So here recently gotten a few questions about the box office and what I mean when I say flop or the film is going to be a financial failure. Well today Iv'e decide to explain how the box office works and what makes a film successful or a failure. So without further ado...
Ok the first thing most people look at is the budget and then how the much the movie makes worldwide and they automatically think if both are the same amount then the film made money. Well I'm here to tell you that you are dead wrong. Not included in the production budget but still counts against the film is the advertising budget which is a huge factor. Let's look at an example of this
Transcendence
Current worldwide total as of today $65,100,529
Production budget $100,000,000
Advertising budget $20-60 million (roughly every major film stays between these numbers so just for fun let's say $20 million
Money Grossed $65,100,529
Total cost $120,000,000
Totla losses $54,899,471
So in essence Transcendence has lost the studio $54 million right... not so fast. After a film has finished it's run in theaters the studio takes the toal money earned and then has to devide that money in different ways. The theaters themselves which take roughly a third of the money earned and in this case the theaters would make $21,700,176 leaving the studio with $43,400,352. Now the studio keeps the $43 million and pays the actors and crew and backend deals such as if Johnny Depp's contract says he get's 5% on the box office then he'll get his share of what's left and then the studio when it's all said and done is left with $20 million and Transcendence has officially lost the studio $100 million making it a huge flop.
Now let's take a gander at what a current film needs to make in order for it to be financially successful
The Amazing Spider-Man 2
Production Budget between $200-$255 Million (for fun we'll use $255 million)
Reported Advertising Budget $180-$200 million (for fun we'll use $200 million)
So in total The Amazing Spider-Man 2 cost $455 million to produce and market. Now let's take a look at what it needs to make to be successful...
If it makes let's say $800 million then we divide that by 3 and we get $266 million in which that goes back to the theater and now we are left with $533 million and then the studio will roughly pay out up to between 25% of the money earned and that leaves us with $400 million left over making The Amazing Spider-Man a financial failure. Now that's all guessing in the fact that we don't know the exact numbers if they end up being $200 and $180 million for production and advertising then the film has pretty much broke even. But studios aren't in the business of breaking even they want to make money. So if The Amazing Spider-Man makes between $850 and $1 billion then it will make money and be a financial success and as of today it currently has $450 million.
So there you have it ladies and gentlemen that's how the box office works and I hope I was clear enough in my explanation and If I wasn't then just tweet me ,message me on Facebook or just leave a comment below and let your voice be heard.
Jonah Sparks
Ok the first thing most people look at is the budget and then how the much the movie makes worldwide and they automatically think if both are the same amount then the film made money. Well I'm here to tell you that you are dead wrong. Not included in the production budget but still counts against the film is the advertising budget which is a huge factor. Let's look at an example of this
Transcendence
Current worldwide total as of today $65,100,529
Production budget $100,000,000
Advertising budget $20-60 million (roughly every major film stays between these numbers so just for fun let's say $20 million
Money Grossed $65,100,529
Total cost $120,000,000
Totla losses $54,899,471
So in essence Transcendence has lost the studio $54 million right... not so fast. After a film has finished it's run in theaters the studio takes the toal money earned and then has to devide that money in different ways. The theaters themselves which take roughly a third of the money earned and in this case the theaters would make $21,700,176 leaving the studio with $43,400,352. Now the studio keeps the $43 million and pays the actors and crew and backend deals such as if Johnny Depp's contract says he get's 5% on the box office then he'll get his share of what's left and then the studio when it's all said and done is left with $20 million and Transcendence has officially lost the studio $100 million making it a huge flop.
Now let's take a gander at what a current film needs to make in order for it to be financially successful
The Amazing Spider-Man 2
Production Budget between $200-$255 Million (for fun we'll use $255 million)
Reported Advertising Budget $180-$200 million (for fun we'll use $200 million)
So in total The Amazing Spider-Man 2 cost $455 million to produce and market. Now let's take a look at what it needs to make to be successful...
If it makes let's say $800 million then we divide that by 3 and we get $266 million in which that goes back to the theater and now we are left with $533 million and then the studio will roughly pay out up to between 25% of the money earned and that leaves us with $400 million left over making The Amazing Spider-Man a financial failure. Now that's all guessing in the fact that we don't know the exact numbers if they end up being $200 and $180 million for production and advertising then the film has pretty much broke even. But studios aren't in the business of breaking even they want to make money. So if The Amazing Spider-Man makes between $850 and $1 billion then it will make money and be a financial success and as of today it currently has $450 million.
So there you have it ladies and gentlemen that's how the box office works and I hope I was clear enough in my explanation and If I wasn't then just tweet me ,message me on Facebook or just leave a comment below and let your voice be heard.
Jonah Sparks
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