3 ms·

the film studios only see part of (I've heard ~50%) gross box office when taking theater operator's share out (+ cost to manufacture and distribute film reels,

by noilly 17y ago

the film studios only see part of (I've heard ~50%) gross box office when taking theater operator's share out (+ cost to manufacture and distribute film reels, etc). Plus Avatar cost >300 million to produce + >100 million marketing + James Cameron's share, etc. Film studios make most of the profit from accounting/tax tricks, dvd revenue, tv deals, etc.

waterlesscloud 17y ago
It's a sliding scale of box office gross that goes to the studios. Believe it or not, each film has its own deal, and there isn't really a standard amount. Bigger films can negotiate more for the distributor (studio) and less for the exhibitor (theater). The typical pattern is that the first weekend or two is very heavily slanted towards the distributor (as much as a 85/15 split, though 70/30 is more normal). Then the distributor's share goes down each weekend. The rule of thumb is that over the course of a typical film, the distributor will receive about 55% of box office gross. Foreign deals can differ a fair amount. Each deal is different, and it's hard to say what any one film gets without some insider info. Then there's the cost of the film. There's not been a firm number on Avatar's production costs. High 200s is a good guess, but it's a guess. P&A (prints and advertising) can be a huge cost on something like Avatar, though it had fewer prints than a typical blockbuster. Advertising was certainly substantial, though. I suspect 100 million is actually low. Cameron's share is likely defined to come after some sort of breakeven point, some minimum number the studio beancounters said had to come back to the studio. There's really no standard whatsoever for someone like Cameron though, so who knows. It's also important to remember that a lot of a film's production cost is really just the studio paying itself. Soundstage rental. Grip trucks, costuming, blah blah blah. Money moving from one column to another. Avatar probably didn't qualify for any tax credits, though some films get really amazing deals. Some come close to having half their budgets in transferable tax credits, depending on the state or locale they shoot in. Those tax credits can be sold for cash and can considerably lower the cost to a studio. The traditional hope for an average film has been to break even on box office, profit on the ancillaries - dvd, tv, etc. But with DVD sales dropping, that model will need some adjustment. Avatar, though, is probably pretty close to some definition of profit in theatrical release. And all that billion plus dollars is cash flow. Which is king, as much in Hollywood as it is anywhere else.

by noilly 17y ago

waterlesscloud 17y ago

It's a sliding scale of box office gross that goes to the studios. Believe it or not, each film has its own deal, and there isn't really a standard amount. Bigger films can negotiate more for the distributor (studio) and less for the exhibitor (theater). The typical pattern is that the first weekend or two is very heavily slanted towards the distributor (as much as a 85/15 split, though 70/30 is more normal). Then the distributor's share goes down each weekend. The rule of thumb is that over the course of a typical film, the distributor will receive about 55% of box office gross. Foreign deals can differ a fair amount. Each deal is different, and it's hard to say what any one film gets without some insider info. Then there's the cost of the film. There's not been a firm number on Avatar's production costs. High 200s is a good guess, but it's a guess. P&A (prints and advertising) can be a huge cost on something like Avatar, though it had fewer prints than a typical blockbuster. Advertising was certainly substantial, though. I suspect 100 million is actually low. Cameron's share is likely defined to come after some sort of breakeven point, some minimum number the studio beancounters said had to come back to the studio. There's really no standard whatsoever for someone like Cameron though, so who knows. It's also important to remember that a lot of a film's production cost is really just the studio paying itself. Soundstage rental. Grip trucks, costuming, blah blah blah. Money moving from one column to another. Avatar probably didn't qualify for any tax credits, though some films get really amazing deals. Some come close to having half their budgets in transferable tax credits, depending on the state or locale they shoot in. Those tax credits can be sold for cash and can considerably lower the cost to a studio. The traditional hope for an average film has been to break even on box office, profit on the ancillaries - dvd, tv, etc. But with DVD sales dropping, that model will need some adjustment. Avatar, though, is probably pretty close to some definition of profit in theatrical release. And all that billion plus dollars is cash flow. Which is king, as much in Hollywood as it is anywhere else.