A Spirited Perfect Ten

[lazyboy97o]

Based on what was TFA only profitable after $1B?

Box office gross doesn't all go to the studio (half is the usual rough estimate) and the film and marketing cost hundreds of millions of dollars.

 

[indyumd]

Box office gross doesn't all go to the studio and the film and marketing cost hundreds of millions of dollars.

The figure I've seen is that production and marketing for the film cost $350M.

As a side note, they had made a cool $3B on merchandise and licensing as well.

 

[Eoghann]

Box office gross doesn't all go to the studio (half is the usual rough estimate) and the film and marketing cost hundreds of millions of dollars.

Apparently Disney negotiated a better split for The Force Awakens. It's also hard to look at the movies in isolation any more because some of those marketing costs also boost the toy sales, book sales, comic sales etc.

 

[doctornick]

The big problem with Iger's film strategy is that more and more films need such high box office grosses. Ignoring the whole backend perpetual loss issue, Star Wars: The Force Awakens likely only started to become profitable for Disney after hitting $1 billion at the box office. That is an insane number, and while it was expected for this film can that sort of performance be sustained through the next five films? Disney is very much nearing the point where $1 billion at the box office will still be a loss.

Talk about a straw man that you are building up and then condemning Disney for it. Where is there any evidence that TFA "needed" $1B to become profitable? The movie had a $200M production budget and actually cost less in advertising than most blockbusters -- most of the advertising for the movie that were abundant was paid for by partners who licensed Star Wars, which means Disney actually made money while getting advertising for the film.

And that ignores that Star Wars has made such a massive amount in merch sales (and will make on subsequent DVD sales and the like) that the revenue of the movie in theaters in only part of the picture.

We can debate as to whether Disney'd "tent pole" strategy is a good one, but it seems to me that one of the big elements of it is that Disney films -- unlike many other blockbusters -- are very keen on diversifying the income sources, which makes them less dependent on box office receipts, not more.

 

[doctornick]

Box office gross doesn't all go to the studio (half is the usual rough estimate) and the film and marketing cost hundreds of millions of dollars.

From what I have read, the deals between studios and theaters typically results in a much higher percentage of ticket sales going to the studios in the first week or two (when the movie theaters generally make their money on concessions only) with much smaller percentage going to the studios (i.e. more going to the theaters) the longer a movie is around.

So, a movie like TFA which made a ridiculous amount in the opening weekend/week is likely to have garnered even more for the studio than the oft cited "half of the money goes to the studio". Plus, as already mentioned, Disney apparently negotiated even better than typical percentages with theaters based on the hype of the film.

Edit: here's a good article that talks about these aspects and specifically in regards to TFA.

 

[the.dreamfinder]

The figure I've seen is that production and marketing for the film cost $350M.

As a side note, they had made a cool $3B on merchandise and licensing as well.

But as with Box Office, they don't get to keep all of that.

 

[indyumd]

But as with Box Office, they don't get to keep all of that.

So?

 

[the.dreamfinder]

So?

Merchandise numbers can be just as misleading as box office figures.

 

[indyumd]

Merchandise numbers can be just as misleading as box office figures.

So you are saying that Disney takes such a small cut from that $3 billion dollars that they still needed to make $1B on the box office to break even? That's what this discussion is about.

 

[doctornick]

Merchandise numbers can be just as misleading as box office figures.

I would argue they are "incomplete" more than "misleading". The numbers in isolation lack the proper context and additional information for us to give any absolute statements.

That said, I would think that evaluating the numbers in relative terms is beneficial. The box office numbers for TFA are fantastic -- already the second highest domestic takes despite only being out for 2.5 weeks and close to being the 3rd highest worldwide despite not opening in China yet. The merchandise sales remain unbelievably high (IIRC Star Wars is either the highest or second merchandise producing franchise along with Disney Princesses). The production costs for TFA were high, but not unreasonable for a blockbuster of this sort.

So, either Star Wars has made a sizable profit or else virtually no high budget Hollywood film ever makes a profit. I think we can safely say the latter isn't the case since Hollywood continues to produce big budget "tent pole" films and seems to be making an ever increasing number of them.

