Misix Library

Hooray for Hollyworld

November 6, 2013

Every Monday, cinephiles pore over the weekend box office results, categorizing the newcomers even before theaters can empty their Dumpster-loads of popcorn. People tend to view that first week as the harbinger of a film’s fate. Some even combine those dollar amounts with ratings aggregated from multiple sources to construct elaborate indexes that tell moviegoers how foolish they were to give their money to Adam Sandler.

But, like every other industry on the planet, it’s hardly that simple anymore. The U.S. market is a shrinking piece of the puzzle as studios globalize their offerings, which means a movie’s true impact can’t be determined until the shockwaves die down in the United Kingdom, Russia, China and other locations with a growing appetite for American-made fare.

In short, the big screen keeps getting bigger.

Decade to decade

Let’s start by going back to 1993. Bill Clinton was in the White House, Snoop Lion was still Snoop Doggy Dogg, and Jurassic Park was the highest grossing movie in the world with a total of $978.2 million. One other topped $400 million (Mrs. Doubtfire), and three of the top 10 earners bested $200 million overseas, with only T-Rex and friends higher than $300 million.

Fast-forward 10 years to 2003. The Lord of the Rings: Return of the King grossed $1.12 billion, nine others finished north of $400 million, and eight of the top 10 grabbed at least $200 million overseas, with five besting the $300 million mark.

Then we have this year. Iron Man 3 is tops with $1.21 billion, 10 others have collected at least $400 million, and all of the top 13 have earned $200 million or more overseas, with eight above $300 million. And those are just year-to-date numbers, some of which will grow in the three months remaining in 2013—unless you’re After Earth, The Lone Ranger or R.I.P.D.

Fudging the numbers

It’s easy to ridicule flops like those three. And fun. But if you clicked over to the 2013 worldwide grosses in the previous paragraph (here’s another chance), you would see they were well into the $200 million range. Except R.I.P.D., which earned precisely what you would expect a trash fire like that to earn. Those other two, however, grossed more than their reported budgets—in the case of After Earth, more than $110 million more. So how can they be labeled flops and terribly written and really bad ideas that never should have escaped the binge-drinking session from whence they came?

It turns out the only thing movie studios spin better than their latest nine-figure M. Night Shyamalan mistake is numbers. For starters, reported budgets are reported production budgets and don’t include marketing. The Lone Ranger, for example, sported a $215 million production budget, but Disney forked over another $175 million in marketing and advertising, most of which went toward convincing people Johnny Depp is Native American.

Then there’s the matter of dividing the spoils. Obviously, movies don’t show themselves, so studios only receive a percentage of ticket sales. Domestically, it’s in the neighborhood of 50-55% by the time a movie wraps up its cinematic run. For the foreign box office, it’s even less.

Secret to Success

When you get done wading through the creative accounting and variable revenue streams, the general rule is that a movie needs to make about twice its reported production budget to break even. After Earth fell just short, The Lone Ranger didn’t come close, and R.I.P.D. didn’t earn enough to cover Jeff Bridges’ facial-hair stylist:

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Then we have the big winners, many of which not-so-coincidentally share the trait of being highly global. Pacific Rim (overseas earnings: $305.8 million) took place in various locations around the world and staged its climactic scene in Hong Kong. Fast & Furious 6 ($550 million) also did a fair amount of globe-trotting, with scenes in Hong Kong, Russia, London and Spain. Iron Man 3 ($805.7 million) even went so far as to add a handful of China-centric scenes specifically for that market’s version.

For all three of those movies, at least 66% of their overall take came from the foreign box office. Compare that with Man of Steel, which featured a U.S. icon as its central character and logged a relatively paltry overseas share of 56.1%. With results like that, Superman may stand for truth, justice and the American way, but don’t count on him bragging about that last one too much in the sequel.