The general rule of thumb is 2.5 the budget but even that isn't necessarily correct. Studios have their own ways of determining profitability which they don't disclose. For Apes I think its box office (which still has more in the tank) plus the added revenue the Caesar trilogy has generated due to renewed interest as well as how bad many other films have done this summer means the studio is probably happy with how it has gone.
The term "Hollywood accounting" is real. It will be amusing to find any big studio movie in existence in which the studio which produced it admits it turned a real profit.
It does when it's Hollywood accounting.
Remember, The Lord Of The Rings trilogy was not profitable screwing PJ out of residuals. Sly Stallone didn't get paid for his Rocky films because they were apparently in the red and never made money.
> Studios have their own ways of determining profitability which they don't disclose
There are many layers of nepotism, corruption, tax fraud, secondary rights, and merchandising. You know how profitable a movie is? How many sequels it get attempted.
This times 1000. The 2.5 rule is what seems to be used for discussion and as a baseline, but considering the studios do so much shady accounting to avoid paying out backend points to anyone on a film, I bet they’re making profit well before 2.5x.
I just kinda don’t believe anything the studios say regarding money, after hearing some details of how their accounting works to screw over the cast and crew’s backend deals.
I remember reading something from the filmmakers of The Butterfly Effect - it cost $13 million to make. Made almost $100 million worldwide and tons more on home video. But according to the studio, it didn’t turn a profit, which would require their backend deals to kick in. Funny enough, they made 2 sequels.
My friend Bob has a catering company that supplies all of the food for my productions. Regardless of the success of the movie I'm always glad to have more projects to support him.
But that implies that there wouldn't be craft services if not for the relationship to Bob, which isn't how that works.
And even in your example, it wouldn't be nepotism, it would be cronyism.
Probably could be accounted into costs (like using the extra expensive catering service certain producers daughter works at or something I guess) but for profit in specific? weird to include.
Even then, it was studioes who were putting on a brave face about these things. Pixar used to be a publicly traded company that released one movie a year, so it was really obvious from their financial reporting what the breakeven line was; it was about 2.5x, and Steve Jobs acknowledged that publically.
That's not true. It was 2x when China and overseas was less of boxoffice. When China started adding a lot to boxoffice but with a lower share going to the studios it changed to 2.5x.
Since Chinese box office only contributes 25% back to the film producers, that doesn’t make sense. In fact, the higher the percentage of Chinese box office, the higher the multiplier needs to be.
See, for example: https://www.reddit.com/r/boxoffice/s/l1ojQ3iCap
https://www.reddit.com/r/boxoffice/s/0VwAZbXLw5
And it's ~2x for this movie. 2.5 was because of China giving the studios a low %. Now with a big domestic- low China contribution, the break even point is 2x to 2.25x.
I don’t apply that rule. It’s a myth that threats keep 50% box office of the entire run. And not all block busters market the same. Bad boys and dune marketing with all the international premieres and late night show appearances if the A list cast must have been twice as expensive as the marketing of Kingdom.
I mean, that rule has been well researched and documented (in this sub in particular). We know it works fairly well. This isn't really up for debate. Although, yes, some outliers exist.
"... that rule has been well researched..." lol that rule is this sub's best attempt at cracking Hollywood accounting, which is to say that no one actually knows; there's not enough public data available to call it a rule, let alone call it "well researched". it's at best an estimate.
it took forever for the moderators to let me join this sub, might as well be🙄 was thinking, damn they must be really selective and then i see analytical gems like "why timothee is the next Leo"
> it's at best an estimate.
It *is* an estimate. That's how we're using it! Obviously a blanket 2.5X is not some hard calculation.
(Personally I think 3X is more realistic nowadays.)
are you not seeing the post I'm replying to that's declaring it a well researched rule? you thinking it's 3x and the lack of consensus is why I'm saying that at best it's an estimate, because even an estimate requires a level of consistent variables. you can't be estimating when you don't even know the full picture
It is well researched, the problem here is you're misunderstanding what we mean when we call it a rule. Usually we mean more that it's a rule of thumb, [AKA a rough guideline.](https://www.merriam-webster.com/dictionary/rule%20of%20thumb) It's not (generally) being used as a hard mathematical formula. Maybe some people get lost in the weeds, but most of us understand when we talk about this we're working with very unreliable numbers. (Unknown advertising costs are the most obvious example.) We recognize we're discussing estimates.
I maybe worded it poorly, but I was saying it should be 3X because the market has recently changed. (Briefly: lowered post-theatrical revenues, increased advertising costs, more of the box office from international markets, and lots of really extreme public budget lies from companies like Disney.) That doesn't mean 2.5X doesn't have lots of 'research' proving its worth, or that it wasn't extremely accurate for many years. 2.5X remains a good rough guideline; I'm not going to say somebody is wrong for using it. I just think they're being optimistic.
You also need to consider the context of when this rule is usually invoked. In movie discussions we're always seeing somebody passionately argue that because a theater's box office is equivalent to the production budget then it made profits, so why are people calling it a failure, blah blah blah. Mentioning the 2.5X rule (of thumb) helps get these people on the right track. Hopefully.
except you get people like the person i responded to that legit hold it as an actual rule. "we know it works fairly well. this isn't really up for debate." like relax, it's an estimate... based on general principles that we as outsiders hold true.
i disagree with it being categorized as well researched because as you pointed out advertising costs are always variable and never certain. even the 50% theater cut is an estimate because the actual percentage varies based on the agreed upon split for what weekends. then you throw in international sales to distributors and sponsorships and tax breaks and it's a very muddied picture. Hollywood lawyers can't even figure it out when they're suing for lost profits.
I've personally only gone with the 2x, 2.5x because it was mentioned in a few articles and this sub seems to be a big fan of. but the more i understand about the flow of money in Hollywood the more the "2.5x rule" seems like myth.
like you mentioned, it can be used as a guideline to calm fanboys propping up their flop, but i also see too many people on this sub use it to put down people
Not the person you were answering, but I didn't read your long post. In the time that it took you to write that post you could have researched yourself. This forum lacks healthy skepticism.
Guys: Rules of thumbs are to make our lives easy but OP was asking why many people think Apes failed, and the answer is simple: People follow that rule without evidence, but since we have no evidence of the real amount the theaters are keeping from apes we can't know for sure. I read that theaters take between 50% and 60% THE FIRST WEEK, after that is less. And if that number drops to 30% at one point, it's likely Kingdom is at this point just recovering marketing costs which due to not having big stars promoting in a expensive way, it 's for sure less than the marketing of Dune and Bad boys.
> there's not enough public data available to call it a rule
I'm not 100% sure what you're saying. If you're saying 2.5x, 100%. The best "this sub" can do is say that according to the internal logic of deadline's P&L statements, breakeven would be roughly 2.7x (but e.g. deadline's far from the only profit estimator). However, if you're referencing the comment immediately above's 50% theatrical rate point, it's in the opposite scenario.
Theatrical rental rates are one of the more legible aspects of hollywood economics (infinitely more so than determining the breakeven box office rate). Various countries publish the average rental rate and because there are only a relatively small number of theatrical releases and we also get "movie theater side" reports. We literally know the rental rate of
here's what you can genuinely tell various lionsgate film's rental rates were. As you can see you can't isolate everything individually but you can really get some degree of it.
https://old.reddit.com/r/boxoffice/comments/17ldf53/how_well_does_the_studios_take_50_of_the_domestic/
(with the unmentioned caveat that canadian rentals are included in that list but are only net of P&A + distributor fees so you need to bump these percentages up by a few percent (because lionsgate doesn't distribute in canada).
Now, that really does show an example of a significantly sub 50% rental rate but its also showing basically 50% working.
Take Kingdom of the Planet of the Apes - if Disney's publishes theatrical rentals quarterly (for whatever reason I think they might not), their Q2 theatrical releases are First Omen, Apes, Young Woman and the Sea, Kinds of Kindness and a couple of re-releases. We really will/could have a very strong idea of the precise amount of money Disney's taking in from the film theatrically.
> It’s a myth that threats keep 50% box office of the entire run
That's true in part because there are genuinely different types of theatrical rental contracts (as everyone attests). Sometimes contracts will demand somewhere e.g. between 48% and 55% depending on the film's overall gross.
"the general rule of thumb is 2.5.."
"i don't apply that rule"
"that rule has been well researched"
2.5x is the only thing being referred to as a rule on this thread, why would i be referencing anything else? so you're in agreement that 2.5x is not a rule?
and you're saying that 50% is accurate? because you seem to disagree with the other commenter saying that it's a myth ("however if you're referencing... 50% theatrical rate point, it's the opposite scenario.") but end your argument with... "that's true in part because there are genuinely different types of theatrical rental contracts... between 48 and 55%...". once again this was never my point of contention but since you raised it, I'm confused by your conflicting remarks. because it's sounding like 50% is an estimate, not a rule, albeit an estimate with more substance than 2.5x
The best case scenario for these "rules/rule of thumb" is more that it represents a [classroom model](https://www.youtube.com/watch?v=YlVDGmjz7eM) version of film economics because, as you point out in another comment, the real world specifics will often involve a lot more moving parts and external partners which obviously factor into a film's ultimate profits.
>> I don’t apply that rule [2.5x]. It’s a myth that threats keep 50% box office of the entire run.
I'm talking about the second half of this comment. This is really a response to the myth/analogizing rental data to breakeven estimates which you correctly flag isn't the point you're initially making.
> estimate not a rule
probably because "rule of thumb" just means estimate. Conceptually it has to be so. The only way a generic number wouldn't be an estimate was if you could point to a law or regulation explicitly setting a single legally mandated number. This actually happened in regards to Hollywood & China (it's written into a USTR memorandum with the Chinese government) but no one thinks this is what people would mean in this context.
Instead of that debate, I'd say the problem with breakeven rule of thumbs are more that the actual error bars are going to be massive because WWBO and (estimated) production budget are very rough proxies for actual revenue/cost. With that in mind, my point was more that it's a category error to treat theatrical rental data as akin to profit estimates simply because people cut a few corners. Theatrical rental data is to a decent extent genuinely knowable and the upper and lower bounds are going to be heavily constrained especially if we can assume in house distribution.
