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May 07, 2009: "Hollywood Economics 101" 
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Post May 07, 2009: "Hollywood Economics 101"
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Thu May 07, 2009 11:00 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
I find box office numbers truly fascinating and have always been curious about weekend totals and what not. I think it's because, for as long as I can remember, the weekend box office totals have always been printed in my local paper every Monday morning. I never understood why they bother to do that, it doesn't seem like something that would be of great interest to the majority of the American population. However, in my case I know that the printing of those numbers in the paper had an influence on my own growing interest in film as a kid. I have always found myself, as you suggest, "rooting" for movies I like or wanted to see versus the movies I viewed as crappy and unworthy of people's money.

America's fascination with weekend box office totals is something that is still quite a mystery to me however.


Thu May 07, 2009 11:24 pm
Post Re: May 07, 2009: "Hollywood Economics 101"
Too many people equate box office revenue with a movie's quality. I mean if a movie has a high weekend gross then the studio heads assume everyone loved the movie and that it's a critical success. People forget the curiosity factor for seeing a movie and that just because many people saw it doesn't mean everyone loved it. Sure, lots of people saw "Wolverine", but how many really enjoyed it? The movie got mixed reviews, no?


Thu May 07, 2009 11:59 pm
Post Re: May 07, 2009: "Hollywood Economics 101"
ck100 wrote:
Too many people equate box office revenue with a movie's quality. I mean if a movie has a high weekend gross then the studio heads assume everyone loved the movie and that it's a critical success. People forget the curiosity factor for seeing a movie and that just because many people saw it doesn't mean everyone loved it. Sure, lots of people saw "Wolverine", but how many really enjoyed it? The movie got mixed reviews, no?

True enough, although I think the supposed value of looking at box office totals is that it’s theoretically a reflection of what viewers will pay to see, and not necessarily a reflection of the quality of a film per say. Of course, you also have to factor in availability, the amount of money and effort spent on advertising, viewer familiarity with the product (sequels, prequels, and remakes), etc, when using box office revenue as a gauge for movie-viewers’ taste. People who watch films are as easily influenced as any other consumer, and a strong take at the box office doesn’t necessarily imply that people are being given what they want at theaters. Movies that make big bucks on their opening weekend and then subsequently dry up testify to this. If James and others are right, Wolverine could be the next example.

But I don’t think studio execs necessarily care if people like their films or not; all they care about is whether people will pay to see them.


Fri May 08, 2009 1:46 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
ck100 wrote:
Too many people equate box office revenue with a movie's quality.


True. It's important to note that there are two different types of movies that do well at the box office: bad movies, and good movies. ;) Certainly, there are many bad movies that have made a ton of money; after all, as H.L. Mencken once remarked, "No one ever went broke underestimating the intelligence of the American public."

But when a movie makes money across a broad spectrum of demographics, the box office can help define a consensus of a good movie. For example, reviewers were divided about Titanic, but obviously a huge percentage of the public thought it was a good movie, and voted with their wallets. In this case, I think the public was right.


Fri May 08, 2009 4:39 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
I still will never understand why they won't print the number of tickets sold and use that as a comparison. Isnt the number of people who see the movie a far more impotant number than the gross? Highest grossing film is a meaningless number in the year of $12 movie tickets to ANYONE except Hollywood producers.

I know James has talked about this in the past, how movie attendance has seriously waned over the years, to the lows it is at now. Highest grossing films still mean that less and less people actually go to the movies.

And the next time I get a soda thrown at me for telling a woman with a crying baby to get off her cell phone and please be quiet, I will be another casuality who will be looking to improve my TV setup and download whatever I can get my hands on.


Sat May 09, 2009 2:02 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
MrGuinness wrote:
I still will never understand why they won't print the number of tickets sold and use that as a comparison. Isnt the number of people who see the movie a far more impotant number than the gross? Highest grossing film is a meaningless number in the year of $12 movie tickets to ANYONE except Hollywood producers.


Attendance numbers would make more sense but they're not as "sexy" as dollars. Plus, because of inflation, financial grosses allow producers to constantly boast new records, even when attendance and inflation-adjusted totals tell another story.


