My Black List Experience

[Done Deal Pro]

If you could address the business side of Hollywood, how could the movie lost money for the studio when you take into consideration such things as its estimated budget being $10,000,000 and its box office was $21,500,000, and then you have the DVD income, licensing fees to TV, cable, etc.?

Jeff can obviously speak more about his movie, than I can, but as rule-of-thumb from my film school days, in general movies need to make back like three times what they cost to break even. P&A (prints & advertising) costs are in certain ways the same for every movie. I could run an ad for a small indie film during a Super Bowl and it'd cost the same for me as it would for (now) Disney to run a Marvel movie ad. Now granted the P&A costs for big movies is so much more far reaching & expensive than an indie film, but still there are some given costs no matter what. So even if a film only cost $10 million, for example, one might have to spend $20 million to advertise it, promote, do a premiere, send the actors all over the world for interviews & foreign premieres, etc.

Studios write off all kinds of costs to films which never show in the budget. They are big machines and there is a lot to pay for. But the key in so, so many ways is how they handle the "accounting" of it all. The facilities. Services on the lot. Etc.

And if a movie isn't a really a hit at the box office and/or with critics then DVD, streaming, etc. can't make up for that much in many cases. Sometimes they do, of course, but theatrical success (and the "must see" perception) play into things in terms of it's success down the road. And there are costs to mastering DVDs, making them, sending them out, etc. All written off towards the studios costs. It's an almost never ending cycle.

Here are just a few of a number of articles/references out there on the subject of Hollywood accounting:

https://priceonomics.com/why-do-all-...es-lose-money/

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

https://www.theatlantic.com/business...itable/245134/

[JeffLowell]

Yeah, you hit it exactly. It cost 10 million to make, 25 million to distribute. On average, only half of the box office goes back to the studio.

So at 35 million dollars, it had to earn 70 million at the box office to break even. It made 20, or 10 for the studio. All the secondary markets wouldn't make up for the 25 million dollar hole it was in.

This has been fun to relive.

[JoeNYC]

It cost 10 million to make ... it had to earn 70 million at the box office to break even.

A $10,000,000 movie needs to earn $70,000,000 at the box office to break even? This is inconceivable. Who would make low budget 10 million dollar movies if it had to earn 70 million just to break even? I was thinking a 10 million dollar movie would have to earn around 25 million to break even.

[JeffLowell]

Marketing and distributing a film is expensive. The costs scale - a low budget movie may take tens of millions, while a Marvel movie will run north of a hundred million.

[JoeNYC]

Marketing and distributing a film is expensive. The costs scale - a low budget movie may take tens of millions, while a Marvel movie will run north of a hundred million.

I’m having a hard time accepting this 70 million to break even figure on a 10 million film.

Let’s talk scale:

OHDB’s production budget was 10 million and it’s box office doubled that with $21,500,000, but because you say its marketing was 25 million, it’s considered a commercial failure.

If this is true, then why is “Just Like Heaven” (released in 2005), which is similar as far as being a romantic comedy fantasy with a ghost and come to think of it a psychic also (Napoleon Dynamite’s Jon Heder) is considered a commercial success, when its box office of 103 million is only double its production budget of 58 million.

In the same year OHDB was released, 2008, another film with a ghost was released: the comedy fantasy titled “Ghost Town,” staring Rick Gervais. It was a great, critical success, but with a budget of 20 million and a box office of 27 million, I would call this a commercial failure.

I know marketing and distributing is expensive, but Studios have marketing departments that possess hard numbers on what past similar movies cost to produce and market and have expectations on a future film’s box office potential. So, if they have a low budget 10 million film, with an expectation of a 30 million box office, then why would there be a 25 million marketing campaign?

Also, keep in mind, studios are notorious for having creative accounting methods on what a film cost to market and distribute in order to reduce exposure to corporate taxes, royalties, profit-sharing agreements. There’s a long list of creative people who sued the studios because they were told that their blockbuster hits lost money.

I’d like to say something about “Just Like Heaven” and the romantic comedy predicable haters.

WARNING! SPOILER’S ALERT!


