 2’s financial success got me thinking: “What are the most profitable films of all time?"
An article from The Hollywood Reporter in 2020 crunched the numbers. The first step is to define “what is meant by profitable?”. Is it the film with the highest return on investment? If that is the criteria, then two low-budget horror films take the cake (one advantage of horror films is that they translate well in foreign markets…unlike comedies, which have many more local nuances):
The Blair Witch Project made a theatrical profit of $240m on a budget of $500k (a 480x return on budget)
Paranormal Activity made a theatrical profit of $193m on a budget of $215k (791x)
It should be noted that the budget figures do not include marketing spend. As a rule-of-thumb, a Hollywood film typically spends as much on marketing as it does on production. However, in the case of these super-low budget horror films — Paranormal Activity’s first cut only cost $15,000 — the marketing spend is significantly higher than the budget ($6m-$8m for Blair Witch and $18m for Paranormal Activity).
Okay, how about films with the most absolute dollars in profits? Unsurprisingly, these are big-budget blockbusters. Based on this criteria, the films with the highest theatrical profits are Avatar ($1.2B), Titanic ($1.4B), Star Wars ($1.3B) and Gone With The Wind ($2B).
A few things to note. Titanic was #1 at the box office for a record 15 straight weeks. Theatre chains usually take a larger share of the box office during the early stages of a film's release, and then the studio takes a greater share the longer the film remains in theatres. Meanwhile, Gone With The Wind had such a huge return for two main reasons.
Multiple sources familiar with the matter tell me there was literally nothing else to do in 1939
“Prints and advertising [P&A] costs in the 1930s were a fraction of what they are today…there was no need to buy ultra-expensive TV commercials, for instance, and far fewer prints were struck”
Finally, all of these numbers only cover studio profits from theatre ticket sales. If we expand the aperture to include other revenue lines (such as home video, DVD, toys, IP), then we can double the haul for Avatar and Titanic. And then give the top prize to Star Wars, which has pulled in an absurd $40B+ on all of its IP.
AI’s most viral image
At this point, you have probably seen the AI-generated image of Pope Francis wearing the drippiest winter jacket humanly possible. So many people — including myself — thought it was real that writer Ryan Broderick aptly described the image as the “first mass-level AI misinformation case”.
This image, Drippy Pope (aka Pope Coat aka Coat Pope) is from the latest version of text-to-image tool MidJourney — an organization that employs less than 10 people — which is on its 5th iteration after launching last March. MidJourney V5 was released on March 16th and the visuals are incredibly realistic (the Pope looking extra swaggy has become one of the top outputs on the r/MidJourney subreddit).
Why did Pope Coat fool so many people? While AI images have significantly improved, there is still a certain identifiable aesthetic (for me, most AI images are too polished, like how you can tell a Kardashian Instagram post is very photoshopped).
But in the case of the Pope, he already wears fairly drippy swag and we mostly see him in polished stage-managed situations. Also, it wouldn’t be the first time a luxury brand has collaborated with the Pope (example: in 2018, Lamborghini made a custom car for the Pope that His Holiness later blessed and sold at a charity auction for $1.4m). So, Pope Coat was certainly very believable at first glance.
Another recent MidJourney example that blew my mind was the visual creation of an alternate history called “The 2001 Great Cascadia 9.1 Earthquake & Tsunami - Pacific Coast of US/Canada” (for the uninitiated, the Pacific Northwest — including Oregon, Washington State and British Columbia — is situated on one of the world’s major fault lines; a massive earthquake occurred in 1700 and residents up here are all waiting for the next big one).
Anyways, here are images of this fictitious disaster including “President George W. Bush meeting with the Mayor of Tacoma, WA” and “Canadian Prime Minister Jean Chrétien visiting the collapsed remains of the British Columbia Parliament Building in Victoria, BC”.
I initially saw these photos in a Twitter thread posted by Justine Moore (the link has an interesting discussion on the implications of AI art for misinformation). We’re probably not too far away from “indistinguishable-from-reality” AI images and videos. To prepare for this world, our default stance with famous people or disasters should be “very cautious before sharing” (doubly true for those unhinged family email threads with your parents, aunts and uncles). Honestly, increased online skepticism is probably a good thing.
Richard Hanania has a good take on how AI deepfakes will impact society. First, legacy media institutions will accrue more power as people seek trusted sources (even if places like AP, Reuters or the NYT have been fooled by fakes in the past). Second, there is a sliver of society — mostly right-leaning — which already believe in the wildest conspiracies and AI fakes will only make it worse.
More broadly, we should look at how fakes have played out with text:
A good analogy for thinking about the likely impact of deepfakes comes from how things currently work with text. Imagine that tomorrow on this Substack I release an interview with Barack Obama, in which he says “You know, Richard, one thing a lot of folks don’t realize is that my administration was based on a synthesis of Bolshevik and New Left principles, but you really need to kill a lot of rednecks to make it work, and unfortunately we couldn’t manage to pull that off.” What would your reaction be? I think you would assume I was writing a parody, or I was just making things up to embarrass Obama. Maybe I’m doing it to get him to denounce me, which would increase my fame and influence.
