Image from Information is Beautiful
This week we saw the release of what many in the media are calling one of the biggest box office bombs in history: John Carter. While I think it’s a bit premature to write this one off as it seems to be playing pretty well internationally, it’s a good segue to a recent infographic released by Information is Beautiful on Hollywood profitability.
The graph sorts films by their profitability in an easy to navigate system. What’s interesting is that while John Carter may have bombed, it’s seems that according to this graph, the vast majority of films generally make very healthy profits.
Of course most in the industry will tell you that film production budgets do not contain huge marketing costs. The general rule of thumb tends to be that marketing costs are equivalent to the productions costs of a film. So in order to break even, a film needs to make 200% of it’s production budget.
I think that may be a good rule of thumb. If you swipe around the films in the 100-200% region, you find many big tent-pole films that didn’t give birth to a sequel. A sequel is a pretty good indicator that the previous film made a profit.
Soldier On.
VFX Soldier 
Or… “enough” of a profit. Because if one reads comments of various media producers (this does not only apply to movies) carefully, one should notice that companies will frequently not refer to whether something “has been profitable” but whether it “has been profitable enough”.
Also with the “bombing” of movies – I find that that is said pretty much about anything that doesn’t make people stream into theaters like crazy. Just take the often-cited bomb of recent decades: “Waterworld”. That actually had a profitability of 150%. While it may not have made a profit, a “bomb” is something very different in my view. Like “Mars Needs Moms”. Now there is a bomb.
One should also take note of how many movies in this graph were profitable. At least two thirds.
And also how the profitability takes off in the highest quarter. Puts it into perspective when some PR people either say that the movie industry would be in bad shape or that they simply “can’t” pay artists more.
Reminds me of another kind of graph I would find even more interesting: Where do the profits go? What percentage is reinvested, what percentage is paid out in bonuses to management and such and what percentage is diverted “elsewhere” (as it is well-known that not all capital that benefits individuals is distributed transparently)?
Am I right in thinking the studio only gets about 50% of the reported gross (with the theaters taking the other half) so break even would be more like 400%?
No, you are not. Theaters generally do not profit from tickets sales. They are glorified snack vendors.
The joys of working out if a film has made money or not.
“Distribution and exhibitor deals are done behind closed doors on a film by film basis.”
“But both sides also want the biggest share of the box office take possible. According to industry estimates in the UK, that typically means around 55% going to the exhibitor and 45% to the distributor. In the US, where there is an oversupply of screens, the percentages are reversed.”
Here’s a good article about it. In 2008 the largest cinema chain in the uk refused to show rambo 4 supposedly due to the deal the distributor wanted with the exhibitor:
http://www.guardian.co.uk/film/2008/mar/07/1
they said the same thing for waterworld….
http://thehollywoodeconomist.blogspot.com/2010/07/hollywood-accounting-demystified.html
http://thehollywoodeconomist.blogspot.com/2010/06/eyes-wide-shut.html
some possible clues….