How much money does an average movie theater make

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What’s the average cost of making and selling a Hollywood blockbuster?

I have heard people on both sides wax lyrical about how they have the raw end of the deal. The second question of how much money ends up with the filmmakers presents a different challenge: namely that the economics of each film are unique. However, most films go through the same basic steps of recoupment, meaning we can trace the common route between box office income and profit for the filmmakers and investors. It might help us to look at the second question first, i. Income comes in from a variety of sources and the money is then handed back to the filmmakers via a number of third parties. Along the way, these third parties can recoup the money they spent up front promoting the film and also charge a pre-agreed fee for their work. In many cases, investment deals can be slightly more complicated, such as:. The final recoupment waterfall for a real film will rarely be as neat as my example. Some complicating factors could include:. This is because before we get our hands on box office income, there are two big deductions.

“We’re going to need a bigger boat”

Some countries also apply other taxes, e. The other big deduction is the amount the cinema a. This is a rather contentious figure as different corners of the industry disagree vehemently as to what split is normal. When I interviewed UK cinema staff in , over a third claimed that high ticket prices were due to cinemas handing over most of the money. Some were quite senior and I am confident that the figure I built up is an accurate reflection of the UK market as it stands today. Here are the salient points:. In the words of someone senior in UK distribution:. Exhibitors in general have a bad view of distributors taking all the cash… and also because they use it to justify their concession charges to customers. Below are some definitions and notes to go along with the recoupment waterfall graphic:. I am very grateful to the people who helped me with this article. It seems that there is a real taboo in the distribution sector about going on the record with things like the terms of deals. Some of this may be down to non-disclosure agreements and UK competition law which places limits on what commercial information companies can share with rivals but most seemed to stem from a more general sense of secrecy.

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And now that another major movie house chain has announced it is officially banning patrons from bringing in outside snacks, movie goers will face the choice of either paying up or struggling to hear the film over the sound of their rumbling stomachs. SmartMoney reports on just how much the theaters make at the concession stand:. Instead, customers are there to eat and buy, obviously soda and junk food, at seriously marked-up prices to justify the money the theater paid to the movie studios and distributors for the right to show the film. Will theaters try to stop, say, a mom from feeding her kid a few animal crackers, some Goldfish, or a couple slices of apple? Things could get ugly if ushers start policing the aisles, pointing flashlights at patrons, and asking where that suspiciously normal-sized box of Raisinets was purchased.

Jan Roger Henden July 11, at pm. Many thanks. Stephen Follows December 9, at am. D July 22, at pm. Alongside this, the losses at the domestic theatrical market were much worse than internationally.

How much does AMC Theatres in the United States pay?

Epilogue So there you mofie it — a rather long sorry! As Phil Contrino, editor of BoxOffice. Any thoughts? And the numbers only go up with bigger films. An offshoot of this is Product Placement where the studios charge brands to feature their products in the movie. It’s just a relatively new phenomenon for the industry.

Bring on the numbers…

If you really liked a particular movie, and you’re hoping it made enough money to warrant a sequel, then the wealth of box-office news can be confusing. How can you tell when a movie’s a hit? We asked the experts. If you even pay a little attention to what’s going on in the entertainment industry, it’s easy to get snowed in with box office information that seems meaningful, but is hard to interpret.

If a movie’s number one in its opening weekend, does that mean it’s automatically a hit? Or is the percentage drop between the first and second weekends the important number? And so on. News outlets tend to report lots of box-office data without giving that much context. As Phil Contrino, editor of BoxOffice. They look at the opening weekend — and instantly a movie is a success or a failure. Sometimes, a film can do well in its first weekend and then stumble in later weekends.

Or a film can develop «legs,» like Christopher Nolan’s Inceptionand win a few weekends in a row. Studio accounting, designed to make sure people don’t collect on back-end deals, is a marvel. So how do you know if the box-office gods have smiled enough on your favorite movie that studios are likely to greenlight similar films?

The short answer is, it depends on a number of factors, but a rule of thumb seems to be that the film needs to make twice its production theager globally. For the longer answer, read on. There’s a lot more, although studios are loath to give out numbers. The studios seldom release accurate production budgets — and they’re even more leery of revealing how much they spend on other stuff, like promotion.

That’s because those films are often romantic comedies or kids’ movies, which are cheap to make but still need a lot of promotion. And the numbers only go up with bigger films. Of course, the promotional expenses are different for each film — Contrino points out that Fox didn’t seem to waste much money promoting Gulliver’s Travelsonce it was clear they had a dud on their hands.

