7 ms·

Any reason to believe that this is an instance of Hollywood Accounting? At a glance, wikipedia says the film cost $190m, which seems reasonable for a film like

Any reason to believe that this is an instance of Hollywood Accounting? At a glance, wikipedia says the film cost $190m, which seems reasonable for a film like this, and only received $124.5m in box office sales. Conversely, wikipedia lists Harry Potter OotP as a "150–200 million" budget on $942m in box office sales. It's certainly possible this is a case of Hollywood Accounting, but is there any particular reason we think it is, vs just a film losing a lot of money normally?

jeffwilcox 5y ago
The long tail of box office receipts, especially internationally, is always interesting, as are licensing deals. Maybe they find a way to protect those with other subsidiaries.
blhack 5y ago
How much did HBO pay for the streaming rights? I would have bought 3 tickets to this, but watched it on HBO instead.
- cheschire 5y ago
  yep. i watched it at least 3 times on hbo as well. easily would've bought a couple tickets.
  - mraudiobook_com 5y ago
  - utopcell 5y ago
    same here
- oliyoung 5y ago
  > How much did HBO pay for the streaming rights? They wouldn't -have paid- anything, HBO is owned by Warner too edit: ...they wouldn't have to have paid anything..
  - blhack 5y ago
    Oh very interesting! I wonder how that looks from an accounting/profitability perspective?
    - oliyoung 5y ago
      You know that game where you put a table-tennis ball under plastic cups and slide them around and you have to guess where the ball ends up? That.
    - 14 5y ago
      This reminds me of my dad’s story at work on time. He worked at a mill and the higher ups had a meeting with everyone. They said due to the high pricing of logs currently we are thinking we have to lay some guys off we didn’t want it to come as a surprise. My dad spoke up and said you own this division and the logging division. You set the price of the logs. You are telling us you charge yourself too much for logs and now we are going to lose work? There was union talk of a mill wide strike if they did it and they ended up not laying anyone off.
  - rzwitserloot 5y ago
    No, they'd have paid exactly what they want to. If they want the movie to make no profit, they'll charge HBO nothing, or perhaps they'd have the gall to have _HBO charge the movie studio part of warner_ a fee for showing it on HBO, perhaps filing that away as 'marketing expenses' or some similar scam. Anybody with monkey points (entitled to a cut of the net earnings) is out of luck. Conversely if they want it to be a windfall for some reason they charge HBO idiotic amounts of money for the distro rights, which HBO will happily pay because Warner tells them to do so. That's exactly hollywood accounting. I have no idea if it was actually 'done' to the matrix here.
    - oliyoung 5y ago
      > they'd have paid exactly what they want to. sorry, yeah I agree, this is a better way of saying that
  - 5y ago
Latty 5y ago
Quoting box office sales while ignoring the fact this was released simultaneously for streaming really doesn't tell the full story.
- LegitShady 5y ago
  Do they suddenly make more money streaming? Do you have any evidence people joined a streaming platform to watch it? This thing bombed everywhere. People with existing subscriptions watching it doesn't make it any. More profitable to Warner Bros
  - bentcorner 5y ago
    While I can't answer your question, just using a calculation like "box office receipts" - "movie making expense" is surely disingenuous. In that case every single direct-to-netflix release would be considered a money loser.
  - doctornoble 5y ago
    Anecdotally I did. Well for that and Dune - and I’ll probably keep it, I was surprised and impressed with the selection.
  - lilyball 5y ago
    They had a deal for home streaming simultaneously with the box office release. This means that yes it is highly likely that far more people streamed this movie than movies that do theater-exclusive releases. And people with existing subscriptions don’t matter, because Warner Bros isn’t getting subscription money directly, they’re getting money from deals with subscription services. Edit: HBO is owned by Warner. So even if they don’t do accounting such that HBO pays Warner but just track subscription revenue directly, it still doesn’t matter. Retaining subscribers is hugely important, not just getting brand new subscriptions. It does make it a lot harder to compare box office receipts though.
  - PostOnce 5y ago
    More money isn't just new subscriptions, it's also revenue from existing subscriptions (which can be cancelled any time). By this logic, platforms will never need new content ever in order to keep existing subscribers happy. It's not just new subscriptions, it's also retention: do people stay subscribed to platform X because movies like The Matrix Resurrections are on the platform? It'd be rather hard to measure for a single film, it's the aggregate of platform content that dictates retention, I would think. If the answer is yes, then the platforms will continue to pay companies like WB to film "box office bombs".
pessimizer 5y ago
> wikipedia says the film cost $190m, which seems reasonable for a film like this And you can add half of that again for the marketing budget.
- newsbinator 5y ago
  It seems like it wasn't marketed very much: I didn't realize it was in production, about to be released, or... released. I just happened to see it online ready to watch one day and watched 2/3rds of it before giving up.
  - TylerE 5y ago
    That's actually a pretty low marketing budget. General practice amongst the box office geeks is to assume marketing is EQUAL to the production budget for a big blockbuster.
  - chrisseaton 5y ago
    Yeah it seems they knew it was awful and just kind of dumped it out.
    - k12sosse 5y ago
      Sony said "come Wachowski's, we are going to make a new Matrix, with or without you." And then the dump truck showed up and she did what she could to, in her mind, make a product she was happy with that she knew she had to make for herself. There's a lot of meta- to the film about the process, state of Hollywood, big cinema, giving in to retelling the same story for nostalgia bros, from what I understand. (I am not a critic or terribly deep, just observing) I mean this clip speaks volumes. That unmistakable look of "Why'd you have to ask me that" as she is presumably self censoring thinking about what she /should/ be saying. https://youtu.be/6mkNIs2XWZU?t=10 https://youtu.be/6mkNIs2XWZU?t=10
- zizee 5y ago
  I have always assumed those numbers are fudged, and included marketing. I don't really know much about the industry, or what it take to make a film like this, but $100m is enough to pay 1000 people 100k. Did this film take that many people, that long to make? I would imagine CGI is reducing a lot of expensive things (like blowing up aircraft, and expensive location shoots).
csours 5y ago
Hollywood Accounting, as I understand it, entails having a separate production company for each movie. That company then buys services from the parent company, something like a franchisee. Some of those services may be inflated. All of the costs incurred by the production company will be paid off before anyone gets residuals. There's also the matter of "marketing costs" which also help out the parent company. So, of the $190 million that the movie cost, some of it was raised from WB, but some of it also went back to WB. From the outside it's really hard to say when they come out even.
nonameiguess 5y ago
Warners intentionally released every 2021 film simultaneously on HBO Max in an attempt to drive subscriptions. It's likely impossible to attribute marginal subscriptions to a specific film on a service that offers thousands of them plus episodic television, but long run, if the service doesn't die and competes reasonably well with Disney+ and Netflix to drive up AT&T's market value for decades into the future, especially if other telecoms and ISPs start to dwindle in the face of disruption, it's worth it to lose accounting profit on a few specific wide releases for a year or two.

