I think you are really missing the point here.
"Because there are precious few concepts that can be filmed on a shoe string budget and then go on to attract a large audience."
If the objective is to make movies that ALWAYS target the broadest audiences then you have to make movies with broad appeal, and what you say makes sense. So, the more people that MUST see a movie, the fewer topics/stories you can tell because (despite what marketeers try to sell us) the human race is not homogenious and there are very few things that EVERYONE wants to see.
But new technologies are blowing that concept out of the water. Our kids hang out at sites dedicated to Nascar racing games. Hard core liberals get their news from the Huffington Post. People are recording Mad Men and then watch it in their hotel rooms 3 weeks later using Slingbox (fast forwarding commercials in the process). The trend for people to get their entertainment from more niche-like sources is increasing, not decreasing. And the good news is that research suggests that targeting smaller niches is more successful in turning eyeballs into action, which is what advertisers really want after all.
"Big budget "event films" DO have the best odds of making the biggest returns. You make it sound like they're on a snipe hunt, lol. Go look at the box office top 100. It's 99.9% big budget blockbuster and big budget Disney/Pixar/Dreamworks cartoons."
That statement is flat out false. People voted with their pocket books but the real ROI for these big budget movies can be horrendous. Hollywood (and you) often confuses big revenue for big returns. Spider-man 2 had a worldwide gross of $783,766,341 but cost $200M to make and probably had a marketing budget of $200M-$300M. So maybe the studio will make 2.0-2.5 times its investment with VOD, video rentals, etc. Now compare that with the ROI Paranormal Activity has already generated (assuming Paramount spent a couple million on marketing the return just in theatres is already 5X without ancilary revenues). So a smart business man would think, if I can make 500 smart smaller movies and target them well, I can take lots more risks, but my overall returns will be much higher. Practically every other business in the world understands this. Even venture capitalists don't take their $500M funds and invest them in one company; they make lots of little investments with the hope that even if only a few of those are successful, that their shareholders will benefit greatly.
But part of the problem that few people address is that the major players in Hollywood/TV also control the means of distribution (theatres and broadcast and cable TV). Getting small films into theatres is becoming increasingly impossible because the screens are held hostage to the multi-picture deals signed with the studios (we'll give you Spider-Man 5 only if you also take Jennifer Aniston's next bomb). It is, and always has been collusion and our government looks the other way. But even this is beginning to crack as theatres see their attendance dropping - movies today seem to make more money than yesterday but it's only because theatres continue to raise ticket prices and those days are coming to an end with our "permanently-in-recession" economy. So allowing more screens to show good, independent/small studio starts to be more attractive to theatre chains as well.
And lastly, the film pricing model is broken. Inflated actors salaries, expensive tradecraft, cameras, editing suites, and technology that is rented for practically the cost to buy many times over, even catering costs that can be double the costs of renting limos and driving the entire crew to Fleur De Lis - all cause the cost of a film to become astronomical very quickly. The cottage industry that has grown up around the excesses of film and broadcast TVis about to see a grand-canyon style crack in its business model. The business model for film and television production is broken but all the people who are driving their Bentleys and having business lunches at The Roosevelt are loath to give up that lifestyle. But the writing is on the wall, or more aptly on Facebook and YouTube.
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