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Author Topic: Alien: Covenant Box Office Performance  (Read 141148 times)


monkeylove
Jul 15, 2017, 03:00:36 AM
Reply #1351 on: Jul 15, 2017, 03:00:36 AM
Q

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_accounting

and 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-industry

That 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.



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.


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/






« Last Edit: Jul 15, 2017, 03:31:39 AM by monkeylove »

bb-15
Jul 15, 2017, 08:30:29 PM
Reply #1352 on: Jul 15, 2017, 08:30:29 PM
Q
But as I explained to you earlier, I was not making any theories about sequels.

Earlier, you speculated about why a studio would choose to release a sequel to a film which had box office which was about 2.5 times its production budget. 

From me;

Other films that did about 2.5 times the production budget at the box office?
"Batsman Begins"
"Star Trek (2009)"

Both those films got sequels. They were not flops.
If Japan's box office is about $20 million, there is still hope imo that "Covenant" will get a low budget sequel.

Your reply with emphasis by me.

The catch is that studios need most revenues right away to cover operating costs and investors' returns. Given that, if they find better projects, then they may choose to shelve those that are riskier, or as you put it resort to lower budgets.

About the two examples, I'm guessing that they represent more attractive franchises compared to Alien.

What is being discussed here to me is the decision by the studio to release a sequel (or not to release one).
I have found several films which got sequels that performed at the box office (compared to the production budget) at about the same level to where "Covenant" should end up after its Japan release.
- I have taken the known public financial information which could be part of the studio's decision.

In terms of testing a film theory about what a studio "may choose" to decide about a sequel release, I think that's the best I can do.

Rather, I explained how studios profit.

You gave expense / income calculations. I already knew about that.
Still presenting a thought experiment/film theory about studio finances doesn't bring much clarity imo to when studios will approve of sequels.

For the examples you gave above, you need to include marketing cost...

Not really.
1. Marketing costs / total film expenses are very hard to find and are almost always unknown to the public.
2. If I did have the total movie expenses, I could give a more accurate measure (using formulas) of whether a film lost money or made money.
http://www.deadline.com/2013/01/movie-profits-december-snl-kagan/

* But even if I had the total film expense information (and almost always, none of us have it), that still doesn't give an answer to the question of when a studio may approve a sequel for a particular movie or not.
- I don't work for the company where those decisions are made.
- What I have looked for is the cut off area, using numbers available to the public, of when studios may approve a sequel.
It seems again to be when box office is about 2.5 x the production budget.
- Here's another example (from the-numbers.com);

2015   The Divergent Series: Insurgent; production budget:   $110,000,000, worldwide box office:   $295,279,072, ratio box office/budget = 2.68
Sequel approved.

Given that, there are many reasons why sequels are approved even if studios did not earn as much. Read my previous post for details.

I understand. Those are your theories about why sequels are approved or are not approved.
Again, it's our privilege to bring up film theories/thought experiments.
- What I have done is to find the cut off area between box office and production budgets to determine the zone of where roughly there is a chance for a sequel to be approved.
 
To find out why sequels are approved, you need to look at the other revenue streams of the studio.

- That information is not available.
* To recap what is not available to the public;
1. Total film expenses.
2. All revenue streams for a studio.
3. The effects of arcane Hollywood Accounting which tries to hide film profits.
4. Studio executive discussions about sequel decisions. 

* What is known?
- Box office numbers and production budgets.
- Therefore a ratio between those two numbers can be figured out to find about where studios are approving sequels based on that.

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/

Thanks for the link.
I have read several articles about that topic including one by the author you posted, Stephen Fellows.

https://stephenfollows.com/how-movies-make-money-hollywood-blockbusters/

- Here are a couple more articles about studio finances;

http://io9.gizmodo.com/5747305/how-much-money-does-a-movie-need-to-make-to-be-profitable

https://en.m.wikipedia.org/wiki/Hollywood_accounting

;)


kwisatz
Jul 16, 2017, 05:42:33 PM
Reply #1353 on: Jul 16, 2017, 05:42:33 PM
Q
Again the films you found are origin storys. Studios know quite well that origin storys are underperforming from time time and they get a sequel anyway because implied money. (For example compare: the first Nolan Batman and its sequels, the first Captain America and its sequels, X-Men: First Class and its first sequel etc.)