Basically, we can safely say that TFA has made a huge profit already and it still has weeks of time to go in the theaters plus home video sales, additional merch, etc.

 

[PhotoDave219]

Are we really doing this?

 

[lazyboy97o]

The figure I've seen is that production and marketing for the film cost $350M.

As a side note, they had made a cool $3B on merchandise and licensing as well.

That would be domestic expenses, so the global box office wouldn't be the proper number to compare as there are global expenses.

Talk about a straw man that you are building up and then condemning Disney for it. Where is there any evidence that TFA "needed" $1B to become profitable? The movie had a $200M production budget and actually cost less in advertising than most blockbusters -- most of the advertising for the movie that were abundant was paid for by partners who licensed Star Wars, which means Disney actually made money while getting advertising for the film.

And that ignores that Star Wars has made such a massive amount in merch sales (and will make on subsequent DVD sales and the like) that the revenue of the movie in theaters in only part of the picture.

We can debate as to whether Disney'd "tent pole" strategy is a good one, but it seems to me that one of the big elements of it is that Disney films -- unlike many other blockbusters -- are very keen on diversifying the income sources, which makes them less dependent on box office receipts, not more.

Star Wars doesn't exist in a bubble outside of the tent pole strategy; it is Disney's biggest tent pole.

So you are saying that Disney takes such a small cut from that $3 billion dollars that they still needed to make $1B on the box office to break even? That's what this discussion is about.

That $3 billion estimate is Star Wars merchandise for 2015, so it is not just merchandise that will be directly tied to The Force Awakens.

 

[lazyboy97o]

Are we really doing this?

Since when is the tent pole strategy not on topic?

 

[indyumd]

Demonstrate some data/analysis/anything besides "I say so" that shows that The Force Awakens did not make a profit until after it had made $1B at the box office. Its a ludicrous statement and you can pick apart the mass amounts of money all you want but it doesn't make it true.3

 

[doctornick]

Star Wars doesn't exist in a bubble outside of the tent pole strategy; it is Disney's biggest tent pole.

Sure. You mean Disney's wildly successful tent pole strategy, right?

I'm still waiting for the evidence that TFA "needed" to make $1B at the box office just to break even. You know, the claim that you used to then chastise Disney's film strategy.

 

[PhotoDave219]

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[lazyboy97o]

Sure. You mean Disney's wildly successful tent pole strategy, right?

I'm still waiting for the evidence that TFA "needed" to make $1B at the box office just to break even. You know, the claim that you used to then chastise Disney's film strategy.

Demonstrate some data/analysis/anything besides "I say so" that shows that The Force Awakens did not make a profit until after it had made $1B at the box office. Its a ludicrous statement and you can pick apart the mass amounts of money all you want but it doesn't make it true.3

The basic expenses times two is all there is. If cost of film and domestic marketing are $350m then $350m x 2 = $700m, a point recently hit. Better deals means the actual point would have been sooner than $700m domestic, like maybe a week ago when the film hit $1 billion globally
Just doing the old double rule of thumb (which doesn't apply well to global box office), global marketing would only have to be an additional $150m on top of the $100m domestic for the total package to hit $500m.

 

[NearTheEars]

I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content" I will not click on "show ignored content"

Going through the same dilemma.

 

[indyumd]

The basic expenses times two is all there is. If cost of film and domestic marketing are $350m then $350m x 2 = $700m, a point recently hit. Better deals means the actual point would have been sooner than $700m domestic, like maybe a week ago when the film hit $1 billion globally
Just doing the old double rule of thumb (which doesn't apply well to global box office), global marketing would only have to be an additional $150m on top of the $100m domestic for the total package to hit $500m.

So you think Age of Ultron lost money for Disney?

 

[Cesar R M]

Based on what? The fact that you thought it was subpar? Any actual evidence Iger played any role in Age of Ultron?

Im using the same allegory as doctor mick used.
and ultron was definitively inferior to Avengers.