Monthly Archives: September 2018

How to Determine if a Film Made Money

The_Lord_of_the_Rings_Characters

It has to be done by rule of thumb, as the studios do not release full lists of expenses and profits, nor will they.  They try to get employees to sign on for a percentage of the profits, and they always say the film lost money.  Reportedly The Return of the King only broke even despite being the second highest grossing film of all time.  Despite this they made sequels.

It is a common misconception that all a film has to do is make back its budget, but that is false.  There are hidden fees that are not in the budget like re-shots and most importantly advertising.  The general rule of thumb is that a film has an advertising budget of half the filming budget.  This leads to the doomsayers constantly saying all films are losing money, but they are wrong.

Some people use the highest estimated costs to say every film is losing money, but if that were true high budget films would not be made.  They are ignoring hidden profits such as merchandise, music sales, streaming services, home media, video game adaptations, book adaptations, and tv deals.  Between all this the general rule of thumb is a film has to make twice its budget worldwide to be profitable, but with the rise of international markets (more on that later) and increasing costs of re-shots it is probably 2.5 times the budget now and it can change based on where it is successful.

The theaters take cuts of the film’s box office which differ based on time and the nation.  The general rule of thumb is a movie keeps half what it makes at the domestic box office (US and Canada) a fourth from China and forty percent in the rest of the world.

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Skyscraper is a failure despite making just over $300,000,000 on a $125,000,000 budget.  However by the rules of thumb it only keeps 24.6 million from China where it made 98 million.  It keeps 54.2 million from the rest of the international market leaving its small 68 million US dollars where it keeps 32 million.  From theaters Skyscraper kept around 111 million dollars.  That leaves it in the red by 14 million plus its budget of probably around 70 million.  It still make money, but only after around ten years.

Film Title: Jurassic World: Fallen Kingdom

In contrast Universal had a huge hit in Jurassic World: Fallen Kingdom.  Huge hits help pay for some bombs.  It made over 260 million in China and keeps around 65.3 million.  In the rest of the world it keeps 250.35 million.  As a 170 million budget that is now paid of by 145 million, which should cover the advertising costs easily.  From there on it keeps an additional 208 million from the domestic market.  This is profitable right away and will help Universal pay for future films and deal with bombs until the profits come in.

To make money a film needs to keep the budget under control, keep hidden costs like re-shots under control, and not just appeal to the Chinese market.

 

 

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