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[Jean Grey Will Rise]

Pretty sure the standard is somewhere between 2x and 3x budget (not including advertising) to make a profit.

Citation needed

 

[Bigfoot]

So we can officially declare Squad a box office success right

It's definitely not a bomb or failure like many were predicting. Sure any company always wishes their movie is the next Titanic / Avatar / Avengers but I'm sure WB isn't disappointed with what the movie did either, despite what many here seem to think.

At the end of the day it made money, just not a lot.

 

[ezekial45]

What have they changed? I genuinely don't know what has been done. Of course we all want better quality movies and we'll see what next year brings us. WW trailer looked good, Justice League not so much (and I will never get used to Affleck as Bruce Wayne). So far, though, I don't think execs are sweating too much.

I'm not sure I agree SS should have made a lot more money than it did. As a non comic fan I only knew Harley Quinn (barely, mainly due to the Arkham games) and Joker, everybody else was as known as pre-GoTG Groot to me. I think its performance is within expectations given the amazing marketing job it received. I know a fair amount of people who went to see it because of Will Smith. BvS should have indeed crossed a billion, but I think that movie still made money, not counting home release and merchandise sales.

They brought in Geoff Johns (current head of DC Comics) as the co-chief of DC Films, and many of the producers who were in charge of BvS and SS were side-lined and demoted. He also co-wrote the screenplay for Wonder Woman, which will be the first movie a part of the change-up. Every movie going forward from here on will have a change in approach. The problem they had was that there wasn't a clear vision for what they wanted to do, tonally, which will change going forward.

This all happened in the months between BvS and SS, and the latter was apparently screwed with to make it more approachable. While SS has been pretty successful, I do believe it would have made more if the movie - and this applies to BvS as well - was of a higher quality. Keep in mind that both films had some pretty awful reviews, which lost them business by scaring off people.

http://www.vulture.com/2016/05/geoff-johns-dc-films.html

 

[sirap]

What part?

A good general rule of thumb is to take a movies' budget and times it by two. That's how much it really cost a studio, marketing included.

Then you take the worldwide gross and cut it in half. That's an approximation of how much a studio gets back.

If you do these two things, both BvS and SS end up in the red.

Now again these are very rough tools, but for example if you use them the SS numbers end up being around what was reported as the break-even point.

Captain America: Civil War

Budget: $250 million (according to wikipedia)

So according to your formula...

250 x 2 = 500 million (true cost of the movie)

WW gross = $1.152 billion

^ divided in half = $576 million

Wait, Marvel only made $76 million from Civil War? No wonder Disney cancelled Tron 3.0, they're barely making a profit from superhero movies.

EDIT: Just ran the numbers and Ant-Man lost them a million. Am I doing this right? Math isn't my strong point...

 

[Ninja Scooter]

At the end of the day it made money, just not a lot.

But how do you know?

 

[Roland_Gunner]

What part?

A good general rule of thumb is to take a movies' budget and times it by two. That's how much it really cost a studio, marketing included.

Then you take the worldwide gross and cut it in half. That's an approximation of how much a studio gets back.

I don't know where you got that from but its a terrible, terrible rule of thumb that no one should ever use. Lets look at a real example in Ghostbusters. The rumored budget is $144 million so that times two is $288M. The worldwide gross is $217M (/2 = $108M). Per your rule of thumb it lost roughly $180M but the best expectations are the loss will only be $25 - 50M per Variety, which is a tiny fraction of what this rule would tell you.

http://variety.com/2016/film/news/ghostbusters-loss-sony-50-million-1201834911/

 

[Matt]

Again, [citation needed]. Your post is just a fancier version of tales from your ass.

I mean, here is The Hollywood Reporter story that said SS needed $750-$800 million to break even, which is a bit more than the times two divide by two formula.

 

[kmfdmpig]

What part?

A good general rule of thumb is to take a movies' budget and times it by two. That's how much it really cost a studio, marketing included.

Then you take the worldwide gross and cut it in half. That's an approximation of how much a studio gets back.

If you do these two things, both BvS and SS end up in the red.

Now again these are very rough tools, but for example if you use them the SS numbers end up being around what was reported as the break-even point.

This calculation seems far too pessimistic.

Civil War was only marginally profitable? That seems like a stretch.

Iron Man 1, which launched the MCU into the stratosphere would be slightly ahead of breaking even.

Look at what gets sequels - Olympus has fallen had a budget of $70 million. It made $161 million worldwide. By your math it would be $140 spent and $80.5 lost (and it's not like Olympus has fallen has toys or shirts to sell). It got a sequel (albeit an awful one) which seems to indicate that it was profitable.

Thor 1 cost $150, so $300 if you double it. It made $449, so $225 if you half it. If Thor 1 lost money why make a sequel?