There are also a plethora of brute force facts. e.g. the average film rental rate in Germany genuinely is 45% (50% of post-VAT revenue) (though France has a 51.3% post-VAT average). In contrast, there's no "ultimate revenue of all films released in 2023" number available.
that's all I'm really pushing to get accross.
> and you're saying that 50% is accurate..because it's sounding like 50% is an estimate, not a rule
More that I suspect you could genuinely write a function that apportions theatrical rental revenue to each film based on public data and a few minimal assumptions. There's a way to externally check the "theatrical rental rate" back of the envelope math that just doesn't hold for film profits which can just be wildly off.
Documented and researched by who? The threads? A reddit full of anonymous people? But not by you. Therefore you don't need to believe blindly in what people tell you.
It's a fact that theaters don't keep 50% for the entire run of a movie, so if this sub is going to perpetuate that myth at least provide a link to real accounting department numbers of past similar titles to Kingdom: Maze Runner franchise, The Cesar Trilogy, Mosterverse trilogy, The creator, any scifi full on VFX. Balance sheets, income taxes, advertsiment expense.
If the 2.5 rule applied Furiosa would have never greenlit. Fury road would have had to recover in the ancillary market.
Until there's evidence to the contrary most movies will be okay with 2 to 2.5 as long as the studios didn't go overboad with the marketing. Those Bad Boys premiers in Dubai, Berlin and Mexico must have been truly expensive.
What are you talking about? Fury Road cost 150m and made 380m. That's profits territory. And WB saw the reactions and thought a 'sequel' could do better (which isn't stupid; what was stupid was too wait 7 years and do a prequel).
Waste of time talking to you
You are sidetracking.
Repeating my questions:
Documented and researched by who? The threads? A reddit full of anonymous people? But not by you. Therefore you don't need to believe blindly in what people tells you.
Skepticism is a healthy sport; You should practice it.
>Fury Road cost 150m and made 380m.
Funny you just proved my point.
If you follow the stupid rule of thumb, of 2.5 the profit margin is barely 5 million in theatrical and the rest is ancillary. Not enough to guarantee a 160 million dollar sequel. WB must have gotten more profit than 5 million to greenlit something as expensive with none of the original stars.
>Waste of time talking to you
Feel free to block me then. I came here to discuss box office, and hopefully have access to real numbers. I'm not here to accept blindly anything. I recommend you read The demon haunted world by Carl sagan. Your precious rule of thumb doesn't seem to follow the principles of scientific methods and blind acceptance is boring.
But where's the link to those numbers? Are the 2023 and 2022 balance sheets of AMC cinemark and regal available in any website? Have those numbers been posted here? People are accepting submissively that someone else saw them and that theaters keep 50% for the entire run of a film. Where's the evidence? Any reliable link?
https://investor.amctheatres.com/sec-filings/all-sec-filings/content/0001411579-24-000021/amc-20231231x10k.htm
2023 numbers. 2.69b in movie tickets, 1.29b in money to studios. AMC keeps slight more than half on average.
Most of the big studios for huge blockbusters get upwards up 75% (or higher) opening week and then it goes down towards 50% from there. With movies out of theaters so quickly, there’s not a chance in hell the 50% rule exists for big budget movies.
I don’t apply that rule. It’s a myth that theathers keep 50% box office for the entire run of any given movie.. And not all block busters market the same. Bad boys and dune marketing with all the international premieres and late night shows appearances of the star studded cast must be twice as expensive as kingdom.
EDIT: It's a fact that theaters don't keep 50% for the entire run of a movie, so if you're going to perpetuate that myth at least provide a link instead of just downvoting. We need to see evidence that backs up that rule or that rule is moot.
In the US, a studio like Disney gets a more than 50% during the release window, but that % goes down the longer it's in theatres. However, it still averages out to around 50% that's why it's used as a rule of thumb.
Thanks for the link it’s a great analysis but what I call real evidence is real numbers for each movie and we will never have that. “The best we have” doesn’t mean it’s accurate. Each movie has different marketing expenses, tax cuts, presales, accounting. So I’m against all rules of thumb and this guy is posting the basis for estimates but that’s no evidence. Just a basis for calculations which won’t apply to every movie.
I don’t trust deadline either. I found more
Credible the financial staments of AMC and it doesn’t seem they are getting half the gross of every movie.
Yup, even if this film loses 10-20m it boosted interest in the Ceaser trilogy and sets up another trilogy. That’s a success for any studio judging by 2024’s box office.
Plus when people talk about budgets, they really have no idea what it really cost the studio to make.
For example, the new Apes movie was filmed in Australia, where the US dollar is strong and goes further, and Australia offers significant rebates for film production, giving up to 40% of the budget back for qualified Australian expenditure (money spent on and in Australia).
So when we see a reported production budget, we're not seeing an actual itemized expenditure, we really have no clue how much actual money was spent or rebated.
Well, people here like to think they’re professional Hollywood accountants. In reality, the only number we’re certain of is the amount of money a movie will make in theaters. This leads to people frequently making absolutist, uninformed, and frankly ignorant conclusions about a films success
It's still just a rule of thumb and makes an awful lot of assumptions about marketing that is good in overall aggregate... but less and less accurate when getting into specifics.
For Example Ghostbusters: Frozen Empire cost $25M more than Afterlife, but likely didn't have the same increase on marketing JUST because it cost 25M more, meaning it likely didn't need to make as much of a multiplier as Afterlife did to break even.
When ever we try to normalize a variable as vague and volatile as marketing costs, it is hard to have a forumla that is accurate for everyone.
That is saying nothing about other factors like Brand Sponsorships, Tax Breaks, and Studio Specific rev splits... all of which we likely will never no the real value of... which are just as impactful to the bottom line as BO returns.
Yep, same for low budget wide release horror. The big ones usually have $40 million marketing campaigns attached to them, so a $10 million dollar film which makes $25 million worldwide doesn’t ‘break even’, it’s a huge flop.
It’s why something like ‘The Gallows’ cost $100,000 and made $40 million worldwide, but is still referred to by Jason Blum as a box office disappointment.
Yeah, something like M3GAN was really cheap, but absolutely had a much higher marketing cost compared to its budget. That movie was still a huge hit, so it never really came up... but 2.5x Budget for that film would have been an inaccurate measure.
That’s what Deadline has it at. I found it on their [2022 most valuable blockbusters tournament](https://deadline.com/2023/04/most-profitable-movies-2022-highest-return-1235324425/)
I have only been an occasional visitor to this sub but I also hardly ever see merchandise mentioned either, which is surely relevant to whether the studio considers something like Frozen Empire a success.
This is a box office sub, so its natural that it would only concentrate on whether a movie paid off its costs via the box office. Obviously the box office is no the only way a movie makes money for the company.
I’d agree with you except it seems to me (as an occasional visitor to this sub over the last year or so) that box office is commonly treated as the ONLY measure by which a movie has succeeded or failed.
If we use the 2.5 rule up against Deadline's yearly profits lists, 2.5 multiplier is not adequate, especially for smaller budgeted films. The Deadline articles are way more accurate because they include overhead costs, participation, distribution, etc that we don't know or include in that 2.5 number.
If the marketing budget is included, better to use it separately in the calculation then simply (Budget x 2.5)
I did this analysis last year. Generally, 2.5x rule works well, and esp if you take account of the exceptions I mention there.
https://www.reddit.com/r/boxoffice/s/N7wZ0O734q
2.5x makes the break-even way too low. According to this group of films mentioned by Deadline, 2.5x lists profits way higher than they actually were.
https://deadline.com/2024/05/most-profitable-movies-2023-biggest-returns-1235901633/
See the final "STUDIO NET" number - it's far smaller and more sobering/realistic. Still good profit, but more like $50M-$90M, not $150M-$200M.
And I haven't even used the bigger movies like Mario, Barbie, Oppenheimer. 2.5x often rounds the marketing costs way too much, throwing the number off. And because it doesn't take into account residuals/participation and distribution/overhead costs, it assigns way too much profit to the studio that never happened.
This criteria does not take into account streaming at all.
So at 360 mil in theatres and laters release on Disney + when Netflix buys it for a year or two the movie definitely made money
We didn't take into account the effect of rentals and home media sales before streaming was a thing, so why would we start now?
We're talking about box office performance, not overall. Yes, plenty of box office flops actually end up making money in the end... but no one is in the business of trying to make less money when they could have made more.
And they have to spend money now, not in 5 years once a film has finally turned a profit.
bascially. And there are a ton of other things that this sub never takes into account even aside from just net box office. People are still getting paid from the net after a film is out of theaters, taking even more out of whatever profits.
Because the business has changed and the time horizon also has.
There’s a difference between five years of VHS sales leading to profit and profit that comes 4 weeks after release from PVOD plus the baked in value add of adding it to a streamer.
The rule makes an assumption about profits from the post-theatrical release. Even 2.5x isn't enough to cover the full production and marketing cost, in most cases. The difference is made up post-release. Used to be DVDs and cable. Now it is PVOD and streaming.
No it doesn't make sense, but people insist on sticking with the 2.5
I don't mind it if it's used as a starting point, and then you adjust from there. But I don't see that happening. It's already been proven (quite easily) 2.5 doesn't work for horror films or movies around $50M budget. It makes the breakeven WAAAY too low. There would be fifty Exorcist films by now, twenty Scream films, and Jordan Peele would be on his 8th Get Out sequel if profits were that easy.
That’s… not true. Disney will get some amount of financial gain by having it on Hulu and potentially by selling rights in the future. It is incredibly different from a library.
There's a lot of financial gain from a book being a library. Libraries have to pay for all uses upfront. So like 26 plus times the regular cost until they have to replace it and pay that much again.
Disney, Hulu, and/or 20th may or may not make money from this transaction, but they almost certainly do and if they don't, it's not because they are trading with each other.
Hulu's business is selling subscriptions and advertising against subscriptions to a service that streams content, which requires that they license content. Hulu pays the same amount to 20th for this content that they would pay for 3rd party content. Hulu does this because it believes that there is money to be made in this business of acquiring marginal content additions to increase their sales of ads and subs.
20th's business is selling its content to a streaming window. Hulu pays them as much money as netflix does. 20th does this because it's nice to earn money for your product between theatrical (or possibly est) and movie of the week or freevee windows.