jeffwilcox 5y ago

The long tail of box office receipts, especially internationally, is always interesting, as are licensing deals. Maybe they find a way to protect those with other subsidiaries.

blhack 5y ago

How much did HBO pay for the streaming rights? I would have bought 3 tickets to this, but watched it on HBO instead.

cheschire 5y ago
yep. i watched it at least 3 times on hbo as well. easily would've bought a couple tickets.
- mraudiobook_com 5y ago
- utopcell 5y ago
  same here
oliyoung 5y ago
> How much did HBO pay for the streaming rights? They wouldn't -have paid- anything, HBO is owned by Warner too edit: ...they wouldn't have to have paid anything..
- blhack 5y ago
  Oh very interesting! I wonder how that looks from an accounting/profitability perspective?
  - oliyoung 5y ago
    You know that game where you put a table-tennis ball under plastic cups and slide them around and you have to guess where the ball ends up? That.
  - 14 5y ago
    This reminds me of my dad’s story at work on time. He worked at a mill and the higher ups had a meeting with everyone. They said due to the high pricing of logs currently we are thinking we have to lay some guys off we didn’t want it to come as a surprise. My dad spoke up and said you own this division and the logging division. You set the price of the logs. You are telling us you charge yourself too much for logs and now we are going to lose work? There was union talk of a mill wide strike if they did it and they ended up not laying anyone off.
- rzwitserloot 5y ago
  No, they'd have paid exactly what they want to. If they want the movie to make no profit, they'll charge HBO nothing, or perhaps they'd have the gall to have _HBO charge the movie studio part of warner_ a fee for showing it on HBO, perhaps filing that away as 'marketing expenses' or some similar scam. Anybody with monkey points (entitled to a cut of the net earnings) is out of luck. Conversely if they want it to be a windfall for some reason they charge HBO idiotic amounts of money for the distro rights, which HBO will happily pay because Warner tells them to do so. That's exactly hollywood accounting. I have no idea if it was actually 'done' to the matrix here.
  - oliyoung 5y ago
    > they'd have paid exactly what they want to. sorry, yeah I agree, this is a better way of saying that
- 5y ago

Latty 5y ago

Quoting box office sales while ignoring the fact this was released simultaneously for streaming really doesn't tell the full story.

