Where does box office money actually go?

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October 05 2005

Where does box office money actually go? With all the talk about box office returns for Serenity I thought it would be a good idea for you to see what the box office numbers actually mean. Studios can possibly see less that 20% of the reported box office.

most interesting bit:

"Consider, for example, Touchstone's Gone in 60 Seconds, which had a $242 million box-office gross. From this impressive haul, the theaters kept $129.8 million and remitted the balance to Disney's distribution arm, Buena Vista. After paying mandatory trade dues to the MPAA, Buena Vista was left with $101.6 million. From this amount, it repaid the marketing expenses that had been advanced—$13 million for prints so the film could open in thousands of theatres; $10.2 million for the insurance, local taxes, custom clearances, and other logistical expenses; and $67.4 million for advertising. What remained of the nearly quarter-billion-dollar "gross" was a paltry $11 million. (And that figure does not account for the $103.3 million that Disney had paid to make the movie in the first place.)"

Rip2~~ | 03:12 CET | 7 comments total | tags:

That's a very interesting accounting. I knew the home entertainment market was taking over in terms of the income, but I never realized how much. Thanks for the link.

palehorse | October 05, 03:40 CET

That ignores the fact that Hollywood is infamous for "creative" accounting practices to hide income. I'd lay long odds that a lot more than 11 million of the 242 million ended up in investor's pockets.

rkayn | October 05, 05:29 CET

^^ even if it was $80 million, that is still fairly low considering the B.O.

Rip2~~ | October 05, 06:13 CET

While it's true that theatrical releases are little more than commercials for ancillary markets these days, all the movie execs I've ever encountered still care a lot about the box office.

What I love about DVD sales driving things more these days is that people want more quality movies to buy on DVD. It makes quality actually matter again.

Celluloid Novelist | October 05, 06:35 CET

And the hopes of a Serenity sequel look even greater...

Thanks for the insight, Rip2~~.

UnpluggedCrazy | October 05, 07:11 CET

Very interesting article, thanks for posting it!

Those movie execs still care about the box office because it's become part of a movie's promotional (if not intrinsic) value when you get to the ancillary markets. Anything that was #1 when it opened is more likely to attract the casual dvd/video renter or buyer and more likely to fetch top dollar amounts when they're sold for network and cable airings, and licensing fees for toys, games, tchotches, etc.

And while I'm sure creative accounting does figure into the equation, it's simply not that much compared to the cost of doing business on that kind of scale. Sure you'll have a gazillion producers credited (and paid big fees for very little work) because they were part of the development at some stage or other, but the very process of studio filmmaking is a bloated whale.

Universal's position is starting to look rosier when you consider that Serenity is bound to make a mint in all those ancillary markets. Hell, most major studio releases probably have higher advertising budgets than Serenity's entire production cost. The armchair box office analysts can spin it however they want, but it doesn't mean much since none of them have access to Universal's financial statements. It's clearly alot more complicated than most of us can ever know.

punkinpuss | October 05, 07:34 CET

Very interesting.
I always wondered how this things work.

Angel TheVampire | October 06, 02:05 CET

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