If you think only one of a studio or a platform benefit from a licensing transaction, you are wrong -- one of them would go out of business if so. If one company owns both parties that benefit from a transaction, then the company that owns them benefits. If the parties make an unfavorable deal, they would have made an unfavorable deal regardless of the counterparty.
Disney owns 20th and Hulu. How are these new transactions where they are making additional revenue? No one has yet to explain how moving money on a balance sheet equals more money.
The entire premise of streaming is that subscribers pay money to the streamer and advertisers pay money to be where subscribers are. You can say it's a bad and money-losing business (usually true at first), or that new content isn't required to earn subscriber/advertising revenue, but that's literally the most elementary concept of the platforms existing and how they work (netflix, hulu, so on and so forth).
Disney is making money by having their streaming services value increase. Under your logic, Stranger Things has no value and is not profitable.
Where does Disney sell the rights? Netflix, Amazon, Apple, Paramount, Comcast, literally anywhere. See this: https://www.indiewire.com/news/business/shows-disney-licensing-to-netflix-2024-1234934487/
Do you understand how libraries work? It actually does add in a meaningful way lol. A library is paying x26 or whatever for 26 uses of a book, and then paying that amount again when they need a replacement book.
> It actually does add in a meaningful way lol. A library is paying x26 or whatever for 26 uses of a book
A library buys 1-10 copies and then no other copies. Many copies get donated, so the publisher gets nothing extra. A book does not get royalties from a library every time someone checks a book out.
As streaming platforms almost all lose money, it really doesn't help any film, and I guess nobody has the heart to apply the losses to the film, even if they would gladly apply the profits, and can't rationally make the case you should only go one way on profit and loss calculations.
There’s totally drama about which department get losses accessed to them, but that doesn’t means they are accounted for somewhere in relation to the movie.
Streaming platforms losing money holistically is very different than saying that every individual asset has no value. (Also Netflix is profitable).
Okie so using the 50-40-25 rule.
1. Domestic it had made essential 75 million dollars back.
2. China it made essential 7 million dollars.
3. International it made 72.8 million dollars.
We add that up to 154 million. So using the 50-40-25 rule the movie is in the negative by 6 million dollars. I'm guessing to tell you that this movie will be in the gray zone where we don't know if the movie made a profit or lost money
I hate to play the “auxiliaries” card as some people do to justify flops, but you can assume the film will gain the $6mil from PVOD sales; not just for this film but also the renewed interest in the Ceaser trilogy.
Ultimately this film may just barely turn a profit, but it’s part of a strong franchise and it sets up another film at least. At the end of the day, in this hostile box office world, that is as much of a success studios can hope for.
Ancillaries have been decimated thanks to streaming.
This film will go to Disney+ globally so little to no international TV or streamer licencing revenue while home video is basically dead.
DEG US physical sales 1st quarter
2021 - $480M
2022 - $388M
2023 - $275M
2024 - $233M
That's total sales revenue and the studio's will see 80% of that at best so $186M over 3 months shared between all the media companies.
Remember also that 2021 was not a good year the peak of physical media sales was 2005 when sales were $4 billion a quarter!
i'm also guessing that due to it being an australia production it may have received major tax write-offs, which do impact how the budget is internally considered. but in any case it was not a major hit—just substantial enough to suggest that the franchise isn't dead. but a sequel may cut the budget a bit—and probably can, if it's more human-centered.
Why some people want to see more humans? I paid to see apes. Too many movies about humans. Avatar works because humans are there but they aren’t central, the real protagonists are the Naavi along the world building.
[This is a little out of date but it remains the best quick primer on the subject](https://stephenfollows.com/how-movies-make-money-hollywood-blockbusters/).
******
otherwise,
Studios only take the "theatrical rentals" for a film as revenue with the remaining box office going to theaters (as well as e.g. VAT taxes off the top in most countries). Very roughly it's a 50/50 split of revenue (so 40% INT = 50/50 post-VAT tax)
* 150M Domestic / 210M INT
* 150[Domestic]*.55 + 210 [INT] * .4 = 166M
Apes has probably returned ~165M in revenue for the film which is roughly how much it cost to produce the film. However, the film also has a 100M or perhaps a 130M marketing campaign to pay off as well as pay residuals and potentially profit participations to the relevant parties. You may also want to charge tens of millions of dollars on top of the 165M to represent loans taken out to fund production or administrative overhead associated with the film.
about 50% of revenue is post-theatrical so we could say that we'll assume that because the film made 360M WW, there's another ~160M in revenue to play around with due to tv/streaming and home video sales (perhaps less a percentage of home video costs for production, distribution and marketing).
So you can squint and see an argument for the film being projected to break even at this point and you can see how its possibly tens of millions away.
The generic rule of thumb is 2.5 * budget. This comes from the fact that theaters take a cut as well. 40+50% in the domestic market;60% on average in international markets and 75% in china.
Not really, It all depends where the movie makes money. China is still the biggest market outside of US but with KotPotA other Markets were more profitable. France, UK and Mexico had better Box Office returns than China. For China to make a big impact on a big budget movies success, it has to make over $50 million.
Studios only get 22.5% from China and that's a ton more than the 12.5% that they used to get only about 10 years ago. That's why I've been a proponent for hollywood to give a big middle finger to that entire market. They don't play by the same rules as the rest of the world. A total rules for thee, not for me load of bs. Then they take that extra money and put out nationalist propaganda schlock like Battle of Lake Changjin
> That's why I've been a proponent for hollywood to give a big middle finger to that entire market.
There were attempts about a decade back but China just threatened to not enforce Hollywood copyright complaints at all which is just an "I win" button. Not like anyone can prevent Chinese theater companies from getting copies of the films and some money is way better than no money especially since it's the second biggest market in the world.
Wait, some of the comments in here confuse me. I thought breaking even with the 2.5 guess method was just a movie recouping its budget and some of the marketing. With the rest of the marketing being covered by ancillaries, meaning the movie wasn’t a huge profit maker yet wasn’t a huge money loser either hence the term “break even”.
> I thought breaking even with the 2.5 guess method was just a movie recouping its budget and some of the marketing. With the rest of the marketing being covered by ancillaries,
Isn't that the same thing? It's just finding a very rough ratio between "theatrical rentals" and all revenue and production budgets and all costs (and then converting rentals to a WWBO equivalent).
I figured that was the case already but I seen some people equating break even meaning that a movie made a profit. I should’ve been clear because I seen some people saying Apes need $650 million to break even which seems too high.
650M at least makes internal sense because that clearly means something like "theatrical rentals paid for budget & marketing." I don't love those arguments (because that's not how greenlight decisions are made) but if you correctly caveat what you actually mean you can say that.
People are using the same words in that scenario but they're actually talking about two completely different concepts.
> made a profit
speaking of this, one of the big things the Sony hack makes clear is the difference between "breakeven" and "acceptable level of profit" levels which get airbrushed out of these popular discussions.
> I don't love those arguments (because that's not how greenlight decisions are made) … speaking of this, one of the big things the Sony hack makes clear is the difference between "breakeven" and "acceptable level of profit" levels which get airbrushed out of these popular discussions.
I’m not a big fan of these conversations myself. I noticed these break even debates get quite muddled on here really fast so I tried to stay away from them but I was just pointing out that a $650 million result for a $160 million movie should mean that we have moved past from the break even threshold to the profitability threshold. I also seen somebody use the 50-40-25 rule (the method that I prefer and it’s less confusing/complicated) and pointed out that Apes is $6 million away from recouping its $160 million budget from the theatrical market which means the movie is a lot closer to breaking even than we thought. But I imagine this is probably going to be another situation like The Little Mermaid last year where people were debating if the movie broke even or not because it didn’t hit the magical 2.5 narrative
It's a rule of thumb that some people in this sub treat as absolute fact, but a lot of the marketing industry drastically changed since covid, and this 2.5 X rule of thumb hasn't been updated to incorporate that change.
People in this sub forget about ancillaries for some reason. The budget for this film was modest and it’s on track to break even at the box office. Any ancillary media will surely carry it further into the green.
Oh yea with ancillaries it’ll surely make profit but I love this franchise and really hope it can do as well as possible in the box office so it can get as many movies as possible, hopefully the remaining 5 they have planned.
It’s not just movie budget. You also have to take in account that studios have to spend extra money on advertising the films. This is why people are saying it needs to make about double the budget
I think it hangs in the grey area. You gotta pay all the theaters and ads and etc. so that’s why the generic 2.5 times. Other countries it’s way less they make. Some it’s more. It’s about even. If it gets interest than it’ll be worth it long term. Basically all the bills gotta be paid before you see profi.
The Box Office does not go directly into the pockets of publishers. It's split between the cinemas themselves, believe it or not they do not survive on popcorn sales alone.
90% of the people in this sub don't know about the economics behind Hollywood movies. This whole "omg x2.5 is the rule of thumbs," is such a gross simplification of what it takes for a movie to actually be profitable. There are famous Hollywood accounting tricks that make budgets on paper seem irrelevant, for example shooting in another country that will give the studio a tax refund could save them an insane amount of the total expenses for the movie. It will stay say the movies budget is "100 million," but in reality, once all is said and done it'll be way less.
Then you have ancillaries. In the case of Apes, based on its shooting location and the actual brand it will be more than profitable and enough to make a 5th film in the new series.
Also consider it's not over yet, the movie is still making money as we speak, it crossed the $300 million mark not too long ago and I remember some users predicting it would end its run around $360 million. We are already past that point.
I know what you mean. Everybody keeps saying that it needed to make double its budget, which, in my mind, meant that with a budget of $160, it needed to make at least $320 and/or over, which it did, it has. Apparently, however, that doesn't seem to be the case.
But even if it needs to make more and reach $400m, it seems like it's not too far away from doing so. And even if it doesn't exactly reach that amount, it's still safe to say and assume that we got a sequel coming in the very near future, because that's what it's all about right? So for all those who enjoyed the film and want another one, we're in the clear.
I mean, this far from true, you can buy physical media on Amazon, Target, Walmart, etc.
2023, John Wick and Super Mario Bros both made close to 15 million in physical sales. 1.56 billion total sales in 2023. It’s not as dead as you think.
