Movie Finance Question
Professor
data for movies to see which ones make money, which ones lose money,
etc. in part to see how JMS' film (and future films) do at the box
office.
I have examined imdb.com and box office mojo. On box office mojo it
shows domestic ticket sales and foreign ticket sales and what I would
guess is an estimate of production cost for the movie.
In simple finanical terms, if you take the costs of production and
subtract out the revenue from ticket sales, domestic and foreign, this
would provide a profit or loss for the film. However, I suspect there
are numerous other cost items like distribution, advertising, etc.
that are not part of the production cost number indicated and there
are revenue items in terms of merchandise, DVD sales and rentals that
do not show up on the other side of the ledger either.
Does anyone knonw of a better site, or a better calculation, to
determine if a movie is or is not profitable for a studio?
David
Dan Dassow
wrote:
Corporations consider financial information proprietary and generally
do not disclose financial information that is not specifically
required by federal law by the U.S. Securities and Exchange Commission
(SEC). You can search public SEC filings at http://www.sec.gov/edgar.shtml
. You can also check individual company Annual Reports, such as the
one for Disney ( http://corporate.disney.go.com/investors/annual_reports/2008/index.html
). However, you are unlikely to find the detailed information that you
seek.
Dan Dassow
Mac Breck
Honest detailed information would fly right in the face of Hollywood
creative bookkeeping, so you're not going to get honest numbers for a
specific project.
http://www.jmsnews.com/msg.aspx?id=1-569
http://www.jmsnews.com/msg.aspx?id=1-10921
http://www.jmsnews.com/msg.aspx?id=1-17689&query=shot%20in%20Bolivia%20burns%20down
--
Mac Breck (KoshN)
-------------------------------
"Babylon 5: Crusade" (1999) - "War Zone"
Galen (to Gideon): "I've been penalized before for helping other
people. I've been trying to decide whether or not I should risk it
again."
Dan Dassow
>
Since the SEC does not require detailed information by project, the
Hollywood creative bookkeeping does not violate federal law. <*** SIGH
***>
Dan Dassow
Blair Leatherwood
that a movie needs to gross (at a minimum) 1.5 times its production cost
to even consider being in the black. This is based on really old
information that I can't substantiate, but it sticks in my head (as many
things worthwhile and worthless seem to do). The factor will vary based
on advertising, etc.
Of course, most studios will tell you (especially if you're the writer
or have points in the production) that no movie ever makes any money.
Blair
Joseph DeMartino
wrote:
> Without getting into actual numbers, I think the rule of thumb has been
> that a movie needs to gross (at a minimum) 1.5 times its production cost
> to even consider being in the black.
Actually I'm pretty sure the rule--of-thumb is that a film has to
gross *three times* its production costs in order to break even. This
estimate also covers the cost of prints, distribution and
advertising.
Regards,
Joe
Chris Adams
>Honest detailed information would fly right in the face of Hollywood
>creative bookkeeping, so you're not going to get honest numbers for a
>specific project.
Well, as Dan pointed out, most companies just don't give out any more
information than the have to, no matter the reason. Public-traded
companies risk having somebody find some flaw (or disagreement about
some spending, etc.) and filing a lawsuit, and private-owned companies
just don't have any reason to tell anybody (especially competitors)
anything.
The whole "Hollywood accounting" thing is a separate issue.
A part of the reason Google went public when they did was because the
federal government requires most of the same info from private companies
that have (gross? net?) revenue over a certain large amount as they do
from public companies. Google didn't really want to publish that info
(so they held off on going public), but when they passed the line, they
had to publish it anyway (and so a big advantage of staying private
disappeared).
--
Chris Adams <cma...@hiwaay.net>
Systems and Network Administrator - HiWAAY Internet Services
I don't speak for anybody but myself - that's enough trouble.
Blair Leatherwood
Blair
Duggy
It also has to be remembered that Box-Office is what the cinemas get,
not what the studios get.
===
= DUG.
===
Duggy
I'm not sure inflation is the word. Tickets rise faster than
inflation, I believe (correct me if I'm wrong).
