Vose SoftwareModelChoice decision tree · Film and media
Movie Studio Greenlight Decision
Greenlight a big-budget original, a mid-budget franchise film, a low-budget indie, or nothing?
From the model’s decision tree
Best first decision: Mid-Budget Franchise
The expected value of each first option when every later decision is also made well (the tree rolled back).
| First decision | Expected value | |
|---|---|---|
| Big Budget Original | $11,100,000 | |
| Mid-Budget Franchise | $74,500,000 | ✔ best |
| Low-Budget Indie | $10,650,000 | |
| Don't Greenlight | $0 |
| Measure | Value |
|---|---|
| Expected value of the best strategy | $74,500,000 |
| Chance of a loss on the best strategy | 30.0% |
| Best outcome on the best strategy | $185,000,000 |
| Worst outcome on the best strategy | −$45,000,000 |
S-curve (cumulative probability) of Mid-Budget Franchise from the saved simulation.
The decision
A major film studio has three projects competing for a production slot. Each project has different budget requirements, risk profiles, and revenue potential. The studio can only greenlight one project this quarter.
Objective
Maximize expected profit. This model illustrates the entertainment industry's power-law economics and the value of mid-production decision points (reshoots).
The options
- Option 1: Big Budget Original ($120M)
An ambitious original IP with A-list talent. Highest potential but also highest risk of budget overruns. If production hits major problems, the studio must decide whether to invest in expensive reshoots or release as-is.
- Option 2: Mid-Budget Franchise ($65M)
A sequel in an established franchise. Built-in audience reduces downside risk, but franchise fatigue is a concern.
- Option 3: Low-Budget Indie ($15M)
A character-driven drama from an acclaimed director. Lowest risk, small chance of a breakout hit (like Parasite or Everything Everywhere).
The decision tree
The tree has 2 decisions, 7 chance events and 22 outcomes. The best path is open: at every decision the best choice is marked, and the expected value beside each branch counts every cash flow from the start. Open any other branch to see what follows it.
DecisionChance event+$ cash flow on the branch
Big Budget Original −$120,000,000expected $11,100,000
Chance: Production Outcome40% On Budgetexpected $91,500,000
Chance: Critical Reception- 20% Acclaimed (90%+ RT) +$450,000,000payoff $330,000,000
- 40% Well Received +$220,000,000payoff $100,000,000
- 30% Mixed Reviews +$100,000,000payoff −$20,000,000
- 10% Panned +$35,000,000payoff −$85,000,000
40% Over Budget (+20%) −$24,000,000expected −$30,500,000
Chance: Critical Reception- 35% Well Received +$200,000,000payoff $56,000,000
- 40% Mixed Reviews +$90,000,000payoff −$54,000,000
- 25% Panned +$30,000,000payoff −$114,000,000
20% Major Problems (+50%)expected −$66,500,000
Decision: Reshoot DecisionExpensive Reshoots −$60,000,000expected −$71,000,000
Chance: Post-Reshoot Reception- 40% Reshoots Saved It +$180,000,000payoff $0
- 40% Still Mediocre +$80,000,000payoff −$100,000,000
- 20% Still Bad +$25,000,000payoff −$155,000,000
Release As-Isexpected −$66,500,000 ✔ best
Chance: As-Is Reception- 20% Surprisingly OK +$120,000,000payoff $0
- 50% Poor Reception +$50,000,000payoff −$70,000,000
- 30% Disaster +$15,000,000payoff −$105,000,000
Mid-Budget Franchise −$65,000,000expected $74,500,000 ✔ best
Chance: Franchise Reception- 25% Fan Favorite +$250,000,000payoff $185,000,000
- 45% Solid Entry +$140,000,000payoff $75,000,000
- 20% Franchise Fatigue +$60,000,000payoff −$5,000,000
- 10% Critical Disaster +$20,000,000payoff −$45,000,000
Low-Budget Indie −$15,000,000expected $10,650,000
Chance: Indie Film Reception- 10% Breakout Hit +$120,000,000payoff $105,000,000
- 20% Festival Darling +$35,000,000payoff $20,000,000
- 45% Limited Release +$12,000,000payoff −$3,000,000
- 25% Straight to Streaming +$5,000,000payoff −$10,000,000
- Don't Greenlightpayoff $0
Change the numbers. Open the workbook with ModelChoice, change a probability or a cost in the tree, and the best decision updates at once.
Key assumptions
| Assumption | Value | Notes |
|---|---|---|
| Big Budget Production | $120,000,000 | A-list talent, VFX-heavy |
| Franchise Production | $65,000,000 | Established IP, predictable costs |
| Indie Production | $15,000,000 | Character-driven, practical effects |
| Reshoot Cost | $60,000,000 | 50% of original budget |
| Blockbuster Revenue | $450,000,000 | Global box office + streaming + merch |
| Indie Breakout Revenue | $120,000,000 | 10% probability, 8x return |
| Budget Overrun Risk | 60% | 40% over by 20%, 20% major problems |
| Reshoot Success Rate | 40% | Probability reshoots save the film |
The figures are illustrative: the companies and numbers are invented for teaching.
Try it in ModelChoice
- Strategy Table. Compare all film strategies including reshoot decisions
- Sensitivity Analysis. How does critic reception probability affect profitability?
- Risk Profile. Compare the wide variance of original vs franchise vs indie
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Further reading
Download the workbook and open it with ModelChoice. The free trial opens every example.
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An illustrative example: the figures are invented for teaching. Last updated 9 October 2026.