So Gulliver didn’t lose as much money as it could. And in some cases, a studio will actually have less money at stake than the film’s production budget — sometimes, the distributor will just acquire an already-made film for a small fee, plus marketing costs, says Gitesh Pandya with BoxOfficeGuru. In those cases, the studio can make a profit even if the film doesn’t make back its production budget.

You might have noticed that studios are pushing a lot harder lately to make a film as big a hit as possible in its opening weekend. And films tend to open on more screens right away — a typical big film will open on 4, screens, instead of the hundreds of screens it would have opened on in the s. And it used to be true across the board that the opening weekend was when the biggest percentage of profits went to the studios.

In the past, studios «strong-armed exhibitors into these front-loaded deals, wherein the overwhelming majority of the opening weekend take goes to the studio,» says David Mumpower with Box Office Prophets. Eventually, by the fourth week, the studio’s cut has fallen to around 52 percent in most cases. But after a bunch of theater chains declared bankruptcy in the early s, these frontloaded deals started to fall out of fashion, says Doug Stone with BoxOfficeAnalyst.

Nowadays, with many mohey the theager Hollywood blockbusters, the theater chains just get a standard cut of the whole revenue, regardless theatdr which weekend it comes in. The percentage of revenues that the exhibitor takes in depends on the individual contract for that film — which in turn depends on how much muscle the distributor has, according to Stone. Kovie deals often protect the theaters from movies that bomb at the box office by giving the theaters a bigger cut of those films.

You can actually look at the securities filings for the big theater chains, to look at how much of their ticket revenues go back to the studios, points out Stone. So for example, the latest quarterly filing by Cinemark Holdingsshows that So as a ballpark figure, studios generally take in around percent of U.

The highest profile example of a film that bombed in the Acerage. And a similar thing happened with the previous Narnia movie, Prince Caspian. Another big film that made way more money overseas than domestically was Terminator Salvation.

So if a film does incredibly well overseas but flops in the U. As with everything else to do with box office, the answer is «it depends. According to the book The Hollywood Economist by Edward Jay Epstein, studios take in about 40 percent of the mlvie from overseas release — and after expenses, they’re lucky if they take in 15 percent of that number.

Domestic revenue just counts for a lot more than overseas revenue, says David Mumpower with Box Office Prophets:. The reason gheater this is simple. Collecting revenues abroad is a trickier proposition since the dollar fluctuates against foreign currencies.

There are also tariffs from these governments in place in order to keep as much money as possible from leaving their countries and going abroad, which is mudh understandable practice. While the global conglomerates such as Fox, Disney and Time-Warner that run major Hollywood studios can secure sweetheart deals with various local governments, it doesn’t happen for each film. As such, international box office revenue is much less reliable than in North America. But still, overseas box office does matter, more and.

And stars who have a huge global following are more likely to open a movie than ones who are only famous in the U. A shocking number of releases did better abroad than in North America, which makes sense when we consider population numbers. It’s just a relatively new phenomenon for the industry. Avatar’s performance is a great demonstration of global expansion.

That’s how important the global picture averqge become to Hollywood studios. And the studios get a much bigger cut of DVD revenues than they do of theatrical revenues, because the retailers aren’t as «significant of a middle man» as the theater owners, according to Paul Dergarabedian, president of Hollywood.

There are a lot of costs that go into doess a movie theater, and showing movies is all the movie theater does — unlike most places where DVDs are sold. There are some genres of film that do especially well on DVD — like horror films, which are often cheaper to make than other genres to begin with, says Dergarabedian.

A horror movie might or might not break even at the theaters, but it’s sure to make lots more money when it hits DVD. But actually, the trend towards studios depending on DVD sales may have peaked already — infor the thheater time in a decade, theatrical box office revenue was bigger than home-video revenue, says BoxOfficeAnalysts’ Stone. Movir this seems to be continuing into Perhaps because of piracy or the popularity of Netflix, DVD sales aren’t keeping pace with ticket sales any.

Says Stone, «Studios can no longer rely on as robust an ancillary market to prop up a failure at the box office. That’s one reason why you’re hearing so much about 3-D — those higher ticket prices are a way to plug the revenue hole from disappointing DVD sales. And studios are going to start investigating premium video-on-demand services more, as another way to shore up their earnings, says Stone. The A. Charlie Jane Anders. Filed to: Movies. Share This Story. Get our newsletter Subscribe.

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