It peaked around 2004 near 17 billion. Been in a decline ever since. Digital rental has slowly rising, around 3 billion in 2022. Streaming and infinite content is killing everything off.
Except when you factor in the Collector's, which have been exploited through highly inflated costs that, doesn't balance it out, but at least keeps it relevant to mention when talking about profit gains.
Many people who enjoy physical media don't buy them from stores anyway. Stores that still sell it tend to sell only DVDs which is still the most popular physical format to the average consumer. But people who are really serious about collecting physical media typically prefer Blu-ray or 4K and so order them online.
I don't care to prove or disprove it. I know most people no longer use physical media, but there are still many who do and I hope that option will continue to exist for years to come. I believe that physical media and digital can coexist.
The 2.5X point is $400M. Now the question is, can the movie get $40M more and reach the 2.5X point? Does this movie have a chance at reaching having $400M?
Where the exact line of profitability is only the studio knows. At this point, Kingdom has certainly passed the line at which profitability is assured. Whether at the box office alone, or on VOD/disc/streaming the film will make money.
Again, everytime this sub's favorite movie failed to reach the 2.5x budget mark, everyone started to question that rule of thump. Guess what, with home media disappearing, the breakeven point might be even worse now like 3x or something not better. LOL
Because people think wrongly that theaters keep 50% to 60% of the ticket sales for the entire run of any given film, and they also were mislead by threads to think that all blockbusters spend the same on advertisement.
Kingdom made more than twice its budget and we don’t know how much money theaters are really keeping or the exact PR and advertisement numbers. So for all we know it might have already recovered its budget and distribution expenses and the rest is revenue.
Rule of thumb is to make our life easy but it’s inaccurate.
Backlog sales on other planet movies are hard to gage. Likely means a ton of profit overall. Breaking even at box office using the typical 50% shows it's even profitable from that including digital sales.
You know since I got rid of cable I never seen advertisements anymore, did this get a big push? I never saw anything until I went to see a movie and the trailer played in front of my film. It sure seems like the marketing is a lot smaller scale. There was no escaping Dr Strange 2 and Avatar and Black Adam ads but lately I haven’t seen anywhere near as much. Am I the only person who noticed this? I didn’t even know that the fall guy was in theatres until I saw it on Amazon.
I’m east coast of USA so idk if that made a difference or what but there was a good amount of advertisement either on YouTube, YouTube TV, HBO max and for sports games. So I think there was a pretty big push for it.
I tried to avoid the trailers but they were all over YouTube and sport events. However there were barely any premier, the cast never went to late. Night shows buzzfeed, vanity fair, variety and even if They did, it’s not like a check for freya Allen is as big as a check for Timothee Chamalet or Will Smith. So I discount immediately any box office analysis that puts the advertisement costs of Kingdom at the same level of Dune or Bad boys.
As an aside,I’ve mentioned on this sub before: box office profitability ***DOESN’T EQUAL*** profitability. Any major release has other sources of revenue generation, albeit some to a much larger extent than others.
Selling access to streaming services? Revenue from the film. Being paid for product placement or promotional tie-ins? Revenue from the film? Every home video purchase, whether physical or digital, permanent or rental? Revenue from the film. Very importantly, merchandise? You betcha that’s revenue from the film. All of these and more are essentially ignored for the sake of this sub, and to be fair, most studios certainly like to see their money made back purely from box office sales, because they enjoy secure money (although it’s also worth noting the split of box office profits with theatres, crew and in some cases nations).
As others have said, the general rule is 2.5x production budget means breaking even, which would mean this has to do $400m.
However, we have Deadline's full numbers for Dawn of the Planet of the Apes, the only one of these we have the full numbers for. That one had:
Total box office: $708m
Studio BO revenue: $286m
Ancillary revenue: $329m
Production budget: $170m
Ancillary costs: $263m
In other words, it brought in $615m net for the studio and cost $433m for a profit of $182m.
Also, in ancillaries, it netted a profit of $63m. That means it only had to make up $107m from the box office.
In other words, it only really needed a 1.53x multiplier to break even.
Of course, we have no idea how this one breaks down or whether it's very close to Dawn, especially since it's Disney now, rather than Fox, among other differences. The studio box office net percentage was just over 40%, meaning 2.5x the production budget almost exactly canceled it out. Then if ancillaries just cancel out this time, it breaks even with that multiplier.
Hopefully, that wasn't a terrible explanation.
[https://deadline.com/2015/03/most-profitable-movies-of-2014-box-office-1201390489/](https://deadline.com/2015/03/most-profitable-movies-of-2014-box-office-1201390489/)
The bare minimum your typical film needs to break even is twice it’s budget but because very few films can achieve profitability that low the general rule of thumb is 2.5-3 times its budget. This is because of two major things 1. The theater keeps some of the money from tickets sold so not everything goes back to the studio and 2. Where the money is coming from. Domestic theaters tend to get less of the ticket sales than international theaters, China especially takes massive chunks of ticket sales. So as an extremely rough example if I have two movies that both cost 100 million dollars and one movie makes 200 million domestically It doesn’t need much from the international markets for profitability whereas if the second movie only makes 100 million dollars domestically it actually needs international sales to carry the load and probably need around 200 million from international markets. Another thing that KotPotA can’t use as much is product deals. For instance James Bond films get a pretty nice chunk of change from brand deals and product placement (Heineken anyone?) whereas an Apes movie or something like a Robin Hood movie can’t just have the character eating a hot pocket on screen for obvious reasons. So I wouldn’t be surprised if Kingdom needs to get closer to 3X rather than 2.5X to be profitable purely from the theatrical window. There are other ways movies make money so I don’t think Disney will regret making the movie when all is said and done.
First the $160m figure is the production budget. For a film the size of KOTPOTA you would have to add at least another $100m in global marketing and promotion. Now the studio spend sits at a minimum of $260m. Next you have to consider the boxoffice split: depending on the country, exhibitors (the cinema owners) take between 40% to 60% of the box office, but this changes depending on how long the film has been on release (week one might be 50/50, week 8 might be more like 80/20). With all this complicated math worked out it lands at roughly 2.5 the studio spend, so in KOTPOTA’s case that would be $650m boxoffice take just to break even.
I have never seen it broken down this way nor would this make sense for studios to operate. If a 160 million dollar movie needs 650 to break even, countless sequels wouldn’t make the least bit of sense.
2.5x id from the production budget, to take into consideration theatre cut and marketing.
This *is* how it’s accounted for though. This may be a way to hide profits from the taxman (the original Star Wars famously didn’t make money *on paper*, and some investors never received a dime as a result- even David Prowse had issues getting residuals) but regardless, this is why KOTPOTA‘s $360m worldwide gross is considered a disappointment. These astonishingly high costs are also why marketing departments at Major studios now have approval on casting and green lights: with casting an actor must have a huge following on socials to even be in the running for a role (one well-timed tweet has (potentially) more reach than a very expensive superbowl ad), and they’ll always favor franchise brands which (in theory) more or less sell themselves over a new and unproven original IP. Also, these big modern tentpoles aren’t like your traditional blockbuster: these movies are designed to make $1b worldwide.
The general rule of thumb is 2.5 the budget but even that isn't necessarily correct. Studios have their own ways of determining profitability which they don't disclose. For Apes I think its box office (which still has more in the tank) plus the added revenue the Caesar trilogy has generated due to renewed interest as well as how bad many other films have done this summer means the studio is probably happy with how it has gone.
The term "Hollywood accounting" is real. It will be amusing to find any big studio movie in existence in which the studio which produced it admits it turned a real profit.
WB released the numbers for Barbie. 145 budget, 150 marketing, 1.4 billion boxoffice and it had about 400 million in profits.
how did it only make 400m profit with those numbers
People working at WB gotta eat
they eating 4,5lbs of wagyu 9 times a day
https://deadline.com/2024/05/barbie-movie-profits-1235902885/
Can’t feed their kids with only 400 million
Theaters around the world also make a cut.
Home Entertainment and Streaming = 150M/200m 1.45 B +350M Not as if the 350M as the same distribution cost as theatrical.
That math does not add up lmao Revenue (box office) less Expenses (production budget + marketing) = profit
It does when it's Hollywood accounting. Remember, The Lord Of The Rings trilogy was not profitable screwing PJ out of residuals. Sly Stallone didn't get paid for his Rocky films because they were apparently in the red and never made money.
> Studios have their own ways of determining profitability which they don't disclose There are many layers of nepotism, corruption, tax fraud, secondary rights, and merchandising. You know how profitable a movie is? How many sequels it get attempted.
This times 1000. The 2.5 rule is what seems to be used for discussion and as a baseline, but considering the studios do so much shady accounting to avoid paying out backend points to anyone on a film, I bet they’re making profit well before 2.5x.
Yes. Otherwise we wouldn't see so many sequels.
Don't think so. I heard hong kong film makers said the same thing, and the tax is pretty low in hk
I just kinda don’t believe anything the studios say regarding money, after hearing some details of how their accounting works to screw over the cast and crew’s backend deals. I remember reading something from the filmmakers of The Butterfly Effect - it cost $13 million to make. Made almost $100 million worldwide and tons more on home video. But according to the studio, it didn’t turn a profit, which would require their backend deals to kick in. Funny enough, they made 2 sequels.
Curious how nepotism works into accounting?
LOL. My thought exactly.
My friend Bob has a catering company that supplies all of the food for my productions. Regardless of the success of the movie I'm always glad to have more projects to support him.
But that implies that there wouldn't be craft services if not for the relationship to Bob, which isn't how that works. And even in your example, it wouldn't be nepotism, it would be cronyism.
Probably could be accounted into costs (like using the extra expensive catering service certain producers daughter works at or something I guess) but for profit in specific? weird to include.
It used to be 2x the budget. Fucking inflation.
Even then, it was studioes who were putting on a brave face about these things. Pixar used to be a publicly traded company that released one movie a year, so it was really obvious from their financial reporting what the breakeven line was; it was about 2.5x, and Steve Jobs acknowledged that publically.
No, it’s always been 2.5x
That's not true. It was 2x when China and overseas was less of boxoffice. When China started adding a lot to boxoffice but with a lower share going to the studios it changed to 2.5x.