A:C is not an origin story and its BO already dropped compared to Prometheus, which contains the origin story in this case. They already trimmed down the production cost (unlike they did with the Batman sequel, where it went up instead; Ridley sure is working economically but in my eyes it already shows that FOX has lost a significant amount of trust in Ridley pulling this franchise off financially).

If you dont take into account these factors, which are obviously "available" also, your theory is worth ****.

« Last Edit: Jul 16, 2017, 06:18:48 PM by kwisatz »

fiveways
Jul 16, 2017, 08:40:50 PM
Reply #1354 on: Jul 16, 2017, 08:40:50 PM
Q

I'm not an executive in a film studio.
The way I approach this is; I don't pretend to try to fully understand Hollywood accounting or how studio economics works.
https://en.m.wikipedia.org/wiki/Hollywood_accounting

* What I can do is look at box office performance with movies in a science fiction film franchise like Star Trek. I can see their production budgets and their worldwide box office and what films got sequels.
That lets me understand about how much money a Star Trek film (or even an Alien movie) needs to make (compared with its production budget), in order to get a sequel.

- "Star Trek: Insurrection" was a slight flop. Production Budget: $58 million. Double that = $116 million. But the film's box office = $112,587,658.
Still "Insurrection" got a sequel.

- The sequel, "Star Trek:Nemesis" flopped hard. What I'd call a bomb. Production Budget: $60 million. Worldwide box office: $67,312,826.
Barely above 1 x production budget. Imo it lost $millions and that ended Star Trek movies for 7 years.

* Back to "Covenant". It could get up to about 2.5 its production budget from Japan's box office.
Both "Star Trek (2009)" and "Star Trek Into Darkness" made box office that was about 2.5 times their production budgets.
Those Star Trek movies got sequels.
- "AVP" had a Production Budget: of $60 million (Box Office Mojo) to $70 million (Google). Box office: $172,544,654. Using the Google budget = box office about 2.5 x the production budget. (The Box Office Mojo budget = box office 2.86 x the production budget.) And "AVP" got a sequel.

- Conclusion based on this information?
If "Covenant" makes about 2.5 times its production budget (after its Japan release), it could get a sequel.

* As for comparing a Star Trek film with an Alien movie; in several ways "Prometheus" was similar to a sci-if adventure Star Trek film.
There can be an overlap between the two franchises in terms of overall style imo.
For instance "Star Trek First Contact" had horror elements in a sci-if adventure (like "Prometheus"). And "First Contact" made about 3 x its production budget. 

;)

I'm not sure, but I think distributors get around a third of box office receipts, and in several cases probably half.

In general, then, one can consider doubling the cost (because of marketing), and then cutting revenues by a third to a half (because they go to distributors), then adding ten percent for the profit margin. In a worst-case scenario:

Production cost: $100m
Marketing cost: $100m
Total cost: $200m

Box office receipts should be $300m to $400m (because $100m to $200m will go to distributors) plus 10 pct profit margin (around $20 million).

Other factors may be considered in decision-making, such as domestic sales, whether or not there are other franchises or projects that may make more money, and so on.

Finally, I think one reason why the Star Trek franchise keeps going is that its revenues do not rely solely on box office receipts but multiple movies and TV shows.

