Box Office Analysis

Eric Boellner

Eric Boellner

Well-known member
NOTE: Too Long; Didn't Read version at the bottom.



I can spend hours just poring over Box Office Mojo, comparing one film to another, one franchise to the next, etc. But most of that is only applicable in headspace, in theory. The following is about two hours of work on BOM and an Excel doc I made. The point is to compare Hollywood's formula from the '00-'10 decade with the '11-'13 formula that seems to indicate a direct departure from the old ways of building a blockbuster franchise. I'll include my personal thoughts on the stats after.

THE FRANCHISES.

I compiled box office data from 14 franchises that played out primarily over the 2000-2010 period (some first films were as early as '99, and several 3rd installments, such as Iron Man 3 and the 3rd Batman film, were released after 2010). Some of these franchises had more than 3 films (read: Harry Potter), but for the sake of brevity, I only included the first 3 films in the franchise (or the most relevant 3; see the note regarding the Fast & Furious franchise). These franchises are the ones that stood out as the most influential, while maintaining similarities for the sake of comparison. The franchises that were taken into account:

Pirates of the Caribbean
Transformers
Batman
Bourne
Bond/007
Iron Man
Fast & Furious
Harry Potter
Hangover
Matrix
Spider-man
Twilight
X-men
Star Wars


THE CUTTING LINE.

There are some franchises that didn't make the cut of this comparison for different reasons. A quick list of relevant franchises that were left out, and why:

The Lord of the Rings: While some of the other franchises could easily be considered distinct trilogies (Spider-man, Batman, Star Wars), the Lord of the Rings lacks one similarity that all of the other films have: the second and third installments were filmed separate from the first. LOTR, because it was all filmed at the same time, is really more like one film split into three installments, than an actual franchise built from the ground up.

The Chronicles of Narnia: This franchise was omitted because it's actually a much better example of the kind of thinking that has led to the mega-budget failed franchises of the '11-'13 era than the franchise-building formula that was followed by the Big Six through the '00-'10 period. Some thoughts on this one later.

THE STATS.

Finally, the long-awaited statistics. First, I'll give the stats for these franchises, and then below that, I'll give the stats for a number of franchise attempts made in the years since.

All numbers are in millions of dollars. Percent change is in parenthesis in the following formula: "(% Change from previous film/Percent change from first film)"

Film #1

AVG BUDGET: $101
AVG DOMESTIC: $251
AVG GLOBAL: $555
DOM. PROFIT RATIO: 2.48
GLOBAL PROFIT RATIO: 5.49

Film #2

AVG BUDGET: $140 (+38%)
AVG DOMESTIC: $294 (+17%)
AVG GLOBAL: $670 (20%)
DOM. PROFIT RATIO: 2.09 (-16%)
GLOBAL PROFIT RATIO: 4.77 (-13%)

Film #3

AVG BUDGET: $169 (+20%/+67%)
AVG DOMESTIC: $282 (-4%/+12%)
AVG GLOBAL: $768 (+14%/+38%)
DOM. PROFIT RATIO: 1.66 (-20%/-33%)
GLOBAL PROFIT RATIO: 4.53 (-5%/-17%)

FRANCHISE TOTALS:
BUDGET: $5400
DOMESTIC: $10,773
GLOBAL: $25,289
DOM. PROFIT RATIO: 1.99
GLOBAL PROFIT RATIO: 4.68

Now, a quick look at Hollywood's recent attempts to start franchises (including Walden Media's attempt to launch the Narnia franchise, which falls directly in line with Hollywood's new frontloading formula, so is included). These stats only refer to the first film as most of these films failed to launch franchises, or else have not yet released a second film.

Films included: Narnia, Green Lantern, Lone Ranger, Man of Steel, Amazing Spider-man, John Carter, Prince of Persia.