Rather, it's a case that whereas once a movie poster in every cinema
and a trailer was your advertising, you're now spending money of a
world tour by the actors to promote the film, 3D displays in every
cinema, a series of "character" posters, a teaser trailer, the main
trailer, another trailer. many, many more prints for huge opening
weekends, publicity stunts, etc...
===
= DUG.
===
Jon Schild
But depending on the "agreement" forced on the theaters by the much more
powerful studios, 90% of box office is likely to be what the studio
gets. We can thank the studios for $8.00 drinks and $5.00 candy bars as
the theaters try to survive on their small share of box office.
Blair Leatherwood
> On Jan 3, 1:52 am, Blair Leatherwood <bleatherw...@comcast.net> wrote:
>> Joseph DeMartino wrote:
>>> On Jan 1, 11:56 pm, Blair Leatherwood <bleatherw...@comcast.net>
>>> wrote:
>>>> Without getting into actual numbers, I think the rule of thumb has been
>>>> that a movie needs to gross (at a minimum) 1.5 times its production cost
>>>> to even consider being in the black.
>>> Actually I'm pretty sure the rule--of-thumb is that a film has to
>>> gross *three times* its production costs in order to break even. This
>>> estimate also covers the cost of prints, distribution and
>>> advertising.
>>> Regards,
>>> Joe
>> Ahh, inflation (I *said* my information was really old!).
>
> I'm not sure inflation is the word. Tickets rise faster than
> inflation, I believe (correct me if I'm wrong).
How about "inflation of ticket prices"? Is that specific enough for you?
And, general inflation does apply here as well. My "rule of thumb" is
at least 20 years old, and prices for everything (tickets, advertising,
above and below the line costs) have all gone up. Some of those costs
included in production are probably not connected to the general economy
anyway.
As to the remainder of your response, the movie biz has used every means
of advertising available since day one--not just trailers and lobby
cards, but many of the other options you mention (whatever the
technology of the day would allow).
Blair
voxwoman
> Once upon a time, Mac Breck <macthevor...@yahoo.com> said:
>
> >Honest detailed information would fly right in the face of Hollywood
> >creative bookkeeping, so you're not going to get honest numbers for a
> >specific project.
>
> Well, as Dan pointed out, most companies just don't give out any more
> information than the have to, no matter the reason. Public-traded
> companies risk having somebody find some flaw (or disagreement about
> some spending, etc.) and filing a lawsuit, and private-owned companies
> just don't have any reason to tell anybody (especially competitors)
> anything.
>
> The whole "Hollywood accounting" thing is a separate issue.
>
> A part of the reason Google went public when they did was because the
> federal government requires most of the same info from private companies
> that have (gross? net?) revenue over a certain large amount as they do
> from public companies. Google didn't really want to publish that info
> (so they held off on going public), but when they passed the line, they
> had to publish it anyway (and so a big advantage of staying private
> disappeared).
>
> --
> Systems and Network Administrator - HiWAAY Internet Services
> I don't speak for anybody but myself - that's enough trouble.
You don't happen to know what amount that is, do you?
Chris Adams
>You don't happen to know what amount that is, do you?
No, I don't remember. It was in a number of news stories before Google
announced their IPO (when speculation was building).
--
Chris Adams <cma...@hiwaay.net>
Duggy
> But depending on the "agreement" forced on the theaters by the much more
> powerful studios, 90% of box office is likely to be what the studio
> gets. We can thank the studios for $8.00 drinks and $5.00 candy bars as
> the theaters try to survive on their small share of box office.
I've experienced fixed rate ($200 - $300) and a fixed rate plus 10%
but that's for single screenings of older films and in Australia.
Obviously, latest films will be higher.
===
= DUG.
===
Duggy
> Duggywrote:
> > On Jan 3, 1:52 am, Blair Leatherwood <bleatherw...@comcast.net> wrote:
> >> Joseph DeMartino wrote:
> >>> On Jan 1, 11:56 pm, Blair Leatherwood <bleatherw...@comcast.net>
> >>> wrote:
> >>>> Without getting into actual numbers, I think the rule of thumb has been
> >>>> that a movie needs to gross (at a minimum) 1.5 times its production cost
> >>>> to even consider being in the black.