My disagreements with this argument;

1. The claim that box office needs 4 x the production budget to be get a sequel is just a theory.   
* We can test the theory of when studios approve sequels by looking at the numbers and seeing when sequels are approved. (From the numbers.com website)
http://www.the-numbers.com/movies/franchise/X-Men#tab=summary
- May 26, 2006   X-Men: The Last Stand, production budget:   $210,000,000, worldwide box office:   $459,359,555, ratio box office/budget = 2.19
Sequel approved.
- May 1, 2009   X-Men Origins: Wolverine, production budget:   $150,000,000, worldwide box office:   $374,825,760, ratio box office/budget = 2.49
Sequel approved.
- Jun 3, 2011   X-Men: First Class, production budget:   $160,000,000   worldwide box office:   $355,408,30   ratio box office/budget = 2.22
Sequel approved.

So, that's two franchises (Star Trek & X-Men) where sequels were approved with box office being about 2.5 x the production budget or even less.   
I could find more examples.

2. A movie makes money from more than just theater box office. There are disk sales (DVD/Blu-ray), streaming, cable broadcast fees, and with science fiction there are merchandising fees from toys and comics.

** Back to "Covenant"; a sequel could happen if its box office gets to 2.5 the production budget. Why? Because there are multiple movies which got sequels (like Batman Begins, Star Trek, X-Men) where that kind of performance got a sequel.

3. The Alien franchise is considered to be one of the top science fiction movie/TV franchises of all time.
http://screenrant.com/greatest-science-fiction-franchises-ever/

The challenge for the Fox studio is to figure out how to release an Alien franchise movie which can get better box office.
Whether the studio goes with a film more like "Prometheus" or "Aliens", there is the potential to make money and because of that, the Alien franchise is not dead. 

;)

X-Men is unique s Fox has to make an X-men related movie every 7 years (I've also read 5 in the case of X-men) or the right revert BACK to marvel/disney.  this is why there is constantly talks of a new fantastic four movie (same sort of contact) because fox doesn't want to give those character back without some sort of financial reward. 

This is also why there is continuously X-men films on the go. 

regardless of when it was released the movie was doomed to under-perform.  Bad word of mouth killed it.  This would have happened in August, October (also October isn't a great time to release films in general as attendance always falls after the summer months), or whenever.

Changing the release date doesn't magically make the movie better.  It doesn't change peoples opinions on it.  It doesn't make people suggest it to friends.  It just postpones it's under-performance.

« Last Edit: Jul 16, 2017, 08:47:39 PM by fiveways »

SM
Jul 16, 2017, 08:48:44 PM
Reply #1355 on: Jul 16, 2017, 08:48:44 PM
Q
Quote
A:C is not an origin story

Except for the origin of the Alien in the title.


kwisatz
Jul 16, 2017, 09:22:24 PM
Reply #1356 on: Jul 16, 2017, 09:22:24 PM
Q
Quote
A:C is not an origin story

Except for the origin of the Alien in the title.

I dont know, are you kinda implying here that youd categorize A:C as an origin because of the Alien? I admit that would kill my argument, but i hardly see it with the Alien essentially being the black goo more or less and the Fassbender all over the place...

Im sure though Fox may have tried to make this appear as some kind of reboot, but i think they failed, i think everyone sees this as a Prometheus sequel with a weird disruption of the usual title continuation... Would be news for me if these two films werent heavily associated with each other in public perception, for good and worse --

I remember the rumours about Fox wanting to take out the bombing sequence. Maybe the whole problem with their reboot plan was actually Ridley himself. Wouldnt surprise me. It may have been sort of a trade off situation for them: they wanted to keep Ridley, cause Alien is Ridley, at least thats their marketing line, but wanted to reboot Prometheus/any Alien story badly at the same time.... they compromised and produced A:C.  ::) *inbeforemrmiyagiquote


« Last Edit: Jul 16, 2017, 09:32:57 PM by kwisatz »

Protozoid
Jul 17, 2017, 01:01:01 AM
Reply #1357 on: Jul 17, 2017, 01:01:01 AM
Q
Quote
A:C is not an origin story

Except for the origin of the Alien in the title.