 

[CaviarMeths]

A good general rule of thumb is to take a movies' budget and times it by two. That's how much it really cost a studio, marketing included.

Then you take the worldwide gross and cut it in half. That's an approximation of how much a studio gets back.

This is some ol' bullshit, come on.

 

[Sanjuro]

Bad Moms put in some work.

 

[elrechazado]

It supposedly cost $20m according to BOM. It grossed $100m (domestically).

Read that wrong thanks.

 

[Ahasverus]

I mean, here is The Hollywood Reporter story that said SS needed $750-$800 million to break even, which is a bit more than the times two divide by two formula.

Insider report which has been debunked many, many times, by other reporters with a face like Mark Hughes.

 

[Matt]

I don't know where you got that from but its a terrible, terrible rule of thumb that no one should ever use. Lets look at a real example in Ghostbusters. The rumored budget is $144 million so that times two is $288M. The worldwide gross is $217M (/2 = $108M). Per your rule of thumb it lost roughly $180M but the best expectations are the loss will only be $25 - 50M per Variety, which is a tiny fraction of what this rule would tell you.

http://variety.com/2016/film/news/ghostbusters-loss-sony-50-million-1201834911/

That article actually says the movie lost $75 million in theaters, although with Sony insiders saying it's less than that due to co marketing and branding deals.

It's not a perfect formula, but it's not a awful one

 

[Ahasverus]

That article actually says the movie lost $75 million in theaters, although with Sony insiders saying it's less than that due to co marketing and branding deals.

It's not a perfect formula, but it's not a awful one

By your example, your calculations had an error percentage of 140%. That's a REALLY AWFUL result. You know nothing about how this stuff works, just hold that L.

 

[Matt]

This calculation seems far too pessimistic.

Civil War was only marginally profitable? That seems like a stretch.

Iron Man 1, which launched the MCU into the stratosphere would be slightly ahead of breaking even.

Look at what gets sequels - Olympus has fallen had a budget of $70 million. It made $161 million worldwide. By your math it would be $140 spent and $80.5 lost (and it's not like Olympus has fallen has toys or shirts to sell). It got a sequel (albeit an awful one) which seems to indicate that it was profitable.

Thor 1 cost $150, so $300 if you double it. It made $449, so $225 if you half it. If Thor 1 lost money why make a sequel?

If a movie makes any money in theaters, that's pretty good, as then the ancillary income streams are all profit (not really but you get the idea).

What part exactly do people disagree with? That studios get back half of the worldwide gross, or they amount they spend in marketing and other costs?

 

[Messofanego]

Ben Hur, Gone Tomorrow

 

[statham]

Mechanic: Resurrection

 

[CassidyIzABeast]

If SS cost WB 800M the board should fire everyone.

 

[CaviarMeths]

Ben Hur, Gone Tomorrow

Damn that's good.

 

[GabeTheGrouch76]

So with SS now hitting $600M, does this mean it'll likely be more profitable than BvS? If so, good for that film and WB, I guess. Also very happy about Kubo getting a box-office bump up to third.

And lol at Bomba-Hur freefalling to the bottom of the Top 10. This movie will come and go like a fart in the wind.

 

[Matt]

By your example it had an error percentage of 140%. That's a REALLY AWFUL result. You know nothing about how this stuff works, just hold that L.

Dude, calm down. I just talking about a general rule of thumb, a lot of things like co marketing and co finance and if a movie is released in China and if the movie did in proportion way more domestically and a ton of other things can affect it. If you have a better idea, post it.

 

[Schlorgan]

I'm gonna go ahead and throw this out there: the amount of money needed for profitability is different from movie to movie and it is impossible for us, with the information we have available to us, to declare whether or not a specific movie was profitable.

 

[sirap]

If a movie makes any money in theaters, that's pretty good, as then the ancillary income streams are all profit (not really but you get the idea).

What part exactly do people disagree with? That studios get back half of the worldwide gross, or they amount they spend in marketing and other costs?

Captain America: The First Avenger

Budget: $140 million
WW: $370.6 million


Using your formula, Captain America lost them roughly $100 million. And yet they still went ahead and made a sequel.

I think it's broken.

 

[BronsonLee]

I'm gonna go ahead and throw this out there: the amount of money needed for profitability is different from movie to movie and it is impossible for us, with the information we have available to us, to declare whether or not a movie was profitable.

NO STOP BEING LOGICAL *stomps on box of tomatoes*

 

[Wafflecakes]

Suicide Squad already passed 3x, incluiding advertisement budget.

Then it is likely making profit.

Whether than profit meets studio expectations is another question.

Citation needed

No. Get off your own ass and do your own research.