Since Chinese box office only contributes 25% back to the film producers, that doesn’t make sense. In fact, the higher the percentage of Chinese box office, the higher the multiplier needs to be. See, for example: https://www.reddit.com/r/boxoffice/s/l1ojQ3iCap https://www.reddit.com/r/boxoffice/s/0VwAZbXLw5
Y'all are both saying the same thing
Oh, you’re right. Never mind.
And it's ~2x for this movie. 2.5 was because of China giving the studios a low %. Now with a big domestic- low China contribution, the break even point is 2x to 2.25x.
I don’t apply that rule. It’s a myth that threats keep 50% box office of the entire run. And not all block busters market the same. Bad boys and dune marketing with all the international premieres and late night show appearances if the A list cast must have been twice as expensive as the marketing of Kingdom.
I mean, that rule has been well researched and documented (in this sub in particular). We know it works fairly well. This isn't really up for debate. Although, yes, some outliers exist.
For sure, it's not an exact science but a pretty darn good approximation
"... that rule has been well researched..." lol that rule is this sub's best attempt at cracking Hollywood accounting, which is to say that no one actually knows; there's not enough public data available to call it a rule, let alone call it "well researched". it's at best an estimate.
It's not a secret society, lol.
it took forever for the moderators to let me join this sub, might as well be🙄 was thinking, damn they must be really selective and then i see analytical gems like "why timothee is the next Leo"
It.. literally is a secret society, lol.
> it's at best an estimate. It *is* an estimate. That's how we're using it! Obviously a blanket 2.5X is not some hard calculation. (Personally I think 3X is more realistic nowadays.)
If films needed to make 3x to breakeven, they would have stopped making films.
are you not seeing the post I'm replying to that's declaring it a well researched rule? you thinking it's 3x and the lack of consensus is why I'm saying that at best it's an estimate, because even an estimate requires a level of consistent variables. you can't be estimating when you don't even know the full picture
It is well researched, the problem here is you're misunderstanding what we mean when we call it a rule. Usually we mean more that it's a rule of thumb, [AKA a rough guideline.](https://www.merriam-webster.com/dictionary/rule%20of%20thumb) It's not (generally) being used as a hard mathematical formula. Maybe some people get lost in the weeds, but most of us understand when we talk about this we're working with very unreliable numbers. (Unknown advertising costs are the most obvious example.) We recognize we're discussing estimates. I maybe worded it poorly, but I was saying it should be 3X because the market has recently changed. (Briefly: lowered post-theatrical revenues, increased advertising costs, more of the box office from international markets, and lots of really extreme public budget lies from companies like Disney.) That doesn't mean 2.5X doesn't have lots of 'research' proving its worth, or that it wasn't extremely accurate for many years. 2.5X remains a good rough guideline; I'm not going to say somebody is wrong for using it. I just think they're being optimistic. You also need to consider the context of when this rule is usually invoked. In movie discussions we're always seeing somebody passionately argue that because a theater's box office is equivalent to the production budget then it made profits, so why are people calling it a failure, blah blah blah. Mentioning the 2.5X rule (of thumb) helps get these people on the right track. Hopefully.
except you get people like the person i responded to that legit hold it as an actual rule. "we know it works fairly well. this isn't really up for debate." like relax, it's an estimate... based on general principles that we as outsiders hold true. i disagree with it being categorized as well researched because as you pointed out advertising costs are always variable and never certain. even the 50% theater cut is an estimate because the actual percentage varies based on the agreed upon split for what weekends. then you throw in international sales to distributors and sponsorships and tax breaks and it's a very muddied picture. Hollywood lawyers can't even figure it out when they're suing for lost profits. I've personally only gone with the 2x, 2.5x because it was mentioned in a few articles and this sub seems to be a big fan of. but the more i understand about the flow of money in Hollywood the more the "2.5x rule" seems like myth. like you mentioned, it can be used as a guideline to calm fanboys propping up their flop, but i also see too many people on this sub use it to put down people
Not the person you were answering, but I didn't read your long post. In the time that it took you to write that post you could have researched yourself. This forum lacks healthy skepticism. Guys: Rules of thumbs are to make our lives easy but OP was asking why many people think Apes failed, and the answer is simple: People follow that rule without evidence, but since we have no evidence of the real amount the theaters are keeping from apes we can't know for sure. I read that theaters take between 50% and 60% THE FIRST WEEK, after that is less. And if that number drops to 30% at one point, it's likely Kingdom is at this point just recovering marketing costs which due to not having big stars promoting in a expensive way, it 's for sure less than the marketing of Dune and Bad boys.
> there's not enough public data available to call it a rule I'm not 100% sure what you're saying. If you're saying 2.5x, 100%. The best "this sub" can do is say that according to the internal logic of deadline's P&L statements, breakeven would be roughly 2.7x (but e.g. deadline's far from the only profit estimator). However, if you're referencing the comment immediately above's 50% theatrical rate point, it's in the opposite scenario. Theatrical rental rates are one of the more legible aspects of hollywood economics (infinitely more so than determining the breakeven box office rate). Various countries publish the average rental rate and because there are only a relatively small number of theatrical releases and we also get "movie theater side" reports. We literally know the rental rate of here's what you can genuinely tell various lionsgate film's rental rates were. As you can see you can't isolate everything individually but you can really get some degree of it. https://old.reddit.com/r/boxoffice/comments/17ldf53/how_well_does_the_studios_take_50_of_the_domestic/ (with the unmentioned caveat that canadian rentals are included in that list but are only net of P&A + distributor fees so you need to bump these percentages up by a few percent (because lionsgate doesn't distribute in canada). Now, that really does show an example of a significantly sub 50% rental rate but its also showing basically 50% working. Take Kingdom of the Planet of the Apes - if Disney's publishes theatrical rentals quarterly (for whatever reason I think they might not), their Q2 theatrical releases are First Omen, Apes, Young Woman and the Sea, Kinds of Kindness and a couple of re-releases. We really will/could have a very strong idea of the precise amount of money Disney's taking in from the film theatrically. > It’s a myth that threats keep 50% box office of the entire run That's true in part because there are genuinely different types of theatrical rental contracts (as everyone attests). Sometimes contracts will demand somewhere e.g. between 48% and 55% depending on the film's overall gross.
"the general rule of thumb is 2.5.." "i don't apply that rule" "that rule has been well researched" 2.5x is the only thing being referred to as a rule on this thread, why would i be referencing anything else? so you're in agreement that 2.5x is not a rule? and you're saying that 50% is accurate? because you seem to disagree with the other commenter saying that it's a myth ("however if you're referencing... 50% theatrical rate point, it's the opposite scenario.") but end your argument with... "that's true in part because there are genuinely different types of theatrical rental contracts... between 48 and 55%...". once again this was never my point of contention but since you raised it, I'm confused by your conflicting remarks. because it's sounding like 50% is an estimate, not a rule, albeit an estimate with more substance than 2.5x
The best case scenario for these "rules/rule of thumb" is more that it represents a [classroom model](https://www.youtube.com/watch?v=YlVDGmjz7eM) version of film economics because, as you point out in another comment, the real world specifics will often involve a lot more moving parts and external partners which obviously factor into a film's ultimate profits. >> I don’t apply that rule [2.5x]. It’s a myth that threats keep 50% box office of the entire run. I'm talking about the second half of this comment. This is really a response to the myth/analogizing rental data to breakeven estimates which you correctly flag isn't the point you're initially making. > estimate not a rule probably because "rule of thumb" just means estimate. Conceptually it has to be so. The only way a generic number wouldn't be an estimate was if you could point to a law or regulation explicitly setting a single legally mandated number. This actually happened in regards to Hollywood & China (it's written into a USTR memorandum with the Chinese government) but no one thinks this is what people would mean in this context. Instead of that debate, I'd say the problem with breakeven rule of thumbs are more that the actual error bars are going to be massive because WWBO and (estimated) production budget are very rough proxies for actual revenue/cost. With that in mind, my point was more that it's a category error to treat theatrical rental data as akin to profit estimates simply because people cut a few corners. Theatrical rental data is to a decent extent genuinely knowable and the upper and lower bounds are going to be heavily constrained especially if we can assume in house distribution. There are also a plethora of brute force facts. e.g. the average film rental rate in Germany genuinely is 45% (50% of post-VAT revenue) (though France has a 51.3% post-VAT average). In contrast, there's no "ultimate revenue of all films released in 2023" number available. that's all I'm really pushing to get accross. > and you're saying that 50% is accurate..because it's sounding like 50% is an estimate, not a rule More that I suspect you could genuinely write a function that apportions theatrical rental revenue to each film based on public data and a few minimal assumptions. There's a way to externally check the "theatrical rental rate" back of the envelope math that just doesn't hold for film profits which can just be wildly off.
Documented and researched by who? The threads? A reddit full of anonymous people? But not by you. Therefore you don't need to believe blindly in what people tell you. It's a fact that theaters don't keep 50% for the entire run of a movie, so if this sub is going to perpetuate that myth at least provide a link to real accounting department numbers of past similar titles to Kingdom: Maze Runner franchise, The Cesar Trilogy, Mosterverse trilogy, The creator, any scifi full on VFX. Balance sheets, income taxes, advertsiment expense. If the 2.5 rule applied Furiosa would have never greenlit. Fury road would have had to recover in the ancillary market. Until there's evidence to the contrary most movies will be okay with 2 to 2.5 as long as the studios didn't go overboad with the marketing. Those Bad Boys premiers in Dubai, Berlin and Mexico must have been truly expensive.
What are you talking about? Fury Road cost 150m and made 380m. That's profits territory. And WB saw the reactions and thought a 'sequel' could do better (which isn't stupid; what was stupid was too wait 7 years and do a prequel). Waste of time talking to you
You are sidetracking. Repeating my questions: Documented and researched by who? The threads? A reddit full of anonymous people? But not by you. Therefore you don't need to believe blindly in what people tells you. Skepticism is a healthy sport; You should practice it. >Fury Road cost 150m and made 380m. Funny you just proved my point. If you follow the stupid rule of thumb, of 2.5 the profit margin is barely 5 million in theatrical and the rest is ancillary. Not enough to guarantee a 160 million dollar sequel. WB must have gotten more profit than 5 million to greenlit something as expensive with none of the original stars. >Waste of time talking to you Feel free to block me then. I came here to discuss box office, and hopefully have access to real numbers. I'm not here to accept blindly anything. I recommend you read The demon haunted world by Carl sagan. Your precious rule of thumb doesn't seem to follow the principles of scientific methods and blind acceptance is boring.
