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D&D: Honor Among Thieves Director/Cast Interviews begin as marketing ramps up!
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<blockquote data-quote="Snarf Zagyg" data-source="post: 8954606" data-attributes="member: 7023840"><p>On this, it is <em>notoriously</em> complicated to understand if a movie makes money.</p><p></p><p>The reason why is two-fold.</p><p></p><p>A. There is so-called "Hollywood Accounting" ("HA"). HA is just a slightly-more extreme version of regular accounting, but the general idea is that any movie, no matter how successful, will rarely record a "net profit." Basically (and <em>very simplified</em>), studios form a number of different companies (and SPEs) and allocate various revenues and charges among them in order to zero out profits (tax reasons). That's why you have the old saw that you never want to be a profit participant in a Hollywood production - always go for the gross points. </p><p></p><p>B. Then there is the issue with understanding the basic numbers. First, you have to assume the reported budget is accurate; it's usually <em>fairly accurate, </em>but there are reasons why studios will want it underreported. Taking <em>Batman v. Superman</em> as an example, it had a reported budget of $250 million, but apparently this involved some creative accounting and had an "actual" budget of well over $325 million. </p><p></p><p>Next, there is the distribution and marketing costs; the rule of thumb is that this tends to be an addition 50%- so, for example, a $100 million film is assumed to actually cost $150 million when you take that into account. However, that's just a rule of thumb; generally lower-budget movies are less, and higher-budget movies are more. A movie like <em>Batman v. Superman</em> might have close to a 100% additional cost for marketing and distribution (it was reportedly claimed to be $160 million, and reported at over $200 million). </p><p></p><p>Finally, there is the issue of box office. The studio doesn't get the entire cut of the box office, but instead get a percentage. A higher percentage for domestic than for international. Numbers vary, but 50% domestic and 35% international isn't a bad place to start (different studios and properties have different bargaining power). </p><p></p><p>So when you put all of that together, you often have confusion. So to use the<em> Batman v. Superman</em> example again (because it's been reported about so extensively), you can have reputable sources saying everything from the movie made a "$300 million profit" to a "$100 million profit" to "it barely broke even" to "it lost money on theatrical release." </p><p></p><p>Of course, all of this is just on first pass. Yes, movies will make the majority of their money from the box office, but then there is the fact that there is now a property that can be sold in the future - maybe there isn't the lucrative DVD market, but there will still be a recurring revenue stream from the movie. Not to mention any other deals (product placement?) during the movie and associated advertisements, or toys. </p><p></p><p>Yeah- it's complicated.</p></blockquote><p></p>
[QUOTE="Snarf Zagyg, post: 8954606, member: 7023840"] On this, it is [I]notoriously[/I] complicated to understand if a movie makes money. The reason why is two-fold. A. There is so-called "Hollywood Accounting" ("HA"). HA is just a slightly-more extreme version of regular accounting, but the general idea is that any movie, no matter how successful, will rarely record a "net profit." Basically (and [I]very simplified[/I]), studios form a number of different companies (and SPEs) and allocate various revenues and charges among them in order to zero out profits (tax reasons). That's why you have the old saw that you never want to be a profit participant in a Hollywood production - always go for the gross points. B. Then there is the issue with understanding the basic numbers. First, you have to assume the reported budget is accurate; it's usually [I]fairly accurate, [/I]but there are reasons why studios will want it underreported. Taking [I]Batman v. Superman[/I] as an example, it had a reported budget of $250 million, but apparently this involved some creative accounting and had an "actual" budget of well over $325 million. Next, there is the distribution and marketing costs; the rule of thumb is that this tends to be an addition 50%- so, for example, a $100 million film is assumed to actually cost $150 million when you take that into account. However, that's just a rule of thumb; generally lower-budget movies are less, and higher-budget movies are more. A movie like [I]Batman v. Superman[/I] might have close to a 100% additional cost for marketing and distribution (it was reportedly claimed to be $160 million, and reported at over $200 million). Finally, there is the issue of box office. The studio doesn't get the entire cut of the box office, but instead get a percentage. A higher percentage for domestic than for international. Numbers vary, but 50% domestic and 35% international isn't a bad place to start (different studios and properties have different bargaining power). So when you put all of that together, you often have confusion. So to use the[I] Batman v. Superman[/I] example again (because it's been reported about so extensively), you can have reputable sources saying everything from the movie made a "$300 million profit" to a "$100 million profit" to "it barely broke even" to "it lost money on theatrical release." Of course, all of this is just on first pass. Yes, movies will make the majority of their money from the box office, but then there is the fact that there is now a property that can be sold in the future - maybe there isn't the lucrative DVD market, but there will still be a recurring revenue stream from the movie. Not to mention any other deals (product placement?) during the movie and associated advertisements, or toys. Yeah- it's complicated. [/QUOTE]
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