Its not that hard to find a flop film (say.... Rise of the Guardians) and use simple math determine where the point of profitability is by taking into account budget, gross, and the write down taken by the studio on the film.

 

[kmfdmpig]

If a movie makes any money in theaters, that's pretty good, as then the ancillary income streams are all profit (not really but you get the idea).

What part exactly do people disagree with? That studios get back half of the worldwide gross, or they amount they spend in marketing and other costs?

The half of the gross thing is an oversimplification. Studios make the highest % in the US and the lowest in China, so a movie that does well in the US and poorly in China (or doesn't open at all in China) will be more profitable at $700 m than one that does strong business overseas and in China.

The percentage also changes over time. Studios make more the first week than later weeks, so a front loaded picture with poor legs would earn the studio a higher percentage than a slow burn would.

I also think it's too simplistic to say that marketing is equal to the cost of production. There are then tax breaks, military propaganda benefits (which I suspect both BvS and Suicide Squad took advantage of, etc... all of which factor into the equation.

 

[Cuburt]

Insider report which has been debunked many, many times, by other reporters with a face like Mark Hughes.

[Citation needed]

 

[Ahasverus]

Dude, calm down. I just talking about a general rule of thumb, a lot of things like co marketing and co finance and if a movie is released in China and if the movie did in proportion way more domestically and a ton of other things can affect it. If you have a better idea, post it.

I don't but I won't go around like I do. Your stand just goes against all logic, like, companies wouldn't be making these movies, at all. Or any movie, by your formula, just put that money into some index funds and they'll get better profits in the same 5 year long cycle.

 

[BronsonLee]

I think you're all acting stupid as hell over a summer film

Citation: Me, 2016, The Boston Globe

 

[Prompto]

Jason Statham will rise again after Fast and Furious 8

 

[Matt]

The half of the gross thing is an oversimplification. Studios make the highest % in the US and the lowest in China, so a movie that does well in the US and poorly in China (or doesn't open at all in China) will be more profitable at $700 m than one that does strong business overseas and in China.

The percentage also changes over time. Studios make more the first week than later weeks, so a front loaded picture with poor legs would earn the studio a higher percentage than a slow burn would.

I also think it's too simplistic to say that marketing is equal to the cost of production. There are then tax breaks, military propaganda benefits (which I suspect both BvS and Suicide Squad took advantage of, etc... all of which factor into the equation.

I gladly admitted upfront it was an oversimplification, and I agree with all your points.

 

[Ahasverus]

[Citation needed]

Just go to his twitter or something, it's all he tweets about.

Oh hey, I found it: http://www.forbes.com/sites/markhug...s-despite-medias-gloom-and-doom/#23ceaf1c6f4e

 

[AnotherDayAnotherDollar]

If a movie makes any money in theaters, that's pretty good, as then the ancillary income streams are all profit (not really but you get the idea).

What part exactly do people disagree with? That studios get back half of the worldwide gross, or they amount they spend in marketing and other costs?

My understanding is that the studio keeps ~50% of the BO take in NA (sometimes more for the first couple of weeks if the movie has more pull, for example Star Wars TFA). The studio takes less overseas (like 35-40%) and way less in China (25%). So if a movie makes 500M worldwide and the majority of that take is from China, then the studio takes in less than if the majority of that take was taken from the US.

I also think marketing depends. For example, I think SS marketing was probably greater than or equal to the 175M cost to make the movie, so the "*2 formula" for real cost could be a fair estimate. On the other hand, I don't think Zootopia's marketing cost anywhere near 150M, so the formula might be way more inaccurate here.

Finally, if you're right about most studios making money off ancillary revenues and the implication that movies are mostly money losing endeavors, then Sony and Fox have a very high risk, low reward thing going on with their Marvel deal. Sony gets nothing from Spiderman merchandise and Marvel has almost no XMen/FF merchandise based on the movies (That Fox would get a percentage from. Deadpool merch is basically based off the comics, which Fox gets nothing). Fox has to give a percentage of the gross BO take to Marvel as well (Sony doesn't). Both have to pay licensing fees for the Blu Ray, VOD, DVD sales.

I don't know, I just think that rule of thumb needs to be taken with a grain of salt.

 

[Matt]

I don't but I won't go around like I do. Your stand just goes against all logic, like, companies wouldn't be making these movies, at all. Or any movie, by your formula, just put that money into some index funds and they'll get better profits in the same 5 year long cycle.

Most films do lose money in theaters. It's like the game industry, you use the few big hits to finance the rest.

And once again, you have the other revenue streams outside of the theater to help out, and hopefully put you in the black.