Sat May 09, 2009 9:48 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
BANKA wrote:
I find box office numbers truly fascinating and have always been curious about weekend totals and what not. I think it's because, for as long as I can remember, the weekend box office totals have always been printed in my local paper every Monday morning. I never understood why they bother to do that, it doesn't seem like something that would be of great interest to the majority of the American population. However, in my case I know that the printing of those numbers in the paper had an influence on my own growing interest in film as a kid. I have always found myself, as you suggest, "rooting" for movies I like or wanted to see versus the movies I viewed as crappy and unworthy of people's money.

America's fascination with weekend box office totals is something that is still quite a mystery to me however.


I think it was in the early '80s when newspapers started posting box office totals. I believe what happened was the A.P. picked up the numbers from the trade paper VARIETY and a lot of papers ran the numbers as a curiousity in the entertainment section. Publicists latched onto this as a marketing tool: if a film had the #1 position, it could now be called the "#1 Film in America!" After that, it snowballed.


Sat May 09, 2009 9:51 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
James Berardinelli wrote:
Attendance numbers would make more sense but they're not as "sexy" as dollars. Plus, because of inflation, financial grosses allow producers to constantly boast new records, even when attendance and inflation-adjusted totals tell another story.


Ah, good ole' American values... Bullshit sells better than honesty...


Sat May 09, 2009 7:32 pm
Post Re: May 07, 2009: "Hollywood Economics 101"
If you want to get really nitpicky (and I'm a Trekkie, so I do), adjusting for inflation, the most expensive Star Trek movie is The Motion Picture. It would have cost $102,502,289 in 2008 dollars. It also has the highest inflation-adjusted gross at $240,905,144. First Contact has the best opening weekend, adjusted or not. It made $30,716,131 in 1996, which is about $41,742,187 in 2008 dollars. All numbers come from BoxOfficeMojo.com.


Sat May 09, 2009 11:29 pm
Post Re: May 07, 2009: "Hollywood Economics 101"
Great article. One point I have to disagree on is regarding Wolverine. It looks like they will do the sequel based on the money they already collected:

http://www.imdb.com/news/ni0773283/


Wed May 13, 2009 9:04 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
yurymetelski wrote:
Great article. One point I have to disagree on is regarding Wolverine. It looks like they will do the sequel based on the money they already collected:

http://www.imdb.com/news/ni0773283/


You're basing this on a WENN article? (Perhaps the most notoriously inaccurate entertainment website to have a veneer of legitimacy.) And even this article only cites a quote by Jackman. I'm sure he'd like to do another one, but Fox is watching the cash register and WOLVERINE is tanking. It's highly unlikely there will be another WOLVERINE-only movie. That doesn't mean there won't be another X-MEN ORIGINS movie (Magneto is supposedly being prepped) and that doesn't mean the character of Wolverine won't show up in another movie (perhaps an X4 if one ever happens), but this series appears to be one-and-done.


Wed May 13, 2009 11:52 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
James Berardinelli wrote:
yurymetelski wrote:
Great article. One point I have to disagree on is regarding Wolverine. It looks like they will do the sequel based on the money they already collected:

http://www.imdb.com/news/ni0773283/


You're basing this on a WENN article? (Perhaps the most notoriously inaccurate entertainment website to have a veneer of legitimacy.) And even this article only cites a quote by Jackman. I'm sure he'd like to do another one, but Fox is watching the cash register and WOLVERINE is tanking. It's highly unlikely there will be another WOLVERINE-only movie. That doesn't mean there won't be another X-MEN ORIGINS movie (Magneto is supposedly being prepped) and that doesn't mean the character of Wolverine won't show up in another movie (perhaps an X4 if one ever happens), but this series appears to be one-and-done.


I'm wondering, how much overseas box office and DVD sales influence the decision to make a sequel. If, hypothetically, a film would fail in the U.S. but become a major success overseas or on DVD, would the studio still want to make a sequel?

I think a Wolverine-only sequel is unlikely, because the character as interpreted in the comic books and beloved by his fans suggests R-rated material. A "neutered" Wolverine will not appease the fans and the character does not have the mainstream name recognition as, say, Spiderman.


Wed May 13, 2009 12:25 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
Unke wrote:
I'm wondering, how much overseas box office and DVD sales influence the decision to make a sequel. If, hypothetically, a film would fail in the U.S. but become a major success overseas or on DVD, would the studio still want to make a sequel?


A dollar's a dollar, the world around. If WOLVERINE blew the lid off the box office overseas but failed domestically, it would likely result in a sequel. TROY, for example, was hugely successful outside of North America, but a flop in the U.S. and Canada. It was never in line for a sequel, but it is generally viewed as being a success.

