Disney (and others) at the Box Office - Current State of Affairs

[BrianLo]

It’s possible. But the “official” budget numbers (eg, Little Mermaid’s $250M) was a lowball even after the rebate was factored in. So it’s likely the actual and rebate-affected budget falls on the over.

Though recall that the UK numbers also include interest and overhead. Which the internet normally doesn’t earmark as “the budget” when comparing like for like. But it is all indirectly accounted for in the calculation.

For example the Marvels includes 50-ish million of interest and overhead and 55M in subsidy. But if you google the UK number it makes the budget look like 374M.

All of which is to say I expect the UK number to eventually look like 300M. If its well in excess than the 200M number was wrong.

 

[easyrowrdw]

David Croyé’s consulting and research firm JustWatch Media, which monitors trailer campaigns and moviegoing habits, found that weeks ago only 25 percent of people said they’d prefer to wait to see a summer movie on streaming, a healthy sign. In more recent days, however, that number shot up to more than 36 percent. He says this hits mid-size movies particularly hard, as well as being a major reason why the sheer number of people going to the cinema may never equal pre-COVID times.

“I don’t think the studio system will fill the gap that started from the pandemic,” says the founder and CEO of JustWatch. “It’s not as mass a market anymore. It’s about an even smaller group of people going to the movies more often. So there’s a lot more streaming and watching at home.”

Interesting. I wonder if it's because of the movies themselves (the big ones have already been released) or if they're responding to the quality of the movies that were released this summer. I wish the phrasing of the survey was a bit clearer.

 

[LSLS]

One interesting thing is that the numbers we've heard recently in general, the marketing costs for films seems to be a lot higher than the historic "half the budget" usually shows. I don't have an answer for what that number should be here, but it's something I've taken note of with the numbers we recently have seen (and because I've saw quite a lot of marketing for F4). I think the more important thing for this movie is that it builds to the Avenger film cause they CAN'T go out with a $600 million film there.

 

[DKampy]

One interesting thing is that the numbers we've heard recently in general, the marketing costs for films seems to be a lot higher than the historic "half the budget" usually shows. I don't have an answer for what that number should be here, but it's something I've taken note of with the numbers we recently have seen (and because I've saw quite a lot of marketing for F4). I think the more important thing for this movie is that it builds to the Avenger film cause they CAN'T go out with a $600 million film there.

Where do you see these reports of marketing budgets…. I have only seen estimates or guesses nothing definitive…. The only 1 I have seen confirmed reports from was Superman at 100…. And if anything would be more than half it is that film…. That marketing was everywhere

 

[coffeefan]

Interesting. I wonder if it's because of the movies themselves (the big ones have already been released) or if they're responding to the quality of the movies that were released this summer. I wish the phrasing of the survey was a bit clearer.

On the worldwide D+ chart, Thunderbolts is at #1 and the FF preview is at #2. So there is measurable interest, but like the article said, a significant number of people prefer to wait for streaming. This is for a variety of factors, including economic.

 

[LSLS]

Where do you see these reports of marketing budgets…. I have only seen estimates or guesses nothing definitive…. The only 1 I have seen confirmed reports from was Superman at 100…. And if anything would be more than half it is that film…. That marketing was everywhere

Right. Sorry, I didn't mean half the budget, I mean half times the budget. So the idea is you need to double the production cost (since you get half the ticket cost), and then times add another half to account for marketing budget. But multiplying by 0.5 is really a quarter of the production budget, not half. So for Superman, they had a $225 million budget. That times 2.5 would be $562.5 million. That extra 0.5 would be $112 million. BUT, remember, they aren't getting all of that $112.5 million, they also pull in half of that. So for the 2.5 times number to be correct, the Superman marketing would need to be closer to $56 million.

Put another way, they spent $225 million on production, and $100 million on marketing. That is $325 million. If they take 50% of each sale, the break even would be $650 million, not the $562 million from the calculation. At least that's my understanding of how these calculations work.

 

[TP2000]

Just an FYI and you may know this and others not, but Canada counts as “Domestic” box office. Distribution has been so highly integrated that it is treated as one movie economy.