This movie is about an overworked doctor, Elizabeth, where after working long hours is driving to her sister’s house for dinner and to meet a blind date, but has a traffic accident that leaves her in the hospital in a comma. She’s between life and death, where she shows up at her apartment not realizing that she’s in ghostly form and that her place was sublet to David. She nags and annoys him to leave her place but he resists believing he’s delusional from being depressed about his wife’s death.

Okay predicable haters, guess what? They fall in love, he saves her from being disconnected from life support and on top of that the blind date that she was suppose to meet at her sister’s house was -- David! They live happily ever after.

In order to be not predicable, would you predicable haters be happy if Elizabeth died in the hospital? What kind of romantic comedy would that be?

[Done Deal Pro]

I don't think you are factoring in a few things, most important of all the split at the box office. When a film grosses $100 million, the studio doesn't see all that, of course. At the end of the day, they may see around 60% of that gross. So if you start multiplying a film's B.O. by that percent you quickly see it's not as much gross for them as one might think. Not at all.

Breaking even isn't success in (this) business. Studios don't want to net a few million off a movie. That want to make a great deal more than that before they ever consider it a commercial success. Also, keep in mind that interest is lost when their money isn't in the bank. Studios also have high overhead for their lot, their offices, all their employees' salaries & insurance, desks, power & water, etc. all come into play, just like they do for all of us in everyday life. They are big machines - mini cities, if you will. I've had offices on Fox (four different ones), Paramount, and Sony. There are a ton of moving parts there that all cost money. Don't forget the cost of housing independent companies on their lots who have overhead deals or all the scripts they option or buy and never make. Money pours out of those places.

Who (or what) considers JUST LIKE HEAVEN a commercial success? I've never seen the whole thing and I never even think of that movie existing. I had to look it up just to remember what it was about. I would never call it a commercial success after running any numbers on it. I doubt the studio would either. They surely wrote it off as a loss that year, particularly when you add in P&A costs on top of their production costs vs. what it brought in.

On a side but related note, do keep in mind the budgets listed on IMDB are not necessarily accurate for many films. I'm looking at some of the films I've worked on, and they are not correct. Relatively close for one or two, but not accurate. You need to have the "top sheet" for the budget of those films to really know. The numbers they list won't hold up in court, so to speak. Heck, look at M. Night's THE VILLAGE. The entire budget is online and it's $71.6 million. Anyone can read the entire thing easily. But go on IMDB and the budget is listed at $60 million. Who is correct? The accountants for the film that ran numbers everyday, did production reports and had to sign-off on those budgets or IMDB?

As for Jeff's film, I understand your question, at least. Even using the percentage/rule-of-thumb I noted above, the studio might have seen some net profit. And some analysts even note studios only see about 50% of the B.O. office, so that could come into play. But Jeff can clearly comment better than I on his own film. Maybe there are other factors or numbers we are not privy to that came into play.

[I might have to break some of these posts off into their own thread in the BUSINESS section, if the profitability discussion keeps going.]

[JoeNYC]

Who (or what) considers JUST LIKE HEAVEN a commercial success?

It opened at number 1 and it was being reported as a commercial success. In the first 10 weeks of its DVD sales, it made 38 million, but this isn't my point.

My main point was that a studio marketing department knows costs and box office potential. So, I don't understand spending 25 million on marketing for a 10 million movie. Eva Longoria doesn't have the same drawing power as a Reese Witherspoon. An expectation of 70 million return, or better to be commercially successful in this situation just doesn't make sense.

[Done Deal Pro]

It opened at number 1 and it was being reported as a commercial success. In the first 10 weeks of its DVD sales, it made 38 million, but this isn't my point.

My main point was that a studio marketing department knows costs and box office potential. So, I don't understand spending 25 million on marketing for a 10 million movie. Eva Longoria doesn't have the same drawing power as a Reese Witherspoon. An expectation of 70 million return, or better to be commercially successful in this situation just doesn't make sense.

