We were talking last week about the difference between blockbusters and huge money makers. Blockbusters are films that make a crapload of money. However, by ‘making’ money, I mean generating profits.
Superman Returns reaped a worldwide box office of nearly $400 million dollars. A lot of money, right? No. Because the film’s production budget was around $300 million. That’s right, $300 million. And that was just the production budget. Add in no doubt tens of millions extra for advertising and prints, and with the studio MAYBE getting 60-70% of that not quite $400 million back…well, you can see why ‘blockbuster’ doesn’t cover it.
So why do they gamble these tremendous sums? Well, look at the film’s fellow DC inspired release, The Dark Knight. The beneficiary of a comparatively modest (I know, it’s insane) $185 million budget—along with the advantage of being a hundred times better of a movie—Dark Knight drew a gobsmacking $991 million worldwide…all but a BILLION DOLLARS.
Despite probably losing conceivably hundreds of millions on Superman Returns, Warners made more hundreds of millions yet on Dark Knight. And then you factor in all the auxiliary monies, for home video and toy and comics and other tie-ins…well, the Dark Knight people can pretty much write their own checks for a while. The Superman Returns people…not so much.
Even so, the model is quite evidentially precarious, because if Dark Knight hadn’t generated enough profits to make up for Superman Returns, it would have been a grim year indeed at Warners. Certainly Marvel’s immense, if not nearly as immense, profits from Iron Man offset the comparatively small losses (if you can count ten or twenty million in losses ‘small’) from their underperforming The Incredible Hulk. Admittedly, TIH may well break even or generate a small profit when all the auxiliary monies are counted. It’s helped by being one of the first ‘new’ action movies out on the still growing Blu Ray format.
Still, it has to have the Marvel people worried. Iron Man 2 is all but assured of being a big hit, potentially even bigger than the first movie. However, if the other movies (Thor, Captain America, The Avengers) in their grand scheme tank, and worse than The Incredible Hulk did, a second profitable Iron Man movie would not be able to make up for them. And that’s especially true if any one of the movies just outright bombs. That’s true even with Marvel wisely straining to keep the budgets (comparatively) sane, as indicated by their recent canning of Iron Man co-star Terrence Howard, apparently over money issues.
For myself, I can easily see Thor not doing all that well. Nor is Captain America close to being a slam dunk. (On the other hand, I can’t imagine the superhero free for all The Avengers bombing. People not going to see Thor, Iron Man and Captain America fight the Hulk? Inconceivable.) It helps that Marvel is strangely committed to trying to make all of these actually good films, as indicated by their negotiations to hire Kenneth Branagh to direct Thor.
Still, the dangers are real. Universal lost its shirt on Evan Almighty, a film with a $175 million budget. ($35 million more than Iron Man!) Add in huge advertising outlays, and the film’s worldwide gross of $174 million, with Universal maybe getting $100 million of that, meant they probably lost a good hundred million on that film.
Indeed, more films lose money than make it, and it’s only the blockbuster profits offsetting these loses that keep the studios running. (As mini-studio Carolco learned when it went out of business following the complete and utter collapse of their hugely budgeted Cutthroat Island back in 1995.) Profits from the Dark Knight not only had to offset the losses of Superman Returns, but those of another big turkey this summer, Speed Racer. With a budget of $100 million added to a GIGANTIC (and proportionally expensive) ad campaign, the film’s flaccid $93 million worldwide gross, of which Warners saw maybe $50 million, spelled another huge kick in the nuts. One doubts that toy manufacturers and the like were very happy either.
Still, huge money equals publicity, and that’s why smaller films that reap huge, but not blockbuster, profits don’t get nearly as much ink. Juno was nominated for several Academy Awards, but the overlooked fact was that it was nearly a legitimate blockbuster financially. The film, made for $7.5 million dollars, grossed worldwide $230 million. That’s an insane cost to profit ratio, of a type that even a film like Dark Knight can only dream of. And all on a film that had it bombed would have been caused its studio even a financial hiccup.
This week’s box office is likewise instructive of the sorts of little films that help the occasional blockbuster keep their home studios afloat. This week’s top ten saw a host of (comparatively) cheapie movies making a boatload of money, and a few more expensive ones losing it. Of course, when the big films like Quantum of Solace hit, attention will be drawn by their huge box office takes. However, it pays to give notice to smaller films too, which on a negliable amount of risk can pay extremely nice dividends.
Much like this summer’s surprise hit Sex and the City (which on a $65 million budget, pulled in more worldwide than Superman Returns), these films made money by appealing solely to a discrete but fervid demographic. Opening on 3,600 plus screens, High School Musical 3 drew an astonishing $42 million in one weekend, all for an investment of a skimpy $11 million budget. The film should easily draw $100 million domestically, and following in the footsteps of the first two movies, will make a crapload more running on TV and from home video sales. Even more impressively, the film in 22 foreign territories drew an additional $40 million, for a staggering $82 million take in three days. That’s just crazy money.