LegitShady 5y ago
Do they suddenly make more money streaming? Do you have any evidence people joined a streaming platform to watch it? This thing bombed everywhere. People with existing subscriptions watching it doesn't make it any. More profitable to Warner Bros
- bentcorner 5y ago
  While I can't answer your question, just using a calculation like "box office receipts" - "movie making expense" is surely disingenuous. In that case every single direct-to-netflix release would be considered a money loser.
- doctornoble 5y ago
  Anecdotally I did. Well for that and Dune - and I’ll probably keep it, I was surprised and impressed with the selection.
- lilyball 5y ago
  They had a deal for home streaming simultaneously with the box office release. This means that yes it is highly likely that far more people streamed this movie than movies that do theater-exclusive releases. And people with existing subscriptions don’t matter, because Warner Bros isn’t getting subscription money directly, they’re getting money from deals with subscription services. Edit: HBO is owned by Warner. So even if they don’t do accounting such that HBO pays Warner but just track subscription revenue directly, it still doesn’t matter. Retaining subscribers is hugely important, not just getting brand new subscriptions. It does make it a lot harder to compare box office receipts though.
- PostOnce 5y ago
  More money isn't just new subscriptions, it's also revenue from existing subscriptions (which can be cancelled any time). By this logic, platforms will never need new content ever in order to keep existing subscribers happy. It's not just new subscriptions, it's also retention: do people stay subscribed to platform X because movies like The Matrix Resurrections are on the platform? It'd be rather hard to measure for a single film, it's the aggregate of platform content that dictates retention, I would think. If the answer is yes, then the platforms will continue to pay companies like WB to film "box office bombs".

pessimizer 5y ago

> wikipedia says the film cost $190m, which seems reasonable for a film like this And you can add half of that again for the marketing budget.

newsbinator 5y ago
It seems like it wasn't marketed very much: I didn't realize it was in production, about to be released, or... released. I just happened to see it online ready to watch one day and watched 2/3rds of it before giving up.
- TylerE 5y ago
  That's actually a pretty low marketing budget. General practice amongst the box office geeks is to assume marketing is EQUAL to the production budget for a big blockbuster.
- chrisseaton 5y ago
  Yeah it seems they knew it was awful and just kind of dumped it out.
  - k12sosse 5y ago
    Sony said "come Wachowski's, we are going to make a new Matrix, with or without you." And then the dump truck showed up and she did what she could to, in her mind, make a product she was happy with that she knew she had to make for herself. There's a lot of meta- to the film about the process, state of Hollywood, big cinema, giving in to retelling the same story for nostalgia bros, from what I understand. (I am not a critic or terribly deep, just observing) I mean this clip speaks volumes. That unmistakable look of "Why'd you have to ask me that" as she is presumably self censoring thinking about what she /should/ be saying. https://youtu.be/6mkNIs2XWZU?t=10 https://youtu.be/6mkNIs2XWZU?t=10
zizee 5y ago
I have always assumed those numbers are fudged, and included marketing. I don't really know much about the industry, or what it take to make a film like this, but $100m is enough to pay 1000 people 100k. Did this film take that many people, that long to make? I would imagine CGI is reducing a lot of expensive things (like blowing up aircraft, and expensive location shoots).

csours 5y ago

Hollywood Accounting, as I understand it, entails having a separate production company for each movie. That company then buys services from the parent company, something like a franchisee. Some of those services may be inflated. All of the costs incurred by the production company will be paid off before anyone gets residuals. There's also the matter of "marketing costs" which also help out the parent company. So, of the $190 million that the movie cost, some of it was raised from WB, but some of it also went back to WB. From the outside it's really hard to say when they come out even.

nonameiguess 5y ago

Warners intentionally released every 2021 film simultaneously on HBO Max in an attempt to drive subscriptions. It's likely impossible to attribute marginal subscriptions to a specific film on a service that offers thousands of them plus episodic television, but long run, if the service doesn't die and competes reasonably well with Disney+ and Netflix to drive up AT&T's market value for decades into the future, especially if other telecoms and ISPs start to dwindle in the face of disruption, it's worth it to lose accounting profit on a few specific wide releases for a year or two.