View attachment 880887

Oh, I'd forgotten that factoid!

Looking at it from a financial standpoint on the size of the market, and I say this with my B.C. relatives looking down on me and as a general admirer of Canadian pop culture, it's probably done that way for simple convenience.

Canada has a current GDP of $2.3 Trillion and a population of 41 Million, or roughly a GDP about $500 Billion less than Texas with 2 Million more people than California. It's a reminder that the US box office market, with a current GDP of $30.5 Trillion and growing and a population of 325 Million, is incredibly massive and difficult to match globally without combining many countries or a continent or two.

Even within the US market there are wild discrepancies. California, for instance, is the most populous state with the highest state unemployment in the nation at 5.4% and an economy that is visibly struggling in its largest cities. But California's current weakness is papered over by the stronger state economies east of the Rockies. In short, California is a real drag on the overall US right now.

You could add Canada to this map as a state, but a state with 6.9% unemployment and a slightly shrinking economy, and it would temper the overall current strength of the overall US market a bit more. Just like California is already doing.

United States Economy at a Glance

www.bls.gov

 

[Disney Irish]

Right. Sorry, I didn't mean half the budget, I mean half times the budget. So the idea is you need to double the production cost (since you get half the ticket cost), and then times add another half to account for marketing budget. But multiplying by 0.5 is really a quarter of the production budget, not half. So for Superman, they had a $225 million budget. That times 2.5 would be $562.5 million. That extra 0.5 would be $112 million. BUT, remember, they aren't getting all of that $112.5 million, they also pull in half of that. So for the 2.5 times number to be correct, the Superman marketing would need to be closer to $56 million.

Put another way, they spent $225 million on production, and $100 million on marketing. That is $325 million. If they take 50% of each sale, the break even would be $650 million, not the $562 million from the calculation. At least that's my understanding of how these calculations work.

I'm sorry but what?

The idea with the 2.5x is that it takes the marketing out of the equation, because the marketing spend on a film isn't isolated to just theatrical. So for example to use your numbers, that $100M might not be all spent on marketing just for theatrical, only $75M might be and $25M spent on post-theatrical, or it could be more or less. But do you attribute that to your theatrical breakeven even if you aren't spending that for the theatrical space? No of course not, because that would require a higher box office than is needed to cover the theatrical spend. Its why we also don't account for the interest and overhead either. So the moral of the story is the .5 is to account for the marketing of the theatrical spend only.

This is what we tried to tell other posters here many times when they kept trying to state a specific marketing amount and use it for their calculation. We're finally back to everyone using the 2.5x rule of thumb metric, so lets not try to start this debate again.

 

[TP2000]

Right. Sorry, I didn't mean half the budget, I mean half times the budget. So the idea is you need to double the production cost (since you get half the ticket cost), and then times add another half to account for marketing budget. But multiplying by 0.5 is really a quarter of the production budget, not half. So for Superman, they had a $225 million budget. That times 2.5 would be $562.5 million. That extra 0.5 would be $112 million. BUT, remember, they aren't getting all of that $112.5 million, they also pull in half of that. So for the 2.5 times number to be correct, the Superman marketing would need to be closer to $56 million.

Put another way, they spent $225 million on production, and $100 million on marketing. That is $325 million. If they take 50% of each sale, the break even would be $650 million, not the $562 million from the calculation. At least that's my understanding of how these calculations work.

That's how the system I'd been using works, which we referred to as the Imperial system.

The Imperial system also accounts for different domestic/overseas box office performances with a 60% take of domestic box office and a 40% take of overseas box office. Plus an assumption that they spent 50% of the production budget on global marketing, unless a studio goes out of their way to brag that they spent more than 50% on marketing.

Disney did that most recently, when they bragged to the industry press that they'd spent $140 Million on global marketing for The Little Mermaid, against its production budget of $250 Million. So instead of giving it a marketing budget of $125 Million, it was tracked here in this thread with a marketing budget of $140 Million.

The difference in Metric vs. Imperial box office performance for that one is this...