Generally speaking, a movie must gross between 2.0 and 2.5 times its budget in order to be considered financially successful. WOLVERINE is rumored to have cost in the neighborhood of $150 million, so it would need to make between $300 million and $375 million to "break even." It will probably get there - barely.

Interestingly, STAR TREK is rumored to have cost a little less (about $130 million). So it would need to make about $260 million to $325 million to break even. Considering how strongly it is holding up after its first weekend, it should be able to make those numbers, even though its domestic gross will represent about 60% of its worldwide total (as opposed to 50% for WOLVERINE).

By the way, judging by Monday and Tuesday, STAR TREK may have the kind of staying power that movie studios dream of, and will likely end up not being a one-week wonder. That's the power of good reviews and strong word-of-mouth. They don't impact the opening weekend much but they play a strong part in whether a film has legs.


Wed May 13, 2009 4:15 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
James Berardinelli wrote:
Unke wrote:
I'm wondering, how much overseas box office and DVD sales influence the decision to make a sequel. If, hypothetically, a film would fail in the U.S. but become a major success overseas or on DVD, would the studio still want to make a sequel?


A dollar's a dollar, the world around. If WOLVERINE blew the lid off the box office overseas but failed domestically, it would likely result in a sequel. TROY, for example, was hugely successful outside of North America, but a flop in the U.S. and Canada. It was never in line for a sequel, but it is generally viewed as being a success.

Generally speaking, a movie must gross between 2.0 and 2.5 times its budget in order to be considered financially successful. WOLVERINE is rumored to have cost in the neighborhood of $150 million, so it would need to make between $300 million and $375 million to "break even." It will probably get there - barely.

Interestingly, STAR TREK is rumored to have cost a little less (about $130 million). So it would need to make about $260 million to $325 million to break even. Considering how strongly it is holding up after its first weekend, it should be able to make those numbers, even though its domestic gross will represent about 60% of its worldwide total (as opposed to 50% for WOLVERINE).

By the way, judging by Monday and Tuesday, STAR TREK may have the kind of staying power that movie studios dream of, and will likely end up not being a one-week wonder. That's the power of good reviews and strong word-of-mouth. They don't impact the opening weekend much but they play a strong part in whether a film has legs.


Thanks, very informative.

By the way, are these budgets normal for special effect-driven movies these days? Spending $ 150 mio. for Wolverine seems like an awful lot. I seem to remember how it made the news when a film cost over $ 100 mio., because it was considered excessive.


Thu May 14, 2009 3:36 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
Unke wrote:
By the way, are these budgets normal for special effect-driven movies these days? Spending $ 150 mio. for Wolverine seems like an awful lot. I seem to remember how it made the news when a film cost over $ 100 mio., because it was considered excessive.


The average budget for a major "tent pole" summer release ranges between about $120 million and $180 million.


Thu May 14, 2009 9:21 am
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Post Re: May 07, 2009: "Hollywood Economics 101"
After three weeks Star Trek has $190 million (and made nearly $22 million in its third weekend). Looks like $210 million should be easily doable.


Mon May 25, 2009 12:59 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
jksander wrote:
After three weeks Star Trek has $190 million (and made nearly $22 million in its third weekend). Looks like $210 million should be easily doable.


Paramount is currently hoping for about $250 million total domestic, and about $120 million total non-domestic. That would put the movie at the break-even point exclusively from theatrical gross, meaning that all other revenue (DVD, TV, etc.) will be "gravy."

I think $250 million may be a little on the generous side. Looks more like $230-$240 million to me.


Mon May 25, 2009 6:18 pm
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Post Re: May 07, 2009: "Hollywood Economics 101"
That just depends on how it does heading into June ... if the film stays in the top ten through June, $250M should be doable ... and I'm still skeptical about most of the "big" June releases anyway. But you may be right ... even then, $230 to $240M would be pretty solid, and DVD sales should be big come Christmas.


Mon May 25, 2009 7:40 pm
Post Re: May 07, 2009: "Hollywood Economics 101"
"Star Trek," a Paramount issue, also showed staying power, finishing fifth for the weekend in its fifth week of release. It brought in $8.4 million. Its cumulative total stands at $223 million.



I think that makes $250M seem more possible. I was also pleased that Up had a great second week and that Land of the Lost tanked ;)


Sun Jun 07, 2009 4:43 pm
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