I dont know, are you kinda implying here that youd categorize A:C as an origin because of the Alien? I admit that would kill my argument, but i hardly see it with the Alien essentially being the black goo more or less and the Fassbender all over the place...

Im sure though Fox may have tried to make this appear as some kind of reboot, but i think they failed, i think everyone sees this as a Prometheus sequel with a weird disruption of the usual title continuation... Would be news for me if these two films werent heavily associated with each other in public perception, for good and worse --

I remember the rumours about Fox wanting to take out the bombing sequence. Maybe the whole problem with their reboot plan was actually Ridley himself. Wouldnt surprise me. It may have been sort of a trade off situation for them: they wanted to keep Ridley, cause Alien is Ridley, at least thats their marketing line, but wanted to reboot Prometheus/any Alien story badly at the same time.... they compromised and produced A:C.  ::) *inbeforemrmiyagiquote
I think a reboot would have simply been called "Alien". The ": Covenant" part implies sequel more than reboot, imho.

Whether or not the movie is profitable may never be known and may not even be relevant. Did you ever read about how some of the Harry Potter movies were not profitable according to the studio's books? It's a typical way to prevent them from having to share profits: claim there weren't any.

To me, the real issue is that the grosses for each Alien film continue to decline. Even good reviews didn't change that for Covenant. Prometheus was the only movie in the franchise that made more than its predecessors. It's worth pondering why.


SM
Jul 17, 2017, 01:09:36 AM
Reply #1358 on: Jul 17, 2017, 01:09:36 AM
Q
Quote
I dont know, are you kinda implying here that youd categorize A:C as an origin because of the Alien?

It tells us the origin of the Alien, so it would be, by definition, an origin story.

« Last Edit: Jul 17, 2017, 01:36:32 AM by SM »

kwisatz
Jul 17, 2017, 01:21:18 AM
Reply #1359 on: Jul 17, 2017, 01:21:18 AM
Q
Quote
I dont know, are you kinda implying here that youd categorize A:C as an origin because of the Alien?

It tells us the origin of the Alien, so it would be, by definition, an origin story.


A:C contains the origin story of the Alien, that doesnt make A:C as a whole into an origin story.

You think The Dark Knight Rises is an origin story because it tells us where Bane is coming from? Ja? So who is this old guy flying around in a Bat costume and why doesnt he just shoot criminals with a rocket launcher, cause he obviously can afford it?

(Even for the Alien alone A:C is lacking a severe amount of information. Who is this robot? Whats his beef with bald folks? What is this black substance? etc.)

Quote
Did you ever read about how some of the Harry Potter movies were not profitable according to the studio's books?

I didnt know. Shows how much of a black blox Hollywood productions really are. Everyone of us on the outside is talking more or less out of their *** and everyone on the inside wont talk at all.

A totally outside thought by myself: I think Fox at the moment doesnt really know what to do with the franchise, like at all, but they will leave no stone unturned (even Ridley), when it comes to figure out how to make more money with this problem child.

« Last Edit: Jul 17, 2017, 01:32:53 AM by kwisatz »

SM
Jul 17, 2017, 01:38:37 AM
Reply #1360 on: Jul 17, 2017, 01:38:37 AM
Q
Quote
A:C contains the origin story of the Alien, that doesnt make A:C as a whole into an origin story.

Depends if define 'origin' story in terms of super hero films.


kwisatz
Jul 17, 2017, 01:49:39 AM
Reply #1361 on: Jul 17, 2017, 01:49:39 AM
Q
Quote
A:C contains the origin story of the Alien, that doesnt make A:C as a whole into an origin story.

Depends if define 'origin' story in terms of super hero films.

Ja if you solely focus on the cat, a man holding a cat is a cat. But in my book its a man holding a cat.


SM
Jul 17, 2017, 01:54:34 AM
Reply #1362 on: Jul 17, 2017, 01:54:34 AM
Q
That cat's something I can't explain.




 

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