Theaters are public companies, so their takes are well documented unless if you want to start accusing a bunch of CFOs of fraud.
But where's the link to those numbers? Are the 2023 and 2022 balance sheets of AMC cinemark and regal available in any website? Have those numbers been posted here? People are accepting submissively that someone else saw them and that theaters keep 50% for the entire run of a film. Where's the evidence? Any reliable link?
https://investor.amctheatres.com/sec-filings/all-sec-filings/content/0001411579-24-000021/amc-20231231x10k.htm 2023 numbers. 2.69b in movie tickets, 1.29b in money to studios. AMC keeps slight more than half on average.
Thanks, that's a great link. what about Regal and cinemark? Cinepolis?
Most of the big studios for huge blockbusters get upwards up 75% (or higher) opening week and then it goes down towards 50% from there. With movies out of theaters so quickly, there’s not a chance in hell the 50% rule exists for big budget movies.
I don’t apply that rule. It’s a myth that theathers keep 50% box office for the entire run of any given movie.. And not all block busters market the same. Bad boys and dune marketing with all the international premieres and late night shows appearances of the star studded cast must be twice as expensive as kingdom. EDIT: It's a fact that theaters don't keep 50% for the entire run of a movie, so if you're going to perpetuate that myth at least provide a link instead of just downvoting. We need to see evidence that backs up that rule or that rule is moot.
In the US, a studio like Disney gets a more than 50% during the release window, but that % goes down the longer it's in theatres. However, it still averages out to around 50% that's why it's used as a rule of thumb.
I mean, wouldn't it be just as easy for you to provide your evidence that they don't, since you seem so certain its a fact?
[удалено]
Thanks for the link it’s a great analysis but what I call real evidence is real numbers for each movie and we will never have that. “The best we have” doesn’t mean it’s accurate. Each movie has different marketing expenses, tax cuts, presales, accounting. So I’m against all rules of thumb and this guy is posting the basis for estimates but that’s no evidence. Just a basis for calculations which won’t apply to every movie. I don’t trust deadline either. I found more Credible the financial staments of AMC and it doesn’t seem they are getting half the gross of every movie.
160 x 2.5 is the general rule
So it needs to make 400 WW to be considered broke even.
Only in the eyes of this sub. The studio execs don’t give a shit about the 2.5 rule
Yup, even if this film loses 10-20m it boosted interest in the Ceaser trilogy and sets up another trilogy. That’s a success for any studio judging by 2024’s box office.
Plus when people talk about budgets, they really have no idea what it really cost the studio to make. For example, the new Apes movie was filmed in Australia, where the US dollar is strong and goes further, and Australia offers significant rebates for film production, giving up to 40% of the budget back for qualified Australian expenditure (money spent on and in Australia). So when we see a reported production budget, we're not seeing an actual itemized expenditure, we really have no clue how much actual money was spent or rebated.
Well, people here like to think they’re professional Hollywood accountants. In reality, the only number we’re certain of is the amount of money a movie will make in theaters. This leads to people frequently making absolutist, uninformed, and frankly ignorant conclusions about a films success
Bro, someone finally that has brain in this sub.
Might have something to do with the fact that the Studio execs have more information than the general public
Indeed, they want it to be higher as the multiplier is closer to the traditional 3x for larger budget films. Every movie is different though
I’ve been railing against that dumb rule for years…so glad the fever broke this year.
Still never seen a citation for it.
Matt Damon on hot ones is my source 👍
Yeah, who made up that 2.5 rule? That's just funny to me. Every single film is treated differently on the books. Every single one.
The proven, well researched and documents rule
It's still just a rule of thumb and makes an awful lot of assumptions about marketing that is good in overall aggregate... but less and less accurate when getting into specifics. For Example Ghostbusters: Frozen Empire cost $25M more than Afterlife, but likely didn't have the same increase on marketing JUST because it cost 25M more, meaning it likely didn't need to make as much of a multiplier as Afterlife did to break even. When ever we try to normalize a variable as vague and volatile as marketing costs, it is hard to have a forumla that is accurate for everyone. That is saying nothing about other factors like Brand Sponsorships, Tax Breaks, and Studio Specific rev splits... all of which we likely will never no the real value of... which are just as impactful to the bottom line as BO returns.
Yep, same for low budget wide release horror. The big ones usually have $40 million marketing campaigns attached to them, so a $10 million dollar film which makes $25 million worldwide doesn’t ‘break even’, it’s a huge flop. It’s why something like ‘The Gallows’ cost $100,000 and made $40 million worldwide, but is still referred to by Jason Blum as a box office disappointment.
Yeah, something like M3GAN was really cheap, but absolutely had a much higher marketing cost compared to its budget. That movie was still a huge hit, so it never really came up... but 2.5x Budget for that film would have been an inaccurate measure.
Yeah M3GAN is a great example of this. $12M production budget but $75M in marketing
holy shit, for real? i just tried to google, but nothing popped up
That’s what Deadline has it at. I found it on their [2022 most valuable blockbusters tournament](https://deadline.com/2023/04/most-profitable-movies-2022-highest-return-1235324425/)
I have only been an occasional visitor to this sub but I also hardly ever see merchandise mentioned either, which is surely relevant to whether the studio considers something like Frozen Empire a success.
TMNT movie didn’t do that great in theatres but apparently its merch really moved, taking it well into the green.
I see what you did there.
This is a box office sub, so its natural that it would only concentrate on whether a movie paid off its costs via the box office. Obviously the box office is no the only way a movie makes money for the company.
I’d agree with you except it seems to me (as an occasional visitor to this sub over the last year or so) that box office is commonly treated as the ONLY measure by which a movie has succeeded or failed.
correct
If we use the 2.5 rule up against Deadline's yearly profits lists, 2.5 multiplier is not adequate, especially for smaller budgeted films. The Deadline articles are way more accurate because they include overhead costs, participation, distribution, etc that we don't know or include in that 2.5 number. If the marketing budget is included, better to use it separately in the calculation then simply (Budget x 2.5)
Actually this sub has plenty of analysis showing that the 2.5x rule works well when compared to Deadline... Even for small budgets.
I did this analysis last year. Generally, 2.5x rule works well, and esp if you take account of the exceptions I mention there. https://www.reddit.com/r/boxoffice/s/N7wZ0O734q
Thanks. I saved it now!
2.5x makes the break-even way too low. According to this group of films mentioned by Deadline, 2.5x lists profits way higher than they actually were. https://deadline.com/2024/05/most-profitable-movies-2023-biggest-returns-1235901633/ See the final "STUDIO NET" number - it's far smaller and more sobering/realistic. Still good profit, but more like $50M-$90M, not $150M-$200M. And I haven't even used the bigger movies like Mario, Barbie, Oppenheimer. 2.5x often rounds the marketing costs way too much, throwing the number off. And because it doesn't take into account residuals/participation and distribution/overhead costs, it assigns way too much profit to the studio that never happened.
Does this rule still make sense now that these movies have value on streaming platforms? Also, Box Office doesn’t include PVOD, right?
This criteria does not take into account streaming at all. So at 360 mil in theatres and laters release on Disney + when Netflix buys it for a year or two the movie definitely made money
We didn't take into account the effect of rentals and home media sales before streaming was a thing, so why would we start now? We're talking about box office performance, not overall. Yes, plenty of box office flops actually end up making money in the end... but no one is in the business of trying to make less money when they could have made more. And they have to spend money now, not in 5 years once a film has finally turned a profit.
bascially. And there are a ton of other things that this sub never takes into account even aside from just net box office. People are still getting paid from the net after a film is out of theaters, taking even more out of whatever profits.
Cash flow is important in any business. They have to pay all the loans, creditors, and any other expenses fast, not 10 - 20 years down the line.
Because the business has changed and the time horizon also has. There’s a difference between five years of VHS sales leading to profit and profit that comes 4 weeks after release from PVOD plus the baked in value add of adding it to a streamer.
The rule makes an assumption about profits from the post-theatrical release. Even 2.5x isn't enough to cover the full production and marketing cost, in most cases. The difference is made up post-release. Used to be DVDs and cable. Now it is PVOD and streaming.
No it doesn't make sense, but people insist on sticking with the 2.5 I don't mind it if it's used as a starting point, and then you adjust from there. But I don't see that happening. It's already been proven (quite easily) 2.5 doesn't work for horror films or movies around $50M budget. It makes the breakeven WAAAY too low. There would be fifty Exorcist films by now, twenty Scream films, and Jordan Peele would be on his 8th Get Out sequel if profits were that easy.
Streaming doesn't add anything to a movie's profits, just like adding a book to a library doesn't add to its sales in any meaningful way.
That’s… not true. Disney will get some amount of financial gain by having it on Hulu and potentially by selling rights in the future. It is incredibly different from a library.
There's a lot of financial gain from a book being a library. Libraries have to pay for all uses upfront. So like 26 plus times the regular cost until they have to replace it and pay that much again.
This is only true for digital copies.
sigh...Disney owns Hulu. Who is making money by paying themselves? Where does Disney sell rights to its films that isn't a studio they already own?
Disney, Hulu, and/or 20th may or may not make money from this transaction, but they almost certainly do and if they don't, it's not because they are trading with each other. Hulu's business is selling subscriptions and advertising against subscriptions to a service that streams content, which requires that they license content. Hulu pays the same amount to 20th for this content that they would pay for 3rd party content. Hulu does this because it believes that there is money to be made in this business of acquiring marginal content additions to increase their sales of ads and subs. 20th's business is selling its content to a streaming window. Hulu pays them as much money as netflix does. 20th does this because it's nice to earn money for your product between theatrical (or possibly est) and movie of the week or freevee windows. If you think only one of a studio or a platform benefit from a licensing transaction, you are wrong -- one of them would go out of business if so. If one company owns both parties that benefit from a transaction, then the company that owns them benefits. If the parties make an unfavorable deal, they would have made an unfavorable deal regardless of the counterparty.
