Some clarity about Box Office numbers

[Snicket]

I started this thread to help clarify some common misconceptions about box office returns and studio profits. It should help some come the summer season when the box office becomes so important (for some reason).

So often times I see people here post that a film that cost $20 million opened at $20 million and I see people say things like "Eramagerd! It made a profit in a few days!"

False.

Normally to calculate a true budget I use a 2.5x multiplier, sometimes this number can be 2x or as high as 3x so I split the difference. Also I did not make up this number it comes from studio people and theatre owners. The reason for this is that the final budget number the studio gives (if it is even accurate, I doubt it is most of the time) does not take into account other expenses like advertising-a huge expense, distribution, a huge expense, want to have a world premier in 10 places all over the world? Thats expensive, want A list stars? Thats expensive, Did your production take 10 years in development hell? Thats expensive. Those are only a few of the costs that the "studio number" does not (usually) include. So for a $20 million to make money it needs $50 million to just BREAK EVEN.

One thing that happens is that the theatre chain gets a cut of the profits (something like 20% opening weekend) honestly I'm not sure how this percentage is reported, I don't know if it is included in box office reports or left off altogether. If anyone out there knows, please let me know. If it is included that $20 million a film earns opening weekend is not really $20 million.

International numbers are equally misleading, because studios have to cut so many deals (or even pass distribution off completely to another studio) if it is reported a film makes $50 opening weekend overseas, you can bet the studio is not getting all that.

But what about Blu-ray/DVD sales/Toys?

Warner Home Video is a different beast than Warner Brothers Pictures, so their bottom line is going to be different. The studio does not get all that blu-ray money. Keep in mind just like film it's expensive to produce and distribute media.


The cold hard truth: We may never know how much money a film makes.
Studios are super shady whenever they can be. Frankly, the fact many of them get away with this and are publicly traded companies is baffling. As the Peter Jackson/New Line lawsuit showed us studios like to camouflage the numbers between profit/revenue. They will hide the numbers whenever and wherever they can. Imagine the spreadsheet on the returns from Transformers 3, between the box office, home video, digital distribution, cable licensing, toys, lunch boxes etc. It has to be the worlds largest spreadsheet. You will never find out this information, I tend to doubt even the studio knows all the nickels and dimes.

One last thing, as I feel the box office idolization is getting to be way more important than it should be:

"One of the worst things is the adoration of the box office gross." - Michael Barker (Co-president/co-founder of Sony Pictures Classics.)