> >>> Actually I'm pretty sure the rule--of-thumb is that a film has to
> >>> gross *three times* its production costs in order to break even. This
> >>> estimate also covers the cost of prints, distribution and
> >>> advertising.
> >>> Regards,
> >>> Joe
> >> Ahh, inflation (I *said* my information was really old!).
>
> > I'm not sure inflation is the word. Tickets rise faster than
> > inflation, I believe (correct me if I'm wrong).
> How about "inflation of ticket prices"? Is that specific enough for you?
Well that just doesn't make sense.
If once needed to make back 3x instead of 1.5x on the box office and
the box-office is higher than inflation...
> As to the remainder of your response, the movie biz has used every means
> of advertising available since day one--not just trailers and lobby
> cards, but many of the other options you mention (whatever the
> technology of the day would allow).
No to the degree they do today.
===
= DUG.
===
Fel
> Duggy wrote:
> > On Jan 2, 4:28 pm, Joseph DeMartino <jdema...@bellsouth.net> wrote:
> >> On Jan 1, 11:56 pm, Blair Leatherwood <bleatherw...@comcast.net>
> >> wrote:
>
> >>> Without getting into actual numbers, I think the rule of thumb has been
> >>> that a movie needs to gross (at a minimum) 1.5 times its production cost
> >>> to even consider being in the black.
> >> Actually I'm pretty sure the rule--of-thumb is that a film has to
> >> estimate also covers the cost of prints, distribution and
> >> advertising.
>
> > It also has to be remembered that Box-Office is what the cinemas get,
> > not what the studios get.
>
> > >
> But depending on the "agreement" forced on the theaters by the much more
> powerful studios, 90% of box office is likely to be what the studio
> gets. We can thank the studios for $8.00 drinks and $5.00 candy bars as
Ok, but the up to 90% is only for the first week of release. 2nd and
3rd week are typically around 50% and after that it's more like 80%
for the cinema. As most of the movies (especially hyped blockbusters)
are very frontloaded, I would estimate that the studio would get
around 65% of the movie box office.
However, one should keep in mind that the movie theater is not the
major revenue stream of a movie. I only have numbers for 2000, but
then only about 25% of the revenue came from the theater, the
remaining 75% from DVD (and at that time also VHS) sales and from TV
rights. (The percentage might have shifted away from to theatre more
towards home video in the last 10 years).
So it might well be that a movie needs to have a box office of 3 times
its production cost to make it in to the black with cinemas alone, but
the overall business case is different.
So long,
Mark
Blair Leatherwood
> On 3 Jan., 16:10, Jon Schild <j...@xmission.com> wrote:
>> Duggy wrote:
>>> On Jan 2, 4:28 pm, Joseph DeMartino <jdema...@bellsouth.net> wrote:
>>>> On Jan 1, 11:56 pm, Blair Leatherwood <bleatherw...@comcast.net>
>>>> wrote:
>>>>> Without getting into actual numbers, I think the rule of thumb has been
>>>>> that a movie needs to gross (at a minimum) 1.5 times its production cost
>>>>> to even consider being in the black.
>>>> Actually I'm pretty sure the rule--of-thumb is that a film has to
>>>> estimate also covers the cost of prints, distribution and
>>>> advertising.
>>> It also has to be remembered that Box-Office is what the cinemas get,
>>> not what the studios get.
>>> = UG.
>>> =
>> But depending on the "agreement" forced on the theaters by the much more
>> powerful studios, 90% of box office is likely to be what the studio
>> gets. We can thank the studios for $8.00 drinks and $5.00 candy bars as
>> the theaters try to survive on their small share of box office.- Zitierten Text ausblenden -
>
> Ok, but the up to 90% is only for the first week of release. 2nd and
> 3rd week are typically around 50% and after that it's more like 80%
> for the cinema. As most of the movies (especially hyped blockbusters)
> are very frontloaded, I would estimate that the studio would get
> around 65% of the movie box office.
> However, one should keep in mind that the movie theater is not the
> major revenue stream of a movie. I only have numbers for 2000, but
> then only about 25% of the revenue came from the theater, the
> remaining 75% from DVD (and at that time also VHS) sales and from TV
> rights. (The percentage might have shifted away from to theatre more
> towards home video in the last 10 years).
> So it might well be that a movie needs to have a box office of 3 times
> its production cost to make it in to the black with cinemas alone, but
> the overall business case is different.
>
> So long,
>
> Mark
>
>
Quote from article:
20th Century Fox, Dune Entertainment and Ingenious Film Partners spent
about $280 million to produce "Avatar," while Fox kicked in an extra
$150 million for worldwide marketing and distribution. Since studios
collect a bit less than half of worldwide ticket sales, it will likely
earn a small profit on theatrical revenue alone and significantly more
from DVD and other markets.
Duggy
> Ok, but the up to 90% is only for the first week of release. 2nd and
> 3rd week are typically around 50% and after that it's more like 80%
> for the cinema. As most of the movies (especially hyped blockbusters)
> are very frontloaded, I would estimate that the studio would get
> around 65% of the movie box office.
As well as blockbusters SF & Comic book films are also heavily
frontloaded (the built in fan audience go the first week) so the
studios must love them.
===
= DUG.
===
Duggy
wrote:
> I am looking around at the publically available sources of financial
> data for movies to see which ones make money, which ones lose money,
> etc. in part to see how JMS' film (and future films) do at the box
> office.
A data point in the old can JMS get big money to make a B5 movie has
emerged.
http://money.9msn.com.au/article.aspx?id=988784
Personally, I don't buy this. "Big name" stars often have
"flops" (although because they get more attention "modest success" is
often called a flop in these discussions.)
I would also suggest that James Cameron counts as a big name and that
Avatar had hype - which is why they use big names (to hype the film a
little more).
However, our discussion of whether I think this is worth considering
for later discussions on the topic.
===
= DUG.
===
Doug Freyburger
>
> Ok, but the up to 90% is only for the first week of release. 2nd and
> 3rd week are typically around 50% and after that it's more like 80%
> for the cinema. As most of the movies (especially hyped blockbusters)
> are very frontloaded, I would estimate that the studio would get
> around 65% of the movie box office.
I recently read an appeal by one of the cinema chains to go to films in
the second and subsequent weeks. This would explain such an appeal.
For a long time the majority of our movie watching has been 2nd and 3rd
week movies. We've done that to avoid the crowds and the catch the
non-critic street reports of movies. But we're fans of certain movie
types that we tend to see in the first week.
> However, one should keep in mind that the movie theater is not the
> major revenue stream of a movie.
And the ticket income is not the high profit item for the cinemas
either. That's why concession stand prices are so high. There are
times I'd rather pay an extra dollar for the tickets and a dollar less
for the soda and there are times I go to the matinee and don't buy a
soda so there's no optimal point for me on the topic.
> I only have numbers for 2000, but
> then only about 25% of the revenue came from the theater, the
> remaining 75% from DVD (and at that time also VHS) sales and from TV
> rights. (The percentage might have shifted away from to theatre more
> towards home video in the last 10 years).
That tells me that sane studio execs use DVD sales to decide on what to
film. The fact that we haven't seen a B5 DVD in years tells me that
sanity is rare among studio execs. That's not exactly news as I've
known that ever since they cancelled ST-TOS when I was a kid.
> So it might well be that a movie needs to have a box office of 3 times
> its production cost to make it in to the black with cinemas alone, but
> the overall business case is different.
Hollywood, known for special effects over plotline, can hardly be
expected to have books without the same principle.
Duggy
> Fel wrote:
> > So it might well be that a movie needs to have a box office of 3 times
> > its production cost to make it in to the black with cinemas alone, but
> > the overall business case is different.
> Hollywood, known for special effects over plotline, can hardly be
> expected to have books without the same principle.
Then again, FX-over-plot do better in the first week so the studios
aren't dumb...
===
= DUG.
===
Professor
movies.
Given the information provided, the 3x gross measure, the DVD
variable, and the variable take after x number of weekends, would you
considered the two JMS connected movies below financially successful?
Note this data comes from BoxOfficeMojo.com and needs to be understood
in that context.