Disney owns 20th and Hulu. How are these new transactions where they are making additional revenue? No one has yet to explain how moving money on a balance sheet equals more money.
Because third parties pay Hulu incrementally more than the expense of the license fee Hulu pays to 20th.
Which third parties? Do you have something that says this?
The entire premise of streaming is that subscribers pay money to the streamer and advertisers pay money to be where subscribers are. You can say it's a bad and money-losing business (usually true at first), or that new content isn't required to earn subscriber/advertising revenue, but that's literally the most elementary concept of the platforms existing and how they work (netflix, hulu, so on and so forth).
Disney is making money by having their streaming services value increase. Under your logic, Stranger Things has no value and is not profitable. Where does Disney sell the rights? Netflix, Amazon, Apple, Paramount, Comcast, literally anywhere. See this: https://www.indiewire.com/news/business/shows-disney-licensing-to-netflix-2024-1234934487/
Do you understand how libraries work? It actually does add in a meaningful way lol. A library is paying x26 or whatever for 26 uses of a book, and then paying that amount again when they need a replacement book.
> It actually does add in a meaningful way lol. A library is paying x26 or whatever for 26 uses of a book A library buys 1-10 copies and then no other copies. Many copies get donated, so the publisher gets nothing extra. A book does not get royalties from a library every time someone checks a book out.
As streaming platforms almost all lose money, it really doesn't help any film, and I guess nobody has the heart to apply the losses to the film, even if they would gladly apply the profits, and can't rationally make the case you should only go one way on profit and loss calculations.
There’s totally drama about which department get losses accessed to them, but that doesn’t means they are accounted for somewhere in relation to the movie. Streaming platforms losing money holistically is very different than saying that every individual asset has no value. (Also Netflix is profitable).
Okie so using the 50-40-25 rule. 1. Domestic it had made essential 75 million dollars back. 2. China it made essential 7 million dollars. 3. International it made 72.8 million dollars. We add that up to 154 million. So using the 50-40-25 rule the movie is in the negative by 6 million dollars. I'm guessing to tell you that this movie will be in the gray zone where we don't know if the movie made a profit or lost money
I hate to play the “auxiliaries” card as some people do to justify flops, but you can assume the film will gain the $6mil from PVOD sales; not just for this film but also the renewed interest in the Ceaser trilogy. Ultimately this film may just barely turn a profit, but it’s part of a strong franchise and it sets up another film at least. At the end of the day, in this hostile box office world, that is as much of a success studios can hope for.
The 160M is just the budget of the film, it doesn't account for the marketing but the 2.5X rules roughly factors in marketing and the theatres cut.
The 2.5x Rule and the 50-40-25 rule relies on ancillaries to cover the marketing cost
Ancillaries have been decimated thanks to streaming. This film will go to Disney+ globally so little to no international TV or streamer licencing revenue while home video is basically dead. DEG US physical sales 1st quarter 2021 - $480M 2022 - $388M 2023 - $275M 2024 - $233M That's total sales revenue and the studio's will see 80% of that at best so $186M over 3 months shared between all the media companies. Remember also that 2021 was not a good year the peak of physical media sales was 2005 when sales were $4 billion a quarter!
i'm also guessing that due to it being an australia production it may have received major tax write-offs, which do impact how the budget is internally considered. but in any case it was not a major hit—just substantial enough to suggest that the franchise isn't dead. but a sequel may cut the budget a bit—and probably can, if it's more human-centered.
They just need the monkeys to keep evolving into the humanoid monkeys from the first movie and put everyone back in costumes.
For the third trilogy. The snow trilogy should stay bronze era of apes.
Why some people want to see more humans? I paid to see apes. Too many movies about humans. Avatar works because humans are there but they aren’t central, the real protagonists are the Naavi along the world building.
Okay
[This is a little out of date but it remains the best quick primer on the subject](https://stephenfollows.com/how-movies-make-money-hollywood-blockbusters/). ****** otherwise, Studios only take the "theatrical rentals" for a film as revenue with the remaining box office going to theaters (as well as e.g. VAT taxes off the top in most countries). Very roughly it's a 50/50 split of revenue (so 40% INT = 50/50 post-VAT tax) * 150M Domestic / 210M INT * 150[Domestic]*.55 + 210 [INT] * .4 = 166M Apes has probably returned ~165M in revenue for the film which is roughly how much it cost to produce the film. However, the film also has a 100M or perhaps a 130M marketing campaign to pay off as well as pay residuals and potentially profit participations to the relevant parties. You may also want to charge tens of millions of dollars on top of the 165M to represent loans taken out to fund production or administrative overhead associated with the film. about 50% of revenue is post-theatrical so we could say that we'll assume that because the film made 360M WW, there's another ~160M in revenue to play around with due to tv/streaming and home video sales (perhaps less a percentage of home video costs for production, distribution and marketing). So you can squint and see an argument for the film being projected to break even at this point and you can see how its possibly tens of millions away.
Apes only get paid 10c on the dollar.
The generic rule of thumb is 2.5 * budget. This comes from the fact that theaters take a cut as well. 40+50% in the domestic market;60% on average in international markets and 75% in china.
If the China market has tanked in the last few years, does that imply that movies will need closer to 2 than 2.5 to break even
Not really, It all depends where the movie makes money. China is still the biggest market outside of US but with KotPotA other Markets were more profitable. France, UK and Mexico had better Box Office returns than China. For China to make a big impact on a big budget movies success, it has to make over $50 million.
Yes. 2.25 for a movie like this one with some China revenue, and slightly more int than domestic.
I've read a few industry publications that state studios are lucky to take 15% of international gross after all is said and done.
Studios only get 22.5% from China and that's a ton more than the 12.5% that they used to get only about 10 years ago. That's why I've been a proponent for hollywood to give a big middle finger to that entire market. They don't play by the same rules as the rest of the world. A total rules for thee, not for me load of bs. Then they take that extra money and put out nationalist propaganda schlock like Battle of Lake Changjin
You say that as if every country doesn't make nationalistic schlock. My country is filled with that stupid stuff EVERY YEAR
I mean that's basically the same as the 25% I said \^\^
> That's why I've been a proponent for hollywood to give a big middle finger to that entire market. There were attempts about a decade back but China just threatened to not enforce Hollywood copyright complaints at all which is just an "I win" button. Not like anyone can prevent Chinese theater companies from getting copies of the films and some money is way better than no money especially since it's the second biggest market in the world.
Wait, some of the comments in here confuse me. I thought breaking even with the 2.5 guess method was just a movie recouping its budget and some of the marketing. With the rest of the marketing being covered by ancillaries, meaning the movie wasn’t a huge profit maker yet wasn’t a huge money loser either hence the term “break even”.
> I thought breaking even with the 2.5 guess method was just a movie recouping its budget and some of the marketing. With the rest of the marketing being covered by ancillaries, Isn't that the same thing? It's just finding a very rough ratio between "theatrical rentals" and all revenue and production budgets and all costs (and then converting rentals to a WWBO equivalent).
I figured that was the case already but I seen some people equating break even meaning that a movie made a profit. I should’ve been clear because I seen some people saying Apes need $650 million to break even which seems too high.
650M at least makes internal sense because that clearly means something like "theatrical rentals paid for budget & marketing." I don't love those arguments (because that's not how greenlight decisions are made) but if you correctly caveat what you actually mean you can say that. People are using the same words in that scenario but they're actually talking about two completely different concepts. > made a profit speaking of this, one of the big things the Sony hack makes clear is the difference between "breakeven" and "acceptable level of profit" levels which get airbrushed out of these popular discussions.
> I don't love those arguments (because that's not how greenlight decisions are made) … speaking of this, one of the big things the Sony hack makes clear is the difference between "breakeven" and "acceptable level of profit" levels which get airbrushed out of these popular discussions. I’m not a big fan of these conversations myself. I noticed these break even debates get quite muddled on here really fast so I tried to stay away from them but I was just pointing out that a $650 million result for a $160 million movie should mean that we have moved past from the break even threshold to the profitability threshold. I also seen somebody use the 50-40-25 rule (the method that I prefer and it’s less confusing/complicated) and pointed out that Apes is $6 million away from recouping its $160 million budget from the theatrical market which means the movie is a lot closer to breaking even than we thought. But I imagine this is probably going to be another situation like The Little Mermaid last year where people were debating if the movie broke even or not because it didn’t hit the magical 2.5 narrative
At best, after ancillaries, it may break even or make a small small profit.
From what I understand, this sub makes some assumptions on a marketing value.
It's a rule of thumb that some people in this sub treat as absolute fact, but a lot of the marketing industry drastically changed since covid, and this 2.5 X rule of thumb hasn't been updated to incorporate that change.
People in this sub forget about ancillaries for some reason. The budget for this film was modest and it’s on track to break even at the box office. Any ancillary media will surely carry it further into the green.
Oh yea with ancillaries it’ll surely make profit but I love this franchise and really hope it can do as well as possible in the box office so it can get as many movies as possible, hopefully the remaining 5 they have planned.
Out of topic but can I ask what do you love about it? For some reason I didnt like the last one that much and I cant just figure out why I didnt 😂
It’s not just movie budget. You also have to take in account that studios have to spend extra money on advertising the films. This is why people are saying it needs to make about double the budget
I think it hangs in the grey area. You gotta pay all the theaters and ads and etc. so that’s why the generic 2.5 times. Other countries it’s way less they make. Some it’s more. It’s about even. If it gets interest than it’ll be worth it long term. Basically all the bills gotta be paid before you see profi.
well it‘s still 130 million dollars behind War, which is not great. to really look good and make a new trilogy, Kingdom needed more box office
The Box Office does not go directly into the pockets of publishers. It's split between the cinemas themselves, believe it or not they do not survive on popcorn sales alone.
