Category Archives: Box Office

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.

box office 2

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.

 

 

Advertisements

The Myth of Disney Competing with Itself

Scott Mendelson of Forbes recently wrote that The biggest competition Disney will face is itself.  His cited example is Christopher Robin competing with Ant-Man 2.  His post is terrible. The Disney films have been spread out and rarely in the top five at the same time.

His cited example of Robin and Ant is completely false. By the time they are both out Ant-Man will have been out for five weeks, and it will be nearly dead. Three weeks in, and it has grossed over 172 million statewide giving it plenty of time to make money, and by the time Robin comes out it should only be grossing a few million that weekend. His statement also completely ignores that Disney has hardly anything at the box office right now besides holdovers. Sony and Universal have the top three spots. Disney does have spots 4 and 5, but they also have nothing this next weekend, and Mission Impossible 6 and Teen Titans go to the Movies should become 1 and 2 this weekend meaning Disney will be stuck at 6 and 7 this weekend. Disney has little competition from themselves at this time and needs something.

He also has been claiming this has been the case all year, yet this is completely false. For the first month and a half this year Disney was solely represented by The Last Jedi, while Jumanji ruled the box office. Black Panther then became their big hit. Not until its 4th weekend did Panther have competition from Disney, and then many films came and went as number 1. When Infinity War came out Black Panther was only doing well due to its great box office legs, and it was 5 at the box office.

Solo is his best claim, but that is faulty. When Solo came out only Deadpool 2 was fresh at the box office. It won two very weak weekends and then fizzled. Incredibles II did come out quickly, but by then Solo had 3 weeks. That is enough time in the Summer months for money. It was dead by the time its Disney competition emerged. Ant-Man 2 had competition from Incredibles II, but that was needed to combat Jurassic Park 5.

Disney has done a good job at scattering their releases this year, and they have hardly competed with each other. Only A Wrinkle in Time suffered from this, and that was due to black Panther‘s great performance as the third highest grossing domestic film ever. Their film distribution schedule is doing great and the other major studios are picking up after they make good money.

Why Solo Failed at the Box Office

Han-Solo-Main

Solo: A Star Wars Story is likely going to be the first Star wars film to lose money at the box office.  It was projected to make plenty of money right away and have great legs. but it has been failing at both.  All Stars Wars movies had opened huge, and the other studios did not put major films to compete with it.  Instead it opened to hugely disappointing numbers.  Many theories have came out about its failure, and most are nonsense.

It did not bomb

This is false.  some defenders have praised it for having the fourth highest opening weekend of the year (it will almost certainly not be in the top 10 when the year ends). Others are saying it is only underperforming as a Star Wars movie.  Even they have to admit it is failing badly by Star Wars standards, but it is failing by more than that.  It went over budget and conservative estimates say it cost $250 million dollars.  By movie economics and hidden expenses it needs to make around $500 million worldwide to make money. Two weekends in and it has made $260 million.  Its legs are getting weaker and it is finally getting competition.  Domestically for a film that expensive it is doing poorly.  a film with a $150 million budget would be good with it, but not a film this expensive.  Its worldwide numbers have been abysmal.  The same $150 million dollar film would be unhappy with its worldwide numbers.

2

Too much competition

This is also a common myth. some are saying it is Avengers: Infinity war and Deadpool 2 that killed it.  These claims are ignoring the basics of the summer season with movies.  Normally a major film comes out the weekend before (like Deadpool 2), and another major film opens the next week. No major films opened this weekend, as studios are still shying away from putting big films in competition with Star Wars.  These past two weekends Avengers made less than $30 million being on its 5th and 6th weekend.  The Newer Deadpool film made over $60 million, but that is not that much for top competition in the Summer over half a month.  At this time when the top film makes less than $30 million over a weekend it is a very light three day period.

Boycotters

The last Star Wars film alienated many fans.  Disney called them insignificant, but they now seem very significant.  This is definitely part of its failure, but I doubt they are eighty percent of the fanbase.  They may have been the group most likely to watch Solo.  Most of the boycotters love Han and the original trilogy, and they like their films more lighthearted than the fans of The Last Jedi.

Star Wars Fatigue

This is probably part of the reason.  See how bad it is affecting Marvel.  Black Panther and Avengers 3 are in theaters at the same time way closer together, and they are… Actually they are two of the highest grossing films ever now.

What I think the Reason is

Selling a film depends on having a base, and the base for Solo is Han Solo fans.  They love Han, but they also love a certain thing about him that the movie has none of, Harrison Ford.  This is the first time a live-action character has been recast with lines in Star Wars, and it is the Star Wars actor who had the best career.  the fans did not want to see someone else be Han, and they were mad at Disney for killing him.

 

Will Lionsgate Join the Big Six?

 

Image result for lionsgate

As of right now there are six major studios, Disney, Fox, Paramount/ Viacom, Sony/Columbia, Universal/Comcast, and Warner Brothers/ Time Warner.   These companies are all at least seventy years old, yet a new studio that was only formed in 1997 making it younger than twenty has emerged as the biggest minor studio.  Lionsgate has been leaving the smaller studios like Weinstein and MGM looking way smaller, partly due to successful franchises such as Now You See Me, The Hunger Games, and, Twilight.  If the last 5 years (2012-2016)’s box office by yearly share were averaged these are the results.

Studio Box Office Percentage average. (domestic)
Disney 17.96
Warner Bros 15.22
Universal 13.66
Fox 11.82
Sony 10.6
Paramount 7.98
Lionsgate 7.78

Lionsgate is just behind Paramount, and to add to Lionsgate’s claim to the majors three months into 2017, and they have made more than twice that of Paramount and almost three times what Sony has made.  On the surface they have beaten Paramount and Fox a few years and should be seen as major studios, but a lower chart will reveal why they are not a major studio.  This simply brings the averages back one more year to 2011.

 

Studio Box Office Percentage Average (domestic)
Disney 17
WB 15.66
Universal 13.08
Fox 11.45
Sony 10.91
Paramount 9.85
Lionsgate 6.78

Paramount won the box office in 2011 with 19.3 percent.  Lionsgate came in tenth with only 1.8 percent.  By adding one year the top five companies do not go up or down by an entire percent, but Lionsgate goes down by one and Paramount nearly rises by 2.  Another major thing is each of the big 6 have won the crown once in the last 6 years.  Lionsgate in its short life has never been higher than five.  Another problem is besides Now You See Me its proven franchises are finished, and the business is currently franchise based.  This is why they invested so much in Power Ranger’s marketing.  Also it has only shown consistency for 5 years, while these other companies have done it for decades.  If Lionsgate can show their competitive ability like it has for another ten years then it will be the newest major studio.  Until then they will have to settle with being called the unquestioned champion of the minors.