Now imagine the same thing appearing in The New York Times. Even if you distrust the paper, you generally don’t believe they invent quotes out of thin air. I don’t either, but the NYT has more reputational capital to maintain. If the Obama quote came from MAGAMom_1776 on Twitter, you would dismiss it completely, as would everyone else.
The point of all this is that we’re already in the “deepfake” world of text. People decide what to trust exclusively based on the credibility of the source.
Back to MidJourney: for those that have never tried the tool, it takes only a few minutes to get an image after you type an idea into the dialog box (the interface is through the chat app Discord). The guy that did Pope Coat — Pablo Xavier — is a construction worker from Chicago who was tripping on mushrooms when inspiration hit. He told BuzzFeed:
“I try to do funny stuff or trippy art — psychedelic stuff. It just dawned on me: I should do the Pope. Then it was just coming like water: ‘The Pope in Balenciaga puffy coat, Moncler, walking the streets of Rome, Paris,’ stuff like that.”
MidJourney founder David Holz told the Washington Post that setting moderation is a big issue: “There’s an argument to go full Disney or go full Wild West, and everything in the middle is kind of painful. We’re kind of in the middle right now, and I don’t know how to feel about that.” On Wednesday, MidJourney actually shut off its free trial due to “extraordinary abuse” (including fake images of Donald Trump being arrested). To make images like Drippy Pope, users have to pay at least $10 a month.
Links and memes
Apple’s Mixed Reality headset was aiming for a June debut. According to Bloomberg’s Mark Gurman, Apple believes it can sell 1m units at $3,000 each in its first year. While revenue of $3B sounds like a lot, just remember that Apple had total sales of $394B last year. And unlike previous Apple launches — such as iPhone (phones), AirPods (earphones), and Watch (watches) — the Mixed Reality category is a niche consumer category.
Apple insiders think the Watch’s trajectory is a best-case scenario for the company’s headset. Launched in 2015, the Watch sold 10m units its first year but didn’t have a clear use case. Apple has since positioned the Watch for:
a way to offload iPhone notifications and communications (especially with the models that have LTE connectivity)
health and fitness (Apple has sold >100m units with 10% of iPhone owners also owning a Watch)
The Mixed Reality comparison means it will likely take a few years for the headset to find its real use-case — if there actually is a compelling one for the masses — before taking off. The latest rumor is that Apple will push its debut to Q3 as June might not be enough time for an “iPhone-worthy” launch. In any case, designer Antonio De Rosa has some slick concept mock-ups on his design website:
And some other baller links:
A behind-the-scenes feature for the film The Greatest Showman. Before green-lighting the project, Fox wanted to see the cast in action. It took 8 months for Hugh Jackman and Co. to organize everyone into one room and the group knocked it out of the park including a demo for the song “From Now On” (a real banger).
Should we pause the development of AI? Over 1000 people — including Elon Musk, AI pioneer Yoshua Bengio, Apple co-founder Steve Wozniak and Stability AI founder Emad Mostaque — signed an open letter for “all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4”.
Why? Because AI labs are “locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one — not even their creators — can understand, predict or reliably control”. Another signee, Gary Marcus, wrote about the open letter and addressed pushback from critics.
Or even more extreme AI actions? Long-time AI researcher Eliezer Yudkowsky believes that an “unaligned” artificial general intelligence (AGI) which could harm humans is so real that he wrote an editorial for Time, “Pausing AI Developments Isn't Enough. We Need to Shut it All Down”.
What do I think? Well, I am building an AI-powered research app and believe generative AI tools will be a huge productivity booster for society. My unqualified opinion on the larger issue: a pause at GPT-4 to digest the current AI progress and set proper guardrails makes sense. But the genie feels like it is out of the bottle and the odds of co-ordinating all the key players seems low (ultimately, we'll see more governments making unilateral decisions like Italy just did by banning ChatGPT for data privacy violations)
Podcast Recommendation: GastroPod covers the history and science behind our favorite foods. Here is a good episode about umami (aka the 5th taste after sweet, bitter, sour and salty).
RIP Gordon Moore: The legendary co-founder of Intel — who is responsible for coining “Moore’s Law” (the observation that the number of transistors in an integrated circuit doubles about every two years) — has passed away at the age of 94. Fabricated Knowledge has a worthwhile read on how Moore, Intel and Moore’s Law changed the world.
…and here are some fire tweets.
This tweet from Chris is possibly my favorite AI-related joke to date (as mentioned, Italy banned ChatGPT for data privacy reasons…or was there another real reason?):
Last Saturday, Kanye West said on Instagram that he no longer has animus towards Jewish people after watching Jonah Hill in the film 21 Jump Street. Predictably, the internet exploded with jokes. A good one was from the pseudonymous Twitter account pretending to be Christopher Moltisanti from the HBO crime show The Sopranos. The gag is that Chris is an idiot and tells his uncle — Tony Soprano aka “T” — news in the dumbest words possible: