Describing an average fee for scoring a feature film has a similar problem. Many more aspiring film composers aren’t included in this statistic because they never break into the industry, sometimes after years of trying. When you land a scoring assignment, you immediately have mondy obligations that can be in conflict. In fact, figuring out how to resolve those conflicts without being fired is an important skill for a film scorer. Alternatively, you may not meet anyone until after you’ve started work. Sometimes, you’ll mke detailed instructions about what the director wants out of the score, but you really can’t count on its accuracy. At other times, you’ll receive two different instructions, one from the director, the other from the producer.
“We’re going to need a bigger boat”
If you really liked a particular movie, and you’re hoping it made enough money to warrant a sequel, then the wealth of box-office news can be confusing. How can you tell when a movie’s a hit? We asked the experts. If you even pay a little attention to what’s going on in the entertainment industry, it’s easy to get snowed in with box office information that seems meaningful, but is hard to interpret. If a movie’s number one in its opening weekend, does that mean it’s automatically a hit? Or is the percentage drop between the first and second weekends the important number? And so on. News outlets tend to report lots of box-office data without giving that much context. As Phil Contrino, editor of BoxOffice. They look at the opening weekend — and instantly a movie is a success or a failure. Sometimes, a film can do well in its first weekend and then stumble in later weekends. Or a film can develop «legs,» like Christopher Nolan’s Inception , and win a few weekends in a row. Studio accounting, designed to make sure people don’t collect on back-end deals, is a marvel. So how do you know if the box-office gods have smiled enough on your favorite movie that studios are likely to greenlight similar films? The short answer is, it depends on a number of factors, but a rule of thumb seems to be that the film needs to make twice its production budget globally. For the longer answer, read on. There’s a lot more, although studios are loath to give out numbers. The studios seldom release accurate production budgets — and they’re even more leery of revealing how much they spend on other stuff, like promotion.
What is the most expensive movie genre?
But even that huge number doesn’t mean that all movies are money makers. Although there are thousands of movies made every year, only a percentage of those become feature films with the big budgets we often associate with the Hollywood movie-making business. And though the occasional independent, low-budget film will break out and become a runaway hit «Napoleon Dynamite,» «Super Size Me» and «Paranormal Activity» are all fairly recent examples , most blockbusters are on the high-budget end. Those are high-budget examples of movies that made enough to justify the expense, but not all movies do. Then there was «How Do You Know? Whether a movie makes or loses money, though, one question that seems to reappear often is just why it costs so much to make a movie. What magic potion must be acquired that brings the cost so high? And production isn’t the end of the story: special effects, depending on the type of movie, can be an enormous cost, and music has to be composed and performed as well. Then, when the whole movie is made and ready to go, it’s time to start in on the work of marketing and distributing. After all that money invested, you can be sure that marketing is not an overlooked part of the process. The fact that marketing expense is not included in production cost figures is why studios may claim to have lost movie on a money that grossed more than its negative, or production, cost. The Bottom Line Even with all those big numbers, and potential for huge losses, the movies keep coming. Tools for Fundamental Analysis. Company Profiles. Alternative Investments. Your Money. Personal Finance. Your Practice. Popular Courses. Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Alternative Investments How to Invest in Movies. Partner Links. Related Terms Profit Margin Profit margin gauges the degree to which a company or a business activity makes money. It represents what percentage of sales has turned into profits.
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This is an article I have wanted to research and write for a long, long time. I finally had a moment to sit down and crunch the numbers — I hope it helps in the understanding of Hollywood economics. Almost as long as there have been movies, Hollywood has relied on huge-scale productions to bring in the big bucks. The Extra-Terrestrial As the films have grown, so too have the spoils on offer. The starting point for working out the final costs of releasing a movie is to look at how much it cost the studio to shoot the film i.
This includes…. Budgets have been rising in recent decades, well above inflation. In the following ten years this rose to The information available online is normally a mix of true figures which have leaked and educated guesses by industry experts. The studios often try to hide the true cost of a movie, in order to make themselves seem thriftier, smarter or more in control than they actually are.
I performed a quick check for the 29 blockbusters I have inside data on compared with their budgets listed on Wikipedia. Some of the other costs involved in making and releasing a film include…. To give you a little more detail and context, below are some notes on each of the main cost areas…. Judging the correct number of prints and units to manufacture is a key part of the planning done by the studios.
If they order too few then cinemas and stores will have to turn away customers in the all-important first few weeks of release. If they over-order then their costs increase and they are left with annoyed cinema owners and large quantities of unsold units. Giving these people a share of the income is a good way for the studio to hedge against poor box office performance and it also defers the moment they have to pay up.
On the flipside, studios have got rather good at using creative accounting techniques to show that they made a loss on paper in order to get out of paying such fees. Fortunately, Hollywood is rather good at squeezing every penny out of a movie, ensuring that the target customer is given how much money does the average film make chances to pay to see it.
Movies may start in cinemas but they are far from the only place they earn money. Each stage at which a movie reaches a new type of platform i. Of the 29 Hollywood blockbuster movies I studied, 14 generated a profit and 15 lost money. Note: The following discussion of profit uses this formula: all revenue received by the studios from a particular movie minus all costs they internally attribute to that production.
The smallest movies within my dataset i. Would you have made a smart investment? And I am sure this is a fairly low return for that kind of cash.
The only problem is — how do you spot the hits? Hollywood currently employs the smartest, best informed and most profit-focused people in an effort to exclusively make profitable movies and yet half of their movies lose money. In fact, their combined best efforts only produce a 3. Yes, but only by a very small margin. The average Metacritic score i. Similarly, IMDb audiences rated the profitable films an average of 6.
However, we can say that, yes, movies with the biggest marketing budgets do seem to gross the highest amounts at the box office. Added to this, studios are less likely to make missteps on their home turf as they can be on-hand to scrutinise everything to a greater extent. Well, it depends on which part of the process you look at. Below you can see the origin of revenue and costs for the blockbusters in my dataset. As you can see, the majority of the money collected at the box office does indeed come from countries outside of the US and Canada.
However, studios spend a higher proportion of their marketing money in North America. This could be for a number of reasons including the higher cost of advertising in America, the temptation to spend more in the country which studio execs actually live in and because the US is often the first place a movie is released and the media enjoy reporting on huge opening weekends and decrying massive flops.
Together, they mean that only 12 of my 29 movies made money at the domestic box office, whereas 20 made money at the international box office. Alongside this, the losses at the domestic theatrical market were much worse than internationally. So Hollywood looks to the international market with glee because…. Q4: Is there a rule of thumb for guessing which Hollywood blockbusters are in profit?
They reached this conclusion by studying the full financial records of the movies they were involved with and also checking their hypothesis with independent professional film financiers. Using this rule, I was able to correctly identify all of the profit-making films and correctly identify ten as loss-making, however, this system incorrectly marked five loss-making movies as being profitable.
Not as reliable as one might have liked and way below the accuracy the BFI found when the rule is applied to smaller films but certainly interesting.
So there you have it — a rather long sorry! The biggest question some readers may have at this stage is — how did he get this data?
I was also helped by a few well-placed friends in the industry who were able to fill in the blanks and confirm the veracity of some of the data points. I am completely confident that the information in this article is a true representation of how these Hollywood blockbusters make money. The purpose of this site is educational and my sole intention is to help explain how our industry works. In the past, I have been contacted by lawyers for various companies, trying to prevent the sharing of key data points relating to their business.
So far, I have managed to avoid lawsuits and also to avoid having to take any articles down, but if I were to offer the how much money does the average film make figures as a download or details of how to do the same piecing together I have then I suspect I would get the wrong kind of attention.
So, if you want to know any more about these movies, please add your question in the comments. Very informative and great info as.
Thank you, Stephen for some scintillating reading. When is someone offering you a book deal? Great work Stephen — thank you. And related to this can you demystify the roles, contributions and compensation for these various kinds of producers?
Very helpful. Re the query on books sinceour volumes Global Hollywood and Global Hollywood 2 are more recent than the one. They are also available in Chinese, Turkish, and Spanish. Stephen, please, please put all of this marvellous stuff in a book. Thank you for this amazing work! Can you clarify here? Thanks. Marketing and avertsing are not included, save maybe for the on-set photographer and a publicist who shows journalists around the set.
This is particularly important for things like tax incentives, which almost never include publicity and distribution costs when calculating how big the budget is. Both have a reasonable claim to be correct. The budget is a real document created in pre-production which covers the cost of physically making the film.
Before internet streaming as we know it now, Pay Per View PPV was commonplace, in hotel rooms and on encrypted satellite and cable channels. As VOD has grown up, the newer services have become their own new window but the old way of accounting for the older services were retained.
So strictly, the idea of digital delivery of video on demand to the viewer appears within three windows! Just two questions about the average costs graph: 1. Instead of being included in costs? The opacity occurs for a number of reasons but most are to do with hiding embarrassing or unattractive practices, because they can and because there is no benefit from being open.
Wow Stephen. Scary stuff. I want to break down the costs and show how they differ between products. Thank you Steve for your informative article. The research that went into it must have been enormous as it covered so much of the movie business including distribution. I was really interested in the DVD sales figures and the overseas theatrical markets as the advertising would be.
Thank you for your info!!! Michael L Edwards. Can you say the swing on that? Stephen, thank you for your informative detailed article. This is the sort of thing the internet would ideally be used for, instead of widespread trolling.
Keep up the good work. Thank you for the information and the analysis you have performed. The real numbers are never released, nor should.
Nobody in the industry pays those numbers. At the end of the day, the important numbers and analyses come from what the windows revenue figures are and their relationships. As for profits… do magicians reveal their tricks? Hey Adrian. Glad you found it useful. This allowed me to compare the true cost to that of the public figure in this case from Wikipedia. Hi Stephen, thanks for the excellent analysis. Do you have any data to support or contradict these numbers?
What’s the average cost of making and selling a Hollywood blockbuster?
This is an article I have wanted to research and write for a long, long time. I finally had monye moment how much money does the average film make sit down and crunch the numbers — I hope it helps in the understanding of Hollywood economics. Almost as long as there have been movies, Hollywood has relied on huge-scale productions to bring in the big bucks. The Extra-Terrestrial As mudh films have grown, so too have the spoils on offer. The starting point for working out the final costs of releasing a movie is to look at how much it cost the studio to shoot the film i. This includes…. Budgets have been rising in recent decades, well above inflation. In the following ten years this rose to The information available online is normally a mix of true figures which have leaked and educated guesses by industry experts. The studios often try to hide the true cost of a movie, in order to make themselves seem thriftier, smarter or more in control than they actually are. I performed a quick check for the 29 blockbusters I have inside data on compared with their budgets listed on Wikipedia. Some of the other costs involved in making and releasing a film include…. To give you a little more detail and context, below are some notes on each of the main cost areas….