How can I tell whether a movie made a profit or a loss?
 

Greetings,

I know essentially nothing about showbiz accounting (or about accounting, for that matter), so forgive me if the question sounds simplistic or naive.

The Wikipedia page for the movie What Maisie Knew (2012) states that its budget was $5 million and its box office (revenue? profit? income?) was $2.7 million. Does that mean that the movie lost its producers $2.3 million, or are there other sources of revenue/income/profit that aren't included? In general, is there a simple formula (or website, or some other resource) that can tell me how much a movie made in net profit or loss?

Thank you,
Clarence

Re: How can I tell whether a movie made a profit or a loss?
 

http://www.the-numbers.com/


http://www.boxofficemojo.com/

Re: How can I tell whether a movie made a profit or a loss?
 

Thanks, but that doesn't address my question. My question was, how do you determine whether a movie made a profit or a loss? Is that simply a matter of box office minus budget = net profit/loss?

Re: How can I tell whether a movie made a profit or a loss?
 

There's no way to know exactly, because too many variables go into it and we don't have data (let alone good data) on all of them.

I will say that if you see a clearly reported budget, and the gross (assuming it's worldwide gross), you can pretty safely assume it's at least that bad. But, on the flip side, having a gross above the budget doesn't necessarily mean it was a success, since there are marketing costs (and, to venture into a more complicated subject, opportunity costs) to consider as well.

That said, you could still only use these to draw very narrow conclusions. For example, you may not know how many producers the film had, or what their respective investments were. Or how well it did on home video. So that would leave you only being able to say (with confidence) something highly specific, like "this movie did not make a profit for its producers, taken as a group, while still in theaters."

Re: How can I tell whether a movie made a profit or a loss?
 

Ok...


Usually sites like Wiki only list the cinema ticket takings.


So if What Maisie Knew (2012) says a budget of $5m, and the number it made back according to Wiki is $2.3m, then the $2.3m is the cinema takings.
The film may have made back more from DVD sales and online purchases, but in terms of cinematic run, it made back less than half the budget.


When talking about "budget" though... "budget" simply means cast and crew wages, and production items like sets and CGI, effects etc. Basically the stuff needed to make the movie.
Many sites, again like Wiki, don't often take into account the licensing fees (license to have the movie shown in other countries) and the advertising costs (paying TV stations to show trailers and companies to make posters etc).


So, a movie with a budget of $5m, for instance What Maisie Knew (2012)... you have to add around $1m on top of that for advertising and licensing.
A larger movie, for instance Ghostbusters (2016), the budget was $144m... but the pre-production and the licensing, advertising fees and so on, the movie actually cost over $500m.


Sites like the ones I pointed you toward show more information than places like Wikipedia.
IMDb is also a good site for numbers though.

Thank you all for the responses. I suppose the take-home message is that it's very complicated, as I had supposed, and that it's very difficult to obtain the necessary info to make the calculation.

I found a site, to which I am apparently not allowed to link, which says that "... a rule of thumb seems to be that the film needs to make twice its production budget globally [in order to break even]." However, the writer, Charlie Jane Anders, is notoriously unreliable, so I don't know what to make of it. Any thoughts?

Re: How can I tell whether a movie made a profit or a loss?
 

That's not a bad rule of thumb tbh ^^


Of course, the larger the film, the larger amount more it'll need to make back.
As I mentioned, Ghostbusters is a $144m budget, but technically cost over $500m. That's well over 3 times the "budget".


Something like Paranormal Activity was made on a budget of $15,000. Marketing and licensing et al probably meant the film, being as independent as it was, cost $25,000, which is less than double the "budget".


Basically, the larger it is, the more the marketing department and pre-production will cost.

Re: How can I tell whether a movie made a profit or a loss?
 

Did Ghostbusters actually cost 500 million? I thought that was just what it needed to make to break even. Since movies don't take all of the money from ticket sales, how much money needs to be made in order for it to be considered a success doesn't normally match the actual budget, at least as far as I know.

That is the established rule of thumb, that a movie needs to gross twice its budget to break even, more or less. And unless there's a leak from a hack or something, that is as close as we're going to get to knowing what the real profits are. At least it tells us if a movie was minimally successful.

Everybody, until Colors noted it, seems to forget the studios split the gross with the cinemas. What I would be fascinated to learn in more detail is how much money a movie makes once its cinema run is over. I've "heard" a movie can make as much from sales and rentals as it does in the theatre, as far as what the studio takes in, but with the rental landscape having radically shifted, I don't know if that still holds true.

More than half of a movie gross goes not to the studio that produced the movie but to theaters. Usually about 40% of the gross goes to studios.

So for a movie to break even, if it costs 100 million to make and 100 million to market, it would need about 500 million gross.

However, movies have other sources of revenue like disk sales, streaming royalties and TV royalties. But usually the big profit comes from theater grosses because the return is quick and the studio gets a higher share of the revenues.

The usual rule of thumb is 3 times the production cost to make a profit and if you look at box office mojo, the usual ratio is around 3 for most movies in there.

I think you're too high with the percentage that theaters receive, I've always heard that it is much lower than that.

Let's see the Japanese statistics:

http://www.eiren.org/statistics_e/

In 1999: 182,835 million yen of box office revenue, of which 82,794 million yen went to distributors (i.e. the studios who distributed the movie). So in Japan the bulk of box office revenues stay in theaters. I don't think it's different in other countries.

Anyway, the means that to make a profit from theater grosses a movie has to make a box office of more than 230% to 250% of it's cost of production and distribution.

Re: How can I tell whether a movie made a profit or a loss?
 

Initially i wasn't going to reply to this thread, nevertheless, here is a simple way to answer your question.

Take the full profit amount from the video, subtract the costs of all (production, fx, display, etc).
If the value that you get is not negative than it made a profit.

The ghost of Art Buchwald is laughing somewhere.

Loved What Maisie Knew