Monday, July 28, 2008

Being Serious About Batman Box Office Revenue

It's interesting to me to see the media hype up the record setting box office take that Batman: The Dark Knight has generated in a short ten days worldwide ... but just to give the movie a bit of reality numbers-wise:

Domestic: $314,245,000 88.4%
+ Foreign: $41,300,000 11.6%
= Worldwide: $355,545,000

The Dark Knight STILL hasn't made its money back that it cost to produce. The movie cost a very high and out of control $185 million to make. Box Offices are pretty much divided 50/50 between the studios and movie theater chains. That means that The Dark Knight must make $370 million before it makes its money back.

If adjusted for inflation the 1989 Tim Burton version of Batman gross was $445.7 million ($255.1 actual) but only cost $35 million to make or an inflation adjusted $67 million.

Batman: The Dark Knight will have to make $1.25 BILLION worldwide to generate the same return the 1989 version gave Warner Brothers.

Take into account that movie ticket inflation has also been very high (around 20%) over the past two years. The average ticket price in 1989 was $5.75 - now it's $10.20. The Dark Knight is also showing in more expensive IMAX theaters - which have a premium ticket charge as well.


Paul Douglas said...

I get what you're saying but it's still a hugely popular movie. The massive production cost issue is industry-wide.

Plus, they have Blu-Ray and DVD sales yet to come - and the theatre run isn't yet over.

Jeremy Ryan Carr said...

The split between the theaters and the studios is nowhere near 50%. It is always a back loaded deal for theaters. Its more like 80/20 for the first few weeks and gradually over the run of the film it can swap to the theaters advantage. That's why theaters don't want you bringing in outside food. They make most of their profits off of concessions. That's also why theaters love films like My Big Fat Greek Wedding. Something that builds slowly and is then a huge hit late in its run.

FYT said...

It is ... and it's amazing how well its doing.

Movie costs are out of control though - mostly due to special effects costs.

But another point. Batman (1989) made it's budget back in 10 days - interestingly enough because it had some buzz due to Prince being attached to it.

My question is - are people going to see this because they've heard from friends that it's a great movie or are they bandwagoning to be part of a statistic or going to see because it's gotten a lot of media attention.

The Matrix did very poorly opening night as did Shawshank Redemption - the next day the box office boomed for them both.

I always ask myself - would this movie be considered for an AFI Top 100 spot. On this movie - I'd say no.

FYT said...

You are incorrect and right at the same time ...

It is backloaded for the first few weeks - but it averages out to be 50/50 over the life of the movie at the box office.

A movie MUST make back double the amount it costs to break even - the only exceptions are independently produced or independently distributed films.

Theater chains also get money for previews and I know all this FROM SEEING the books at a theater first hand.

Anonymous said...

I have a friend that owns a theatre. A few years ago someone stole a star wars film reel. I thought that was kinda fishy, films must weigh a ton, right? Well I asked my friend about it. He told me a few interesting things. First, star wars was on 6 reels. Each reel weighs as much as an average man. And, it costs so much to rent the films, that he makes no money from ticket sales. Profit is entirely concessions. It's not a small theatre, he owns a major theatre with 14 screens.

FYT said...

Its interesting that you mention Star Wars because Revenge Of The Sith is actually a good example of how movie theater chains are actually making more money.

Starting right around the time Star Wars Prequel Episode III came out movies were being offered in 3 formats reels, hard drives, and satellite downloads.

The same theater where I get my 50/50 figure from is an independent theater with 4 screens that rotates 6 movies each night. They charge $9.50 per ticket. About a year ago I spoke with this owner to see if he was interested in opening a theater up to show television shows in the theater and possibly open up a drive in theater. We discussed how much profit he makes per movie. He has been the owner of a large theater chain and now owns his own independent movie theater near me. He has worked for AMC and Regal. He explained it like this:

Upon initial release for the first 10 days of a movie the box office is split 80/20 in favor of the studio. For the next 10 days it is split 60/40 in favor of the studio. For the next 10 days the split is 50/50. For the next 10 days and usually a films final week in theaters the split is 30/70 in favor of the theater.

If a movie makes it to almost 2 months in theaters the split goes to 20/80 for the remainder of the film's time at the theater.

For most films - this ends up being a 50/50 split over the entire run of the movie.

The theater then has the option to sell the movie to another theater for up to 75% of the cost to obtain it from the distributor (like Warner Bros). Some theaters will rent the reel out to other theaters like discount movie houses - while others will keep a reel/movie (especially children's movies) to show for a Kids weekend.

Furthermore, archive houses buy the reels/movies back to rent it out at a later date or to provide paid archive use for news/research/education use.

For the past year, movie cost to theaters have gone down dramatically because of the much lower cost it is to get a movie.

Most Regal Cinemas get movies in on BluRay, HD DVD, a pair of hard drives, or they download it from a secure satellite connection. Very few films are coming on reels these days.

As for the concessions - yes they are a big profit margin, but they simply don't sell the volume of concessions that they use to, plus prices for concessions have gone up dramatically at a wholesale level.

Also take into account theaters OTHER revenue streams like Fantom Live events (Miley Cyrus concerts, the MET opera performances) and classic movies (I've seen Poltergeist advertised for a horror weekend) Plus you have corporate meeting/presentation bookings.

These events are split somewhere around 25/75 in favor of the theater.