Changling
Domestic: $35,739,802 31.6%
+ Foreign: $77,254,202 68.4%
= Worldwide: $112,994,004
Limited Opening Weekend: $489,015
(#20 rank, 15 theaters, $32,601 average)
Wide Opening Weekend: $9,351,560
(#4 rank, 1,850 theaters, $5,055 average)
% of Total Gross: 26.2%
Production Budget: $55 million
Ninja Assassin
Domestic: $37,509,658 100.0%
+ Foreign: n/a 0.0%
= Worldwide: $37,509,658 (still in theaters)
Opening Weekend: $13,316,158
(#6 rank, 2,503 theaters, $5,320 average)
% of Total Gross: 35.5%
Production Budget: $40 million
Any idea on how foreign box office receipts are shared?
JMS stated on a recent post when asked about how WB liked the
performance of Ninja Assassin and he stated "Warners is more than
satisfied with the results." Do you think this means it has met, or is
meeting, exepections or that is it making money for WB?
David
Duggy
> Any idea on how foreign box office receipts are shared?
No idea at all... but there are a number of factors.
First up, the % (whatever they are) go to the local distributor first.
If that distributor is part of the parent company (say "Fox Australia"
or whatever) then I guess the parent company gets a share of it
(although, Hollywood accounting means the The Studio sells to their
own Distributor at a loss... although the company as a whole can still
make money).
For other distributors it would have to depend on the deal they have
with the studio in question... (it's not easy, is it?)
> JMS stated on a recent post when asked about how WB liked the
> performance of Ninja Assassin and he stated "Warners is more than
> satisfied with the results." Do you think this means it has met, or is
> meeting, exepections or that is it making money for WB?
Probably is making money or heading towards making money if tickets,
DVDs follow expected trends. Doesn't mean that anyone would be
getting Net-Points any time soon as they're probably a long way off
ever "making money".
===
= DUG.
===
Fel
> Changling
Clearly a money maker overall.
> Ninja Assassin
For this, I would guess that the overall revenue is even more DVD
oriented. For a medium budget action movie, DVD rentals are typically
higher than for other types of movies compared to their box office.
Also, I'd think that the Asian market is the major benchmark for this
film, so we'll have to wait and see ;) but my estimation is that it
will make good money for WB.
> Any idea on how foreign box office receipts are shared?
As Duggy has already written, this is a rather complex matter and I
have no idea about the typical distribution deals. From what I know,
the box office in Europe is more in favour of the cinemas compared to
the US with typically 55-60% going to the cinema and only 40-45% to
the distributer.
So long,
Mark
Dan Dassow
> Once upon a time, Mac Breck <macthevor...@yahoo.com> said:
>
> >Honest detailed information would fly right in the face of Hollywood
> >creative bookkeeping, so you're not going to get honest numbers for a
> >specific project.
>
> Well, as Dan pointed out, most companies just don't give out any more
> information than the have to, no matter the reason. Public-traded
> companies risk having somebody find some flaw (or disagreement about
> some spending, etc.) and filing a lawsuit, and private-owned companies
> just don't have any reason to tell anybody (especially competitors)
> anything.
>
> The whole "Hollywood accounting" thing is a separate issue.
>
http://www.starwars.com/vault/books/blockbusting/news20091215.html
http://preview.tinyurl.com/yd955e3
... George Lucas's Blockbusting, edited by Lucy Autrey Wilson and Alex
Ben Block, is a comprehensive look at 300 of the most financially and/
or critically successful motion pictures of all time ...
The stumbling block was, of course, the lack of a centralized and
legitimate database of accurate movie information. Movie producers and
distributors keep tight control on information, revealing only the
statistics they choose to promote their films and non-studio employees
are not allowed to research movie production files unless they have
been donated to various research libraries (such as AFI, USC, The
Academy, etc.). Although there is an abundance of information that can
be found on the Internet and elsewhere, it is often contradicted by
statistics from other sources. The secrecy, controlled access to
information, and inconsistencies with published data made it
impossible for us to obtain all of the desired information on all of
the chosen films. ...
Dan Dassow