AVG BUDGET: $214
AVG DOMESTIC: $171
AVG GLOBAL: $445
AVG DOMESTIC PROFIT RATIO: 0.81
AVG GLOBAL PROFIT RATIO: 2.11

Some might take issue with the fact that I included seemingly successful films like Man of Steel and The Amazing Spider-man -- films which have actually launched franchises, with sequels to come out in the next few years -- with obvious bombs like John Carter and Lone Ranger. But the fact is, because of their massive budgets, these films are less profitable than the least profitable films (Film #3) in the franchises of 2000-2010.

3rd Installment profit ratios for '00-'10:
AVG DOMESTIC: 1.66
AVG GLOBAL: 4.53

Man of Steel
DOMESTIC: 1.26
GLOBAL: 2.82

The Amazing Spider-man
DOMESTIC: 1.13
GLOBAL: 3.26

----------------------------------------

THE TOO LONG; DIDN'T READ VERSION...

Long story short, Hollywood used to follow a formula for building franchises that was very successful in making those franchises extremely profitable (which is different from merely successful, where the bar is lower).

Studios would keep costs down on the first film, and once that film was either accepted/rejected by audiences and critics, THEN and only THEN would the big money come out. While box office today is bigger than ever, only the most successful "new" films (The Avengers, Avatar, etc.) are really making the best of it.

Hollywood's new formula is to spend hundreds of millions on the FIRST film in the hopes that it will spawn a franchise. Simply put, this shows a heavy desperation on Hollywood's part to launch new franchises, but they're abandoning the tried-and-true methods of the past decade, and THAT, I would say, is the reason for this much-talked-about streak of bombs and disappointments.

Hollywood's two newest franchises, as mentioned in the stats just above, are far less profitable in their VERY FIRST FILMS (which traditionally have had the highest profit ratios) than the THIRD films of franchises built with the old model.

The global profitability of these new films is 40% lower than the first films of franchises built under the old model.

Just a thought. A very, very long thought. <grin>

-EMB
 
Eric Boellner said:
Hollywood's new formula is to spend hundreds of millions on the FIRST film in the hopes that it will spawn a franchise. Simply put, this shows a heavy desperation on Hollywood's part to launch new franchises, but they're abandoning the tried-and-true methods of the past decade, and THAT, I would say, is the reason for this much-talked-about streak of bombs and disappointments.
Click to expand...

"The enemy of art is the absence of limitations" -- Orson Welles
 
Bruce Watson said:
"The enemy of art is the absence of limitations" -- Orson Welles
Click to expand...

I don't think it's just about movies being "bad," as the quality of films has more or less stayed the same over the past decade as far as franchises go. While some of these newer franchise attempts received poor ratings from critics and/or audiences, generally speaking I don't think that's the reason they were such massive bombs. That's because the budgets were so high, it was impossible to ever make it a success. John Carter was a mess of a film, but it wasn't awful. Neither was Lone Ranger. And the main point I'm trying to make is that new franchise starters that ARE considered successful cost much more, and made much less than did the franchise starters of 2000-2010.

Example:
Spider-man (2002): cost $139m, grossed $403m domestic, $821m globally.
Transformers: cost $150, $319 domestic, $709 global
Pirates: cost $140, $305 domestic, $654 global

And on the other hand, you have...
The Amazing Spider-man: cost $230, $262 domestic, $752 global
Man of Steel: cost $225, $285 domestic, $635 global

If anyone's wondering what the reason is for this streak of box office disappointments, it's not bad movies. Bad movies make big money (Transformers, duh...). It's bad formula. Bad formula, and bad odds.

-EMB
 
Eric Boellner said:
Example:
Spider-man (2002): cost $139m, grossed $403m domestic, $821m globally.
Transformers: cost $150, $319 domestic, $709 global
Pirates: cost $140, $305 domestic, $654 global

And on the other hand, you have...
The Amazing Spider-man: cost $230, $262 domestic, $752 global
Man of Steel: cost $225, $285 domestic, $635 global

If anyone's wondering what the reason is for this streak of box office disappointments, it's not bad movies. Bad movies make big money (Transformers, duh...). It's bad formula. Bad formula, and bad odds.

-EMB
Click to expand...

What to me is 'ironic', is that since CGI plays an important part of filmmaking these days, and given the 'vast' improvements, why the film budgets for the second decade are 'half again as much' or so, the early 2000 films.

