Quote from: Alionic on Jul 14, 2017, 03:19:00 AM
Prometheus is the highest grossing Alien film, bud. A Fox executive recently said Covenant will make the studio a profit even though it underperformed. Can you do some more basic google searches before you post stuff like this, please?
As explained earlier, you have to cut gross revenues by a third to a half because that goes to distributors, then add marketing cost (sometimes, almost the same as production cost). Then add a percentage for the studio's (and investors'?) profit margin, and assume that merchandising will not be able to cover production, marketing, and distribution right away. There are some details here:
https://en.wikipedia.org/wiki/Hollywood_accountingand more shared by others in the rest of this thread.
For example, for a worst-case scenario:
production cost: $100 million
marketing cost: $100 million
profit margin (10 pct): $20 million
revenues (50 percent goes to distributors): $420 million ($220 million to the studio to cover both costs plus profit; the other $200 million to distributors)
This explains why some argue that a movie must earn three to four times its production cost.
Because studios may have more projects, then any weak performance in a movie can be covered by others, which means there is always a chance that a franchise may continue. It's also possible that new ideas may be given which might attract investors. On the other hand, if other projects look more promising, then producers may choose to shelve franchises temporarily or lower budgets. In several cases, they may even lower budgets to ensure that they profit or even receive more profits.
Finally, there is the issue of increasing budgets, more competition, higher ticket prices, and greater risks:
"Steven Spielberg and George Lucas predict film industry 'implosion'"
https://www.theguardian.com/film/2013/jun/13/steven-spielberg-george-lucas-film-industryThat is, at some point successive failures in blockbusters (e.g., high grosses that are barely able to cover soaring costs) may mean a drastic change in what studios release and the way franchises are developed.
Quote from: bb-15 on Jul 14, 2017, 06:37:54 PM
My point is that you and I are not studio executives.
Another of my points is that all we can know if our theories about sequels are correct is by what past box office/budget performance can lead to a sequel.
* Besides, several Star Trek and X-Men movies (and Batman Begins) getting sequels approved with box office ~2.5 x (or below) the production budget, there are other moves where this happened.
- From the-numbers.com
- Jan 20, 2006 Underworld: Evolution, production budget: $45,000,000, worldwide box office: $113,417,762, ratio box office/budget = 2.5
Sequel approved.
- Jan 23, 2009 Underworld 3: Rise of the Lycans, production budget: $35,000,000, worldwide box office: $89,102,315, ratio box office/budget = 2.5
Sequel approved.
- Jan 20, 2012 Underworld: Awakening, production budget: $70,000,000, worldwide box office: $160,379,930, ratio box office/budget = 2.3
Sequel approved.
- A straight comedy movie, Analyze This, Production Budget: $80 million, Worldwide box office: $176,885,658, ratio box office/budget = 2.2 (from Box Office Mojo)
Sequel approved.
- I've already mentioned "AVP". It's box office was above 2.5 x the production budget but it's below 3x at around 2.87.
Sequel approved.
But as I explained to you earlier, I was not making any theories about sequels. Rather, I explained how studios profit.
For the examples you gave above, you need to include marketing cost (usually, almost the same amount as the production budget) and then deduct 30 to 50 percent of box office receipts (because they go to distributors).
Given that, there are many reasons why sequels are approved even if studios did not earn as much. Read my previous post for details.
Quote from: monkeylove on Jul 14, 2017, 02:25:39 AM
We all are entitled to our personal taste about any film.
- But our personal taste should not be part of this discussion. (Individual personal taste does not = professional critic rankings or large viewer polls.)
The personal taste of a few individuals has nothing to do with the fact that several movies exist which got sequels that had box office which was about 2.5 x their production budgets.
- As for the box office for "Prometheus", it was 3.1 x its production budget. And it got a sequel. Many films get sequels when their box office is 3 x the production budget.
And comparing "Prometheus" box office with some other Alien franchise films?
- Alien3 - production budget $50 million, world wide box office, $159 million, ratio box office/budget = 3.18
Sequel approved and "Prometheus" did about the same with its box office / budget performance.
- Alien Resurrection - production budget $75 million, world wide box office, $161 million, ratio box office/budget = 2.15
Sequel not approved.
But both "Prometheus" and "Covenant" have outperformed Resurrection.
* Bottom line; again, going by the publicly known facts about film history, box office and production budgets, if the box office for "Covenant" gets to 2.5 x its production budget, it could get a sequel.
To recap, you need to add a marketing cost to the production budget to get the total cost of the studio, then decrease the box office receipts by 30 to 50 percent because those are used to pay distributors. That means revenues will have to be three to four times the production cost.
To find out why sequels are approved, you need to look at the other revenue streams of the studio. That means other projects might be covering weak ones.
Here's another article to consider:
"How is a cinema's box office income distributed?"
https://stephenfollows.com/how-a-cinemas-box-office-income-is-distributed/