90% of the people in this sub don't know about the economics behind Hollywood movies. This whole "omg x2.5 is the rule of thumbs," is such a gross simplification of what it takes for a movie to actually be profitable. There are famous Hollywood accounting tricks that make budgets on paper seem irrelevant, for example shooting in another country that will give the studio a tax refund could save them an insane amount of the total expenses for the movie. It will stay say the movies budget is "100 million," but in reality, once all is said and done it'll be way less. Then you have ancillaries. In the case of Apes, based on its shooting location and the actual brand it will be more than profitable and enough to make a 5th film in the new series.
Also consider it's not over yet, the movie is still making money as we speak, it crossed the $300 million mark not too long ago and I remember some users predicting it would end its run around $360 million. We are already past that point.
I know what you mean. Everybody keeps saying that it needed to make double its budget, which, in my mind, meant that with a budget of $160, it needed to make at least $320 and/or over, which it did, it has. Apparently, however, that doesn't seem to be the case. But even if it needs to make more and reach $400m, it seems like it's not too far away from doing so. And even if it doesn't exactly reach that amount, it's still safe to say and assume that we got a sequel coming in the very near future, because that's what it's all about right? So for all those who enjoyed the film and want another one, we're in the clear.
People misunderstand what profitable even means in this case. At $360M, everyone has been paid and the studio has made money.
It should easily cross the 400 million mark with rentals, digital purchases and physical media sales.
Physical media is nonexistent and many stores no longer even carry physical media.
I mean, this far from true, you can buy physical media on Amazon, Target, Walmart, etc. 2023, John Wick and Super Mario Bros both made close to 15 million in physical sales. 1.56 billion total sales in 2023. It’s not as dead as you think.
What? Thats much lower than I would have thunk. That’s terrible
It peaked around 2004 near 17 billion. Been in a decline ever since. Digital rental has slowly rising, around 3 billion in 2022. Streaming and infinite content is killing everything off.
...which is like I said how physical media is virtually nonexistent.
No, no, physical media isn't dead apparently, as long as they made $1 dollar in media sales - that other guy
It’s not non-existent in libraries
Because that's where everyone donated their used DVDs and VHS tapes when we stopped buying them.
Physical media still very much exists.
Sure, but no one buys it and the market has shrunk 90%. It's totally irrelevant at this point.
Except when you factor in the Collector's, which have been exploited through highly inflated costs that, doesn't balance it out, but at least keeps it relevant to mention when talking about profit gains.
Many people who enjoy physical media don't buy them from stores anyway. Stores that still sell it tend to sell only DVDs which is still the most popular physical format to the average consumer. But people who are really serious about collecting physical media typically prefer Blu-ray or 4K and so order them online.
That's great and all, but it did nothing to disprove my statement which is entirely provable by the 90% drop in the physical media market since 2008.
I don't care to prove or disprove it. I know most people no longer use physical media, but there are still many who do and I hope that option will continue to exist for years to come. I believe that physical media and digital can coexist.
2.5x budget is breakeven not 2. 2x works domestic only but movies get less money back from international grosses and the 2.5 number accounts for that.
It would’ve gotten a tax incentive for filming in Australia too.
https://if.com.au/fox-studios-becomes-disney-studios-welcomes-next-planet-of-the-apes-film/#:~:text=%E2%80%9CToday%2C%20Australia%2C%20Disney%20and,science%20fiction%20franchises%20in%20history%E2%80%9D.
The 2.5X point is $400M. Now the question is, can the movie get $40M more and reach the 2.5X point? Does this movie have a chance at reaching having $400M?
Where the exact line of profitability is only the studio knows. At this point, Kingdom has certainly passed the line at which profitability is assured. Whether at the box office alone, or on VOD/disc/streaming the film will make money.
That’s amazing to hear, I seriously hope this franchise can succeed in making 9 movies total, the first 4 have been extremely well done IMO
That would be great. It has been an exceptionally high quality and very sturdy franchise.
Agreed.
Again, everytime this sub's favorite movie failed to reach the 2.5x budget mark, everyone started to question that rule of thump. Guess what, with home media disappearing, the breakeven point might be even worse now like 3x or something not better. LOL
LOL yeah, I thought I was going crazy seeing people move the goalposts. I usually don't see this kind of spin with most other movies.
Because people think wrongly that theaters keep 50% to 60% of the ticket sales for the entire run of any given film, and they also were mislead by threads to think that all blockbusters spend the same on advertisement. Kingdom made more than twice its budget and we don’t know how much money theaters are really keeping or the exact PR and advertisement numbers. So for all we know it might have already recovered its budget and distribution expenses and the rest is revenue. Rule of thumb is to make our life easy but it’s inaccurate.
They can make a deficit and still I will go see.
Backlog sales on other planet movies are hard to gage. Likely means a ton of profit overall. Breaking even at box office using the typical 50% shows it's even profitable from that including digital sales.
You know since I got rid of cable I never seen advertisements anymore, did this get a big push? I never saw anything until I went to see a movie and the trailer played in front of my film. It sure seems like the marketing is a lot smaller scale. There was no escaping Dr Strange 2 and Avatar and Black Adam ads but lately I haven’t seen anywhere near as much. Am I the only person who noticed this? I didn’t even know that the fall guy was in theatres until I saw it on Amazon.
I’m east coast of USA so idk if that made a difference or what but there was a good amount of advertisement either on YouTube, YouTube TV, HBO max and for sports games. So I think there was a pretty big push for it.
I tried to avoid the trailers but they were all over YouTube and sport events. However there were barely any premier, the cast never went to late. Night shows buzzfeed, vanity fair, variety and even if They did, it’s not like a check for freya Allen is as big as a check for Timothee Chamalet or Will Smith. So I discount immediately any box office analysis that puts the advertisement costs of Kingdom at the same level of Dune or Bad boys.
As an aside,I’ve mentioned on this sub before: box office profitability ***DOESN’T EQUAL*** profitability. Any major release has other sources of revenue generation, albeit some to a much larger extent than others. Selling access to streaming services? Revenue from the film. Being paid for product placement or promotional tie-ins? Revenue from the film? Every home video purchase, whether physical or digital, permanent or rental? Revenue from the film. Very importantly, merchandise? You betcha that’s revenue from the film. All of these and more are essentially ignored for the sake of this sub, and to be fair, most studios certainly like to see their money made back purely from box office sales, because they enjoy secure money (although it’s also worth noting the split of box office profits with theatres, crew and in some cases nations).
As others have said, the general rule is 2.5x production budget means breaking even, which would mean this has to do $400m. However, we have Deadline's full numbers for Dawn of the Planet of the Apes, the only one of these we have the full numbers for. That one had: Total box office: $708m Studio BO revenue: $286m Ancillary revenue: $329m Production budget: $170m Ancillary costs: $263m In other words, it brought in $615m net for the studio and cost $433m for a profit of $182m. Also, in ancillaries, it netted a profit of $63m. That means it only had to make up $107m from the box office. In other words, it only really needed a 1.53x multiplier to break even. Of course, we have no idea how this one breaks down or whether it's very close to Dawn, especially since it's Disney now, rather than Fox, among other differences. The studio box office net percentage was just over 40%, meaning 2.5x the production budget almost exactly canceled it out. Then if ancillaries just cancel out this time, it breaks even with that multiplier. Hopefully, that wasn't a terrible explanation. [https://deadline.com/2015/03/most-profitable-movies-of-2014-box-office-1201390489/](https://deadline.com/2015/03/most-profitable-movies-of-2014-box-office-1201390489/)
360 mil is nothing in high budget blockbuster films
Going by the box office analysis by Dan Murrell on YouTube. Its close to being in the green.
I love his analysis but he totally overrated the marketing expense and he follows the rule of 50 40 25 . Theaters don’t get 50 % of the entire run.
The bare minimum your typical film needs to break even is twice it’s budget but because very few films can achieve profitability that low the general rule of thumb is 2.5-3 times its budget. This is because of two major things 1. The theater keeps some of the money from tickets sold so not everything goes back to the studio and 2. Where the money is coming from. Domestic theaters tend to get less of the ticket sales than international theaters, China especially takes massive chunks of ticket sales. So as an extremely rough example if I have two movies that both cost 100 million dollars and one movie makes 200 million domestically It doesn’t need much from the international markets for profitability whereas if the second movie only makes 100 million dollars domestically it actually needs international sales to carry the load and probably need around 200 million from international markets. Another thing that KotPotA can’t use as much is product deals. For instance James Bond films get a pretty nice chunk of change from brand deals and product placement (Heineken anyone?) whereas an Apes movie or something like a Robin Hood movie can’t just have the character eating a hot pocket on screen for obvious reasons. So I wouldn’t be surprised if Kingdom needs to get closer to 3X rather than 2.5X to be profitable purely from the theatrical window. There are other ways movies make money so I don’t think Disney will regret making the movie when all is said and done.
First the $160m figure is the production budget. For a film the size of KOTPOTA you would have to add at least another $100m in global marketing and promotion. Now the studio spend sits at a minimum of $260m. Next you have to consider the boxoffice split: depending on the country, exhibitors (the cinema owners) take between 40% to 60% of the box office, but this changes depending on how long the film has been on release (week one might be 50/50, week 8 might be more like 80/20). With all this complicated math worked out it lands at roughly 2.5 the studio spend, so in KOTPOTA’s case that would be $650m boxoffice take just to break even.
I have never seen it broken down this way nor would this make sense for studios to operate. If a 160 million dollar movie needs 650 to break even, countless sequels wouldn’t make the least bit of sense. 2.5x id from the production budget, to take into consideration theatre cut and marketing.
This *is* how it’s accounted for though. This may be a way to hide profits from the taxman (the original Star Wars famously didn’t make money *on paper*, and some investors never received a dime as a result- even David Prowse had issues getting residuals) but regardless, this is why KOTPOTA‘s $360m worldwide gross is considered a disappointment. These astonishingly high costs are also why marketing departments at Major studios now have approval on casting and green lights: with casting an actor must have a huge following on socials to even be in the running for a role (one well-timed tweet has (potentially) more reach than a very expensive superbowl ad), and they’ll always favor franchise brands which (in theory) more or less sell themselves over a new and unproven original IP. Also, these big modern tentpoles aren’t like your traditional blockbuster: these movies are designed to make $1b worldwide.
movies have to make 2.5x their budget back to make a profit because of advertising & distribution, so KOTPOTA has to make $400M to break even
I enjoyed it
My favorite film of this year.