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.)

[remake]

All I know is, Warner Bros is bleeding to death this year.

BEAUTIFUL CREATURES
$60M budget (not counting advertising)
$58M worldwide total

JACK THE GIANT SLAYER
$195M budget (not counting advertising)
$192M worldwide total

BULLET TO THE HEAD
$55M budget (not counting advertising)
$9M domestic total

THE INCREDIBLE BURT WONDERSTONE
$30M budget (not counting advertising)
$22M domestic total

[chris_sc77]

Originally Posted by remake

All I know is, Warner Bros is bleeding to death this year.

BEAUTIFUL CREATURES
$60M budget (not counting advertising)
$58M worldwide total

JACK THE GIANT SLAYER
$195M budget (not counting advertising)
$192M worldwide total

BULLET TO THE HEAD
$55M budget (not counting advertising)
$9M domestic total

THE INCREDIBLE BURT WONDERSTONE
$30M budget (not counting advertising)
$22M domestic total

Dont forget Gangster Squad!
And Gatsby is most likely gonna bomb.

Hmmmmm lets move this from awards season and Sandwich a 2.5 hour drama right between Iron Man 3 and Star Trek 2. The decision makers at WB are idiots!

[spanky87]

I also don't understand what the obsession is. And it's ridiculous when people desperately want a movie to fail, and are at their computers early Saturday morning waiting with anticipation to see the numbers so they can post "BOMB' somewhere on the net.

Also I think the term "Box Office Bomb" has lost it's meaning these days. Seems people think every movie that doesn't earn 100+ million domestic is considered a bomb, regardless of the budget.

[fitprod]

Originally Posted by chris_sc77

And Gatsby is most likely gonna bomb.

Hmmmmm lets move this from awards season and Sandwich a 2.5 hour drama right between Iron Man 3 and Star Trek 2. The decision makers at WB are idiots!

I've said it in a different thread somewhere, but the marketers at WB are not idiots. They knew this film was going to bomb, at least in the US, whenever it was released. They just decided to place it between two blockbusters so they'll have a built in excuse.

fitprod

[fitprod]

Originally Posted by spanky87

Also I think the term "Box Office Bomb" has lost it's meaning these days. Seems people think every movie that doesn't earn 100+ million domestic is considered a bomb, regardless of the budget.

As had peoples interpretation of a box-office success. G.I. Joe: Retaliation anyone? While the budget was $45 million less than the first film, that difference was more than made up for with the two marketing campaigns due to the late theatrical delay.

The only way Paramount comes close to breaking even on the film is the international numbers, and that's assuming they aren't splitting the international numbers with anyone. (I know UIP is a joint distribution deal with Universal, so I don't know if that gets split or not...)

fitprod

[Kryptonic]

Originally Posted by remake

All I know is, Warner Bros is bleeding to death this year.

BEAUTIFUL CREATURES
$60M budget (not counting advertising)
$58M worldwide total

JACK THE GIANT SLAYER
$195M budget (not counting advertising)
$192M worldwide total

BULLET TO THE HEAD
$55M budget (not counting advertising)
$9M domestic total

THE INCREDIBLE BURT WONDERSTONE
$30M budget (not counting advertising)
$22M domestic total

Superman will save them!

[EricJ]

Originally Posted by Snicket

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.

Peter Jackson? Try Art Buchwald--
Who won a lawsuit against Paramount for a share of the profits over source material on "Coming to America", only to be told that despite being the third highest-grossing movie of the year and making $128M domestically in 1988 dollars on a $39M budget, not counting cable and video, the movie "had yet to turn a profit"...Or so Paramount told anyone who wanted a piece of it the easy way.

Actors and agents are now too smart to ask for "a percentage of the profits", knowing that they'll never see profits in their lifetimes: They ask for a salary incentive upfront, and option on "points" for negotiation, marketing and merchandise sales:
http://en.wikipedia.org/wiki/Lew_Wasserman

Wasserman expanded on practices established by earlier agents. For example, Feldman and Selznick realized in the late 1930s that an actor could pay much less tax by turning himself into a corporation. The corporation, which would employ the actor, would own part of a motion picture the actor appeared in, and all monies would accrue to the corporation, which was taxed at a much lower rate than was personal income.
Wasserman used this tax avoidance scheme with actor James Stewart, beginning with the Anthony Mann western Winchester '73 (1950). This marked the first time an onscreen talent ever received "points in the film" - a business tactic that skyrocketed after Wasserman's negotiation and Stewart's ensuing success.[citation needed]

The only people who say "It had a $10M budget and made $10,000,001, that's a profit!" are usually persecuted fans of a disappointing picture, trying to tell a mean world that their film "wasn't" a flop after all. (Like, say, Gatsby fans a month from now. )
That economic theory may work for selling apples, but not in places that learn how to keep their money away from employees.