Imperial System
$250 Production, $140 Marketing, $179 Domestic Take, $108 Overseas Take = $103 Million Loss

Metric System
$250 Production Times 2.5 Against Global Box Office Total, Divided By Half = $28 Million Loss

The Metric system almost always benefits the house er, the movie studios. But it doesn't track nuances in admitted marketing costs or the overseas/domestic box office split as accurately, it would seem to me.

‘Little Mermaid’ Swimming Against Strong Tides At Overseas Box Office, Leaving Break-Even In Question

In a rare situation for a Disney tentpole, particularly a live action title based on a treasured animated classic, 'The Little Mermaid' may lose money.

deadline.com

 

[Disney Irish]

The Metric system almost always benefits the house er, the movie studios.

The house always wins....

 

[BrianLo]

One interesting thing is that the numbers we've heard recently in general, the marketing costs for films seems to be a lot higher than the historic "half the budget" usually shows. I don't have an answer for what that number should be here, but it's something I've taken note of with the numbers we recently have seen (and because I've saw quite a lot of marketing for F4). I think the more important thing for this movie is that it builds to the Avenger film cause they CAN'T go out with a $600 million film there.

I also want to note 2.5X is not a calculation of true costs. It’s a coefficient that describes the relationship between what the studio reports to us as budget, box office receipts and studio profit when all the other factors under the hood (both unaccounted factors on the cost and earnings side) come together.

I don’t have a good calculation for marketing. It tends to start at 50% or 100M for the major studios tentpole releases - and whichever is higher. As the movie becomes more successful they continue to spend more, but that is recovered by the back end proportionally.

So something like Stitch or Minions will often approximate 100% because they are still marketed as big things. Likewise if the production budget is inappropriately excessive they try to contain marketing if they become anxious.

@TP2000 is also right that it falls apart at extremes, which I keep an eye out for. I did actually propose we needed a higher cut off on Stitch before we knew marketing.

 

[Disney Analyst]

 

[Disney Irish]

Then they’re screwed

Because when they start trying to
Charge you $100 a month for a streaming service…the cable cutters will return to cut their wifi and run to other content without the upfront fees.

Funny you mention this....

YouTube is now cracking down on password sharing too for their premium ad-free tier, not to mention adding another tier what they call "Premium Lite" which is a lower cost option.....

YouTube Premium Begins Netflix-Like Crackdown on Family Plan Sharing

Plan members must live in the same household to use your YouTube Family account.

www.pcmag.com

Introducing Premium Lite: Watch your favorite creators ad-free

YouTube Premium Lite offers ad-free viewing for $7.99/month. Learn about the new, affordable way to enjoy YouTube videos without interruptions.

blog.youtube

So even the days of "free" YouTube maybe coming to an end too....

Thanks @coffeefan for posting that first article in the other thread.

 

[Sirwalterraleigh]

Stop posting this nothing “influencer”…por favor?

They missed…no need for more glazing

 

[JackCH]

Stop posting this nothing “influencer”…por favor?

They missed…no need for more glazing

That was literally just the numbers?

 

[Sirwalterraleigh]

That was literally just the numbers?

You missed the FANTASTIC part, huh?
A million bucks

That was a lot of money in 1986

 

[JackCH]

You missed the FANTASTIC part, huh?
A million bucks

That was a lot of money in 1986

Dude does that on all of his posts and also updates when movies do poorly. I think you are getting snarky over nothing.

 

[Sirwalterraleigh]

Dude does that on all of his posts and also updates when movies do poorly. I think you are getting snarky over nothing.

He’s on Twitter and more power to him…

But he’s not posting here…it’s being cut and pasted over and over ONLY when it looks to be slightly pro Disney or throws shade at one of its competitors offerings…by the same person.

There’s so little to the veil it doesn’t even qualify as “thin”

I’m all for truth…this “narrative” isn’t it. Move on to Tron and take another swing

 

[Animaniac93-98]

Freakier Friday has already outgrossed Elio and is now just $5 million away from besting Snow White at the domestic box office

Who predicted that at the start of the year?

 

[Sirwalterraleigh]

Freakier Friday has already outgrossed Elio and is now just $5 million away from besting Snow White at the domestic box office

Who predicted that at the start of the year?

Everyone had it on the bingo card