Studios some times throw money at marketing a film to get people in day one before they hear from all their friends that a film wasn't good or are able to bad read reviews. They will also pull back on spending after some screenings if they truly realize they are going to take a bath on the project and thus attempt to mitigate their losses. It's a gamble which can fail but sometimes it works. I don't know how true this is today, but years ago there was a 90-10 split in which the studios got 90% of the box office for like the first couple of weeks, so they wanted as much of the pie as they get could (back). The longer a film stayed in the theaters the more money the theater would get to keep as they split slowly shifted in their favor.

And sometimes they again "roll the dice," and hope that at least the trailer gets stuck in people's minds, so that a few months later they will buy the DVD for $10 simply out of curiosity or rent it online. It's better than paying $14 a ticket for two people and buying $20 worth of popcorn & drinks -- maybe even dinner beforehand. Much cheaper. They try to strategize the best they can based on past films. That's about the best I can tell ya.

[JeffLowell]

Just Like Heaven lost money in the theaters, but that was back when DVD sales and rentals were stronger. So it was still underwater after its theatrical run. (It may have opened #1, but it only made 16 million, which is not a strong number. September isn't when you release something you think will be a blockbuster, because kids just went back to school.) The DVDs made up for that. But it was, at best, a single.

I was in the marketing meeting for my film. I know what it cost to release. I know they spent 25 million marketing and distributing it.

They were hoping it would perform more like 27 Dresses, which came out at the same time. It also had a star who was mostly famous from her TV work, like Eva. It cost 30 to make, probably another 30 to release, and it grossed 162. So it was already roughly 40 million dollars ahead before DVDs and cable and whatever.

FWIW, the collapse of the DVD market and the limited upside is part of why Romantic Comedies have largely disappeared from theaters.

[JoeNYC]

the limited upside is part of why Romantic Comedies have largely disappeared from theaters.

Okay, thanks for your input on the business side of things. I guess for the most part romantic comedy writers will need to look at the streaming platforms for their material.

[figment]

"This is not as fresh as you may believe."

When did I ever say this romantic comedy trope is fresh? In another thread, I only pointed out that it's a popular trope by giving a long list of successful romantic comedies applying it -- and that list could have gone on forever.

I assumed because you were entering NINE contests, that you were doing so because you thought it would place or win, which is why most people enter contests. But apparently you're entering nine contests in order to compose a thread about it at the end of the year. I stand corrected.

I still think it's a hell of a lot of money to spend, but that's coming from me, who's racing to finish the script I'm working on right now to have time to get notes and still be able to enter it in ONE contest this year.

[JoeNYC]

I still think it's a hell of a lot of money to spend

Yes, it's a "hell" of a lot of money.

Normally, I would select no more than half that amount of contests for my screenplay, but contests are an important route and investment for writers to make for their screenplay and themselves, so I thought it would be a good idea to do a thread on contests where writers can make knowledgeable decisions on which contests to enter.

I try my best to contribute to the Done Deal screenwriting forum, whether that be time, energy, or money. Not just sit back and take.

[sc111]

Frankly, I don't understand entering in nine contests either. My only experience with a contest was my first script. Also a Rom Com. Blue Cat was newish and one of the members here had won and recommended it.

In the first round, I received notes and scores from two readers. One said it was one the better non-pro scripts they'd ever read. The other panned it with a vengeance. Which cancelled any chance of advancing.

It was a good experience for me early on in terms of understanding how subjective readers can be. Never entered another.

Feedback from nine sets of contest readers? Whew. I truly don't understand the strategy, Joe.

[JoeNYC]

Frankly, I don't understand entering in nine contests either. ... Feedback from nine sets of contest readers? Whew. I truly don't understand the strategy, Joe.

It's not feedback. I'm not ordering feedback from the contests. It was to research each contest by entering and reporting on their operation and value to the members so they could make knowledgeable decisions on which contests to enter, but if members feel this report on the most popular contests that are available offer no value to guests and members, okay. I'll save my money and not proceed with this endeavor.

Now we all can move on and focus on the craft and business of screenwriting.

[JeffLowell]

Okay, thanks for your input on the business side of things. I guess for the most part romantic comedy writers will need to look at the streaming platforms for their material.

My advice to romantic comedy writers would be to look at TV.