Also hugely profitable right out of the gate was the fifth (!) chapter in the Saw franchise, which release a new movie every Halloween to similar results. Although the film’s three day take of $30.5 million was slightly low compared to previous entries, Saw 5 is again already a tremendously successful film based on its $11 million budget. Although it undoubtedly won’t have the legs of High School Musical 3, Saw 5 will similarly thrive on home video, generating further plush profits. Meanwhile, Saw IV made more ($76 million) in foreign box office take than in domestic ($63 million), so that again bodes well for the fifth chapter, as well as for seeing Saw VI out next year.
But even not counting foreign and TV and home video monies, let’s put it this way: The Saw Franchise will probably hit the $350 million mark domestically by the time Saw V leaves theaters. Meanwhile, the aggregate production budget for all five of the films is roughly $35 million.
That means just in domestic box office terms alone, the five movies has grossed just about ten dollars for every dollar made producing them. And the hundreds of millions more from foreign and auxiliary monies are further pure gravy. Taking them all together, the Saw franchise is quite possibly going to be a BILLION DOLLAR franchise when all is said and done.
The weekend’s third biggest movie, though, is the first of several failing medium budgeted movies. Produced for around $30 million, the actioner Max Payne has drawn about $30 million in domestic box office in two weeks, and only an anemic $6 million more in foreign take so far. With the studio getting only a portion of that gross, the film is destined to either lose a few million or stagger into an equally small profit when all is said and done. Certainly they can only look at the figures for High School Musical 3 and Saw V with envy.
Number four this weekend was Beverly Hill Chihuahua, which again appealed strongly to one demographic (kids) and not at all to much anyone else. Still, the kiddie market is realiable, and on a $20 million dollar budget, the film has already made close to $80 million domestically, and about $14 more worldwide. So it’s already a huge success, with no doubt lucrative home video monies to come.
Even a (comparatively) small budgeted film can bomb, however, as shown by the desultory $6.3 million opening weekend take for the $30 million budgeted cop drama Pride & Glory, a film destined for a quick trip to video shelves. And thirty million isn’t much by Hollywood standards, but it’s rather more than HSM 3 and Saw V cost, combined. Not much pride nor glory for ‘stars’ Edward Norton and Colin Farrell.
Women’s flick The Secret Life of Bees is already a minor success, having made about $20 million on an $11 million dollar production budget. We’re not talking big profits here, but solid ones for the investment, especially when TV and home video monies are taken into account. On the other hand, one doesn’t see this making much if anything overseas.
Oliver Stone’s W. is not exactly a bomb based on its $25.5 million budget, but it’s close, especially since they spent a lot more on television advertising. The film’s drawn nearly $19 million in domestic box office, but in its second weekend was been fading fast. At this point it looks like the film will suffer a modest loss, although for mini-studio Lionsgate, a loss of several millions looms far larger than it would for Universal or Columbia.
Eagle Eye had a modest production budget (for an action film) of about $80 million, but with a worldwide gross of $132 million so far, looks like it will only stagger into break even territory once auxiliary monies are counted.
The big loser out right now, and the film with the biggest budget, is the Ridley Scott / Russell Crowe / Leonardo DiCaprio bomb Body of Lies. Warners tried to cover its ass by giving the talent more backend (which they will obviously never see) instead of huge upfront salaries, but the studio is still due to lose tens of millions on the picture. With a $70 million production budget along, not counting prints and advertising, the movie has drawn a paltry $37 gross worldwide.
The last top ten film tells a similar tale. The politically paranoid horror flick Quarantine is already a healthy success, having drawn so far a nearly $30 million domestic gross on a $12 million production investment.
Meanwhile, speaking of appealing solely but strongly to discrete demographic groups, let’s note the success of the week’s 11th top movie, the Christian domestic drama Fireproof. Starring former TV star Kirk Cameron, Fireproof in five weeks has drawn a seemingly lowly $23 million in domestic box office, with no foreign take as yet reported (and, I’d imagine, not anticipated). However, this is a film that cost a staggeringly low half a million dollars to make, and which has spent nearly nothing on advertising costs. More millions are sure to result from home video sales.
The next year should be interesting in this regard. In the aftermath of the writers’ strike, and with the economy increasingly shaky, several of the big studios for the first time in memory are responding with plans to release fewer movies next year. This leaves more screens open for niche product from independent studios. I’d like to think that variety will prove a good thing, both for the industry and we the viewers.