[fitprod]

Originally Posted by Kryptonic

Superman will save them!

Hmmm... I hope so for their sake. But Superman has never really carried internationally, which will be the key.

fitprod

[EricJ]

Originally Posted by Kryptonic

Superman will save them!

(Kevin Spacey: ) Say that again:

Originally Posted by Kryptonic

Superman will--

...WROOOONG!

[legendarymatt92]

Originally Posted by spanky87

I also don't understand what the obsession is. And it's ridiculous when people desperately want a movie to fail, and are at their computers early Saturday morning waiting with anticipation to see the numbers so they can post "BOMB' somewhere on the net.

Also I think the term "Box Office Bomb" has lost it's meaning these days. Seems people think every movie that doesn't earn 100+ million domestic is considered a bomb, regardless of the budget.

+1. It's ridiculous that we live in an age where people actively look for films to fail so they can be proven "right"

[legendarymatt92]

Originally Posted by EricJ

(Kevin Spacey: ) Say that again:



...WROOOONG!

Why do you think it won't?

[EricJ]

Originally Posted by spanky87

I also don't understand what the obsession is. And it's ridiculous when people desperately want a movie to fail, and are at their computers early Saturday morning waiting with anticipation to see the numbers so they can post "BOMB' somewhere on the net.

Yeah, you're supposed to do it on Friday night with RottenTomatoes quotes...Who knows from numbers anymore?

Originally Posted by legendarymatt92

Why do you think it won't?

Well, fitprod already mentioned the bit about US superheroes not having the same pop resonance overseas, but Supe is "American" enough to get by in Europe or Japan as a cultural icon.

You'll note, however, the carefully placed Kevin Spacey joke to hint at the perils of Famous Directors trying to be too reverential and not sully the holy name of Richard Donner.
We had Bryan Singer trying to be Too Reverential (and dull and downbeat), and now we've got Zack Snyder (hoping to make us forget Bryan Singer) trying to be Epic and Reverential...Yeah, so were Watchmen and Sucker Punch, and "normal" non-geek-cult moviegoers didn't go see those either as hoped, your point please?

(And THEN you can stick on all the bits about Warner's promotion budget, have fun.)

[Blu-Benny]

Originally Posted by Kryptonic

Superman will save them!

really not seeing that happening.

[KingRad]

I feel like I'm the only avid movie viewer that does not pay attention to box office results. Is that like watching basketball without knowing the score? Haha.

[Snicket]

Originally Posted by Hoth

I feel like I'm the only avid movie viewer that does not pay attention to box office results. Is that like watching basketball without knowing the score? Haha.

Absolutely not! You are doing it right!

The attention box office numbers get is worthless because studios are so ambiguous with their reporting that the numbers we see are probably not representative of anything substantial anyways.

[remake]

I think we should pay some attention to the box office. What if someone wants to see a movie two weeks after it comes out (to avoid crowds, busy work schedule, etc.) but it bombs big time and it'll be out of theatres by the time they get to.

[legendarymatt92]

Originally Posted by remake

I think we should pay some attention to the box office. What if someone wants to see a movie two weeks after it comes out (to avoid crowds, busy work schedule, etc.) but it bombs big time and it'll be out of theatres by the time they get to.

I agree; people shouldn't wait for the opening box office figures before trying to have their moment in the limelight and declaring the film a "bomb", but it should be a tool that we use to measure how much of a success a film seems to be/not to be when it's appropriate.

An example would be the upcoming Man of Steel: with Warner Bros. already mentioning that the Justice League movie rests on how well Supes does, people who are interested in a series might want to just keep an eye on how much money it's making for an idea of how likely the continuation is.

[Jennifer Lawrence Fan]

Originally Posted by spanky87

I also don't understand what the obsession is. And it's ridiculous when people desperately want a movie to fail, and are at their computers early Saturday morning waiting with anticipation to see the numbers so they can post "BOMB' somewhere on the net.

Also I think the term "Box Office Bomb" has lost it's meaning these days. Seems people think every movie that doesn't earn 100+ million domestic is considered a bomb, regardless of the budget.

+1 here. Never understood why someone would say that. Just kinda makes them look like an obnoxious douche. It;s like don't they have nothing else better to do?

Pretty much, everyone likes to think their a box office Analyst and say something bombed or failed. Even if say a film cost 2 million to make and grosses 50 million domestically. They still say that it was a bust.

[octagon]

Originally Posted by Hoth

Is that like watching basketball without knowing the score? Haha.

It's more like watching basketball without knowing exact game-to-game attendance numbers for each and every team.