How Much Money Do Movies Really Make?

When looking at how a movie performs, most fans only look at the box office results. This is only one piece of the pie. Remember, it's not about how much money a studio makes, but how much profit they make. To understand how much money a movie really made for a studio quite a few things must be taken into account:

Production Budget

-Movies can cost a lot of money to make. Cast, location, effects, crew, production, etc. all factor into how much money goes into making a movie. Larger scale blockbusters often cost more than other types of movies. The production budget of a movie is often known to the public. A great site to reference for this information is BoxOfficeMojo.com.

Marketing/Advertising

-This one is tricky. Studios don’t often disclose how much money goes into marketing and advertising. It is millions of dollars though. Most movies spend between $20 million and $50 million to get the public’s attention. Larger scale blockbusters can spend even more than that.  

Total Box Office

-Total box office isn’t what it seems. Movie studios actually only get to keep about 2/3 of the box office money. The rest of the money goes to the theater showing the movie. Fans often forget this when looking up box office results online.

Back End Deals

-This one is also tricky, so don’t really try factoring it into my equation below. An actor’s contract is never made public. The only thing known is an actor’s salary or how many movies in a franchise an actor is contracted to film, should the studio want them to return. Some A-List actors have back end deals worked into their contract though. They believe their name will help sell the film, so they ask for a certain percentage of the box office money.  

So how do you calculate how much money a film really makes? It’s tough since only the studio really knows. Here is a way to do it though. The exact amount will be off, but it will give you a good idea.

2/3 Total Box Office (Domestic and Foreign) – (Production Budget + Marketing/Advertising = Assume $35 million for a normal movie and $65 million for a larger scale blockbuster)

*EXAMPLE: The production budget of a movie is $100 million and it makes $200 million at the box office. Roughly how much did the studio make from that movie?

2/3 Total Box Office ($132 million) – ($100 million Production Budget + $35 million Marketing/Advertising) = -$3 Million.

-It can be assumed the example lost the studio $3 million in money. A good rule of thumb to keep in mind is that for every $1 million spent making the movie the studio would like to see $3 million or more returned at the box office.