How Movies Make Money, Or Don't, As the Case May Be

A lot of people seem to think that a movie studio gets 100% of the box-office revenue associated with a given movie. Critical Drinker sets the record straight, and has a few things to say about the upcoming Indiana Jones movie (so called).

Movies are too expensive, now approaching an order of magnitude too expensive. The upcoming Indiana Jones movie has an admitted budget of $295 million. Some people say that it is actually much higher. For context (as Drinker says) The original Raiders of the Lost Ark movie cost $20 million, or $60 million in today's money, if you adjust for inflation. As Drinker asks, do you think that the $295 million movie will be better, or more fondly remembered, than that $60 million movie? I think I know what will happen. The new movie will be completely forgotten, or only remembered as what you should not do, when making a movie. Why? Because everything I've seen about it, from trailers, and clips, to reviews, indicates that it is awful. The original movie was fantastic, which is why it is a beloved classic.

But anyway, on to how box-office revenue is distributed among all the players, and why having mountains of cash tied up in a "summer blockbuster" makes movie studio executives nervous, and how that nervousness is translated into reality.

A good rule of thumb is that studios get approximately 50% of box office revenue. In North America they get a bit more than 50% and in most of the rest of the world they get a bit less than 50%. 55% and 45% respectively are the numbers I usually see. Except for China, in which the studios get about 25% of the box office. All of that goes some way toward explaining why movies that cost $150 million or more to produce, before any marketing is done, are such problems for the studios.

How this manifests is that they start interfering with the production, demanding changes and re-shoots to cater to their constantly changing ideas, altering and polluting the artistic vision while it's still being crafted. I mean, look at Justice League if you want an extreme example of how badly this shit can go wrong. Either way though, these unplanned changes inevitably slow down production, adding to the time and costs involved, which in turn drives up the budget, and in increases the anxiety of the studio executive even more. It becomes a kind of self-fulfilling bullshit loop, where their own overspending causes them to start meddling in things they don't really understand.

This is Critical Drinker's video Indiana Jones - Destined To Flop