When one looks at the CGI industry... we have houses going bankrupt right and left, ostensibly due to off shore competition or being 'pressured' to lower prices, to the point of going broke...

One would expect... CGI improvements correspond to 'cheaper prices' for services... thus 'cost savings' on budget... Further some of these new franchises do not have big bux stars as their leads... (Like "Iron Sky"(2012) with 7-8M euro budget... and 'heavy' CGI usage...).

So... where is the budget going...
 
j1clark@ucsd.edu said:
One would expect... CGI improvements correspond to 'cheaper prices' for services... thus 'cost savings' on budget... Further some of these new franchises do not have big bux stars as their leads... (Like "Iron Sky"(2012) with 7-8M euro budget... and 'heavy' CGI usage...).

So... where is the budget going...
Click to expand...

Definitely a good question. POTC: At World's End has the largest reported budget in history on BOM, at $300mil (despite reports and rumors that Avatar's budget was over $300mil, the reported budget is $237mil). A lot of this is VFX budget, but a lot of it was also having a massive amount of the production taking place on water, something that itself racks up budget and production problems like nobody's business.

You would think advances in VFX tech would make it cheaper, but maybe it doesn't work the same way for VFX as it does for other technologies, like iPods and memory cards. Maybe the advances just make it more "realistic," or at least more detailed, as seen in films like Man of Steel and Transformers 3, where massive amounts of destruction are hard to critique as VFX shots in and of themselves, even if they serve arguably no point to the story.

-EMB

Part of it could be that the VFX houses who ARE getting the jobs (ILM, Weta Digital) are charging star-rate salaries for their work, and maybe fewer people are getting paid millions more? I don't have much of an insight into the VFX side of things, but that's my happily ignorant theory...
 
Eric Boellner said:
I don't think it's just about movies being "bad," as the quality of films has more or less stayed the same over the past decade as far as franchises go. While some of these newer franchise attempts received poor ratings from critics and/or audiences, generally speaking I don't think that's the reason they were such massive bombs.
Click to expand...

I didn't say they were "bad". Actually, I didn't say anything at all.

My point is that limitations force the people behind a movie to make choices. Along the lines of "just how important is this to the telling of the story?" This forces editing the story down to the bare bones in pre-production, during the story-boarding stage. It makes the director justify every scene. Which, IMHO, is the way movies should be made anyway.

Case in point, look at what a nice film Lucas made with Star Wars way back in 1976-ish. IMDB says he had a budget of $11M. He did what he had to do to tell the story, and little more. Because he didn't have the money for any more.

By the time he got to the third film, he had enough budget to do most anything he wanted. And it showed. Unfortunately. Because he wasn't budget constrained, he wasn't effects constrained. Some of his space battle footage was just an amazing waste of effort, because it was there just to be there. It didn't really advance the story, but Lucas was obsessed (so he says) with trying to find out just how much visual stuff he could throw at the viewer.

The next three films were bad in all sorts of ways, in large part because of excess budget. All I gotta say is Jar Jar Binks. If he'd had a restricted budget, would Jar Jar have made the cut? Just sayin'.
 
Bruce Watson said:
I didn't say they were "bad". Actually, I didn't say anything at all.

My point is that limitations force the people behind a movie to make choices. Along the lines of "just how important is this to the telling of the story?" This forces editing the story down to the bare bones in pre-production, during the story-boarding stage. It makes the director justify every scene. Which, IMHO, is the way movies should be made anyway.

Case in point, look at what a nice film Lucas made with Star Wars way back in 1976-ish. IMDB says he had a budget of $11M. He did what he had to do to tell the story, and little more. Because he didn't have the money for any more.

By the time he got to the third film, he had enough budget to do most anything he wanted. And it showed. Unfortunately. Because he wasn't budget constrained, he wasn't effects constrained. Some of his space battle footage was just an amazing waste of effort, because it was there just to be there. It didn't really advance the story, but Lucas was obsessed (so he says) with trying to find out just how much visual stuff he could throw at the viewer.