 

[PhantomX1313]

MF Disney/Critics got no shoppers to coverup their d*cks.1/1

 

[Ahasverus]

Most films do lose money in theaters. It's like the game industry, you use the few big hits to finance the rest.

And once again, you have the other revenue streams outside of the theater to help out, and hopefully put you in the black.

Then what about non merchandising heavy films? like those action films and stuff. I doubt very much these people are putting hundreds of millions is stake for hopefully turning a profit. I understand where you come from, there have been documented cases of marginal profits being had but just use your common sense, Hollywood accounting is a thing for a reason, these capital moguls are not putting the hopes on anything.

 

[ElBoxyBrown]

The Kubo strikes back. At this point I hope it's loss is at a minimum.

 

[sirap]

Then what about non merchandising heavy films? like those action films and stuff. I doubt very much these people are putting hundreds of millions is stake for hopefully turning a profit. I understand where you come from, there have been documented cases of marginal profits being had but just use your common sense, Hollywood accounting is a thing for a reason, these capital moguls are not putting the hopes on anything.

Lets be honest—if Matt's math was even remotely true, everyone would be making horror films.

 

[kmfdmpig]

The Kubo strikes back. At this point I hope it's loss is at a minimum.

Agreed. Such a great film, which makes it hard to see audiences ignore it in favor of SLOP and other nonsense.

 

[Slayven]

Bronsonlee is the worse

 

[TAJ]

Yeah it'll do alright there. Hopefully 100mil + if you're Paramount

Into Darkness only made $57 million there.

 

[BronsonLee]

Bronsonlee is the worse

I'm not even close to the worst in this thread

Into Darkness only made $57 million there.

Now it's being co-produced by China IIRC

 

[Matt]

Then what about non merchandising heavy films? like those action films and stuff. I doubt very much these people are putting hundreds of millions is stake for hopefully turning a profit. I understand where you come from, there have been documented cases of marginal profits being had but just use your common sense, Hollywood accounting is a thing for a reason, these capital moguls are not putting the hopes on anything.

Ancillary income isn't just merchandise. It's home sales, VOD, tv rights, foreign licensing, etc.

The film industry is entirely hit driven is a way that might not seem to follow "common sense." They do gamble tons of money to hopefully have it really pay off just a few times a year.

 

[Gamer @ Heart]

This is some ol' bullshit, come on.

?

It's absolutely true, but the number for huge tentpole with large marketing efforts is more like 2.5 gross to be profitable from the BO alone. Opening weekend, studios get the biggest chunk and then the theater starts to get a bigger share each week. International gross is obviously less as they have to report that profit back to dollars plus taxes, and the cuts are different depending on local distributors and theater chains. Like in china, the government gets 20% off the top or close to it. It's crazy.

Obviously box office is not the life of a movies profitability as they tend to have 2 or 3 lives with tie in deals,reta/digital, then premium TV/planes etc.


Some nice and informed gaffer should make a great detailed post about how the Box office works that could be linked in every new thread.

 

[Schlorgan]

Into Darkness only made $57 million there.

Independence Day Resurgence somehow did $75 million there. Star Trek better do more.

 

[Matt]

Lets be honest—if Matt's math was even remotely true, everyone would be making horror films.

This is like saying every publisher in the games industry should be making Minecraft.

Most games lose money. So do most movies, at least up front.

 

[Kenzodielocke]

Kinda sad about no China release for Suicde Squad. MoS made 63M and BvS 95M.

 

[Wafflecakes]

Lets use Rise of the Guardians as an example since it was a big budget under-performance. This should make it at least somewhat comparable to other big bedget films when we are trying to find the point at which they break even.

http://www.boxofficemojo.com/movies/?id=guardians.htm

The film made $306,941,670 globally with a 2-1 international to US split. This was done on a $145 million budget.

Dreamworks reported an $87 million write down on the film following its failure to make a profit. http://articles.latimes.com/2013/fe...tion-writedown-rise-of-the-guardians-20130225

So if you figure that the film needed to make $393 million to make a profit. That means that the film needed to make back roughly 2.7x it budget back to make a profit.



Now I admit there are many other factors such as distribution deals, what countries a film does well in, and advertising budget, this provides a good guideline for the break even point. A few years back I went through this same process for about a dozen big budget films and they call came out between 2.4x and 3.0x.

This isn't some big mystery.

 

[sirap]

This is like saying every publisher in the games industry should be making Minecraft.

Most games lose money. So do most movies, at least up front.

How do you know this? Do you have hard numbers backing this up?

I doubt Disney was fine with losing $95 million on the first Captain America (if we followed your formula). This is the same company that cancelled Disney Infinity because it wasn't making them enough money.

 

[Calm waterfall]

SS is going to surpass the $700 million, it´s a very enjoyable movie.