The next three films were bad in all sorts of ways, in large part because of excess budget. All I gotta say is Jar Jar Binks. If he'd had a restricted budget, would Jar Jar have made the cut? Just sayin'.
Click to expand...

I knew you weren't trying to say that, but that's a common thought in this topic area, that if movies were just "better," they would all be box office successes.

For what it's worth, the three SW prequels have some of the lowest budgets of any "big-budget" blockbuster franchise in the past decade, especially for a sci-fi franchise. Among the 14 franchises I compared, SW was consistently and easily the most profitable among the films with budgets over $100mil.

-EMB
 
Bruce Watson said:
Case in point, look at what a nice film Lucas made with Star Wars way back in 1976-ish. IMDB says he had a budget of $11M. He did what he had to do to tell the story, and little more. Because he didn't have the money for any more.
Click to expand...

The problem with this sort of 'thinking' is, in terms of Sci-Fi, there has been an expectation of more recent production == more 'realism', despite being 'sci-fi'... so, in the 50's one could 'willingly suspend disbelief'(ok... maybe only those couples who were in the backseat of the jalopy at the drivein... and never saw the actual film at all...) on a rocket whose 'smoke tail' tends to float 'up'... as in 'not in space at all'... we in the modern age would not sit in the theater seat 10 seconds for such an effort... unless it was supposed to be a spoof...

But I've been impressed with the efforts of the makers of "Sky Captain and the World of Tomorrow"(2004) and as mentioned "Iron Sky"(2012), which for their budgets had pretty good CGI effects.

But of course those films did not have the billion dollar marketing machines behind them...

At this point, I'm pretty impressed with "Star Wars XXX: A Porn Parody"(2012)... for what it is...

Star-Wars-Porn-Parody-6.jpeg
 
If VFX are driving budgets up there is a day of reckoning coming......

Non VFX intense films are generating handsome returns e.g "The Heat" for not a lot of production dollars. Whilst VFX films crash & burn with huge budgets. Having seen "Lone Ranger' , which I quite liked on its own terms, where did the money go for that ?. The VFX whilst good did not look "real" in anyway shape or form unless you where basing it on Disney world (maybe that was the intent). The truth of the matter is, audiences are becoming jaded with "the effects movie" except maybe 13 year old boys . How many mega explosions does the world need , how many times do we need to see the superhero emerging from it unscathed ?

So the question is... in a highly adaptive marketplace founded on giving the audience "what they want" do you really think future Producers haven't noticed the trend ?
 
http://www.hollywoodreporter.com/news/why-life-pi-titanic-vfx-426182


"VFX budgets are by far the largest line item on tentpole budgets, at times pushing $100 million. Studios, under pressure to lower costs, attack the biggest number in the budget assuming there is waste or too much profit. So while there are only 20 or so facilities that do world-class work, what should be a seller's market is a buyer's market. "

Also, VFX is not like electronics. Having better software and cheaper/faster computers does not mean the labor gets cheaper, which is the major cost.
 
Paul F said:
http://www.hollywoodreporter.com/news/why-life-pi-titanic-vfx-426182


"VFX budgets are by far the largest line item on tentpole budgets, at times pushing $100 million. Studios, under pressure to lower costs, attack the biggest number in the budget assuming there is waste or too much profit. So while there are only 20 or so facilities that do world-class work, what should be a seller's market is a buyer's market. "

Also, VFX is not like electronics. Having better software and cheaper/faster computers does not mean the labor gets cheaper, which is the major cost.
Click to expand...

Labor does get cheaper if there's more supply of well trained FX artists and there should be more and more of them as people learn the software and get good at it, whether that's at some school or on their own, or on the job.
 
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Yes, that is true, but it doesn't follow Moore's law. It get's factored in by moving a lot of the grunt work to global locations and that does help a lot. But once you've hit bottom on labor costs, it doesn't continually decrease like electronics does. In fact, it is a constant battle to hold the line. As each new location becomes expert, and each company sets up shop in a location, a group of expert labor develops, and then they start demanding better wages because of competition to keep them.
 
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