I saw an article that the movie “I.S.S.” made 1.2 million this opening weekend. I’m no movie expert but I’m guessing it cost a lot more than that to make.
Not trying to make an argument about whether they’re good or not, but it seems that the last 4 or 5 WB/DC Super Hero movies bombed hard, too. How does WB continue to make movies if each one makes less than it cost??
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Something you’re not considering is that profit can still be made after the opening weekend and from merchandising. Take Star Wars for example, 2/3 of the profit from Star Wars is from selling merchandise, 1/3 of the profit is from ticket sales.
Because when they *do* have successes, they make so much money that it more than covers the losses of the duds.
If it’s an independent studio, they may have completely financed the film via distribution deals and other deals made with Executive Producers. In this case, the distributors lose money, not the production company.
A major studio film can survive bombs, because they have a bottomless pit of money to play with, and they make money via other successful films that have been produced.
However, distributors and independent film companies do go bankrupt all the time. It’s an incredibly risky business.
One big hit pays for all the bombs, and most of the bombs eventually may break even with VOD and/or international markets.
Also, some studios just flat out have low ceilings for their budgets. Blumhouse has a lot of films, that don’t make 10x their budget, breakeven because they may set a production budget of thir films to something like 5MM before marketing which is relatively reasonable in terms of hitting a breakeven point
Edit: I gave myself a ticket for improper grammar
Looks like the budget for I.S.S. was $13.8m which is very low. A $1.2m opening weekend in the US means it will probably be profitable eventually once you factor in international distribution and streaming rights.
Or take some DC bombs, Blue Beetle had a production cost of $104m and a worldwide earning of $130m as of last October, that will surely be higher with additional distribution and streaming.
Now it’s not quite that simple because there are distribution and promotion costs, though these are usually assumed by a technically separate company with creative accounting… But in general a lot of “bombs” don’t really lose money, or at least not huge amounts. And with those that do, you make up for it with tax writeoffs, longer lifetime earnings and the occasional blockbuster. If you look at something like avengers endgame, it cost around $330m to make and has so far earned a lifetime revenue of around $2.8b. That covers a lot of duds.
Good risk management. Studios know some percentage of their movies will be bomb, but hopefully it’s less than the percentage that breakeven and the percentage that make money. So they allocate resources accordingly, hopefully figuring out early enough in production which are the bombs and which have promise and need more resource allocation (e.g. marketing push).
Creative accounting. A lot of these movies don’t lose the money they officially state they do.
In addition, with the above mentioned tactic, they can avoid paying a lot of tax and money promised to Actors etc.
Also movies are a long game. Sure a loss right now sucks, but over time so many movies just keep making money. I watched gladiator the other day on like TNT or some cable station. That movie was made in like 99. It is still bringing in money and has been doing so for a quarter if a century.
I do statistics professionally (PhD and all!) a “bomb” is not classified as a film that loses money, but one that doesn’t make 2x budget in the opening. It gets a little weirder with streaming, but there are a lot of “bombs” that eventually break even. That’s piece 1. Piece 2 is that the film market is like the stock market. You want a diversified portfolio, some films will do worse than projected, some better, and on average the money earned is more than money spent so studios make money and stay in business.
Well, until they don’t. So, if a studio sucks and picks a lot of films that make less than what they cost they have 3 choices: 1) eat the cost, write the loss off on taxes and don’t release the movie at all, then disband the company. 2) realize you can’t make it work but maybe someone else can and sell the film to a bigger producer/cable/Netflix. 3) have an otherwise robust portfolio where other films make money so you eat this one, write off some loss, throw it low on streaming and hope someone loves it later because of a cool song or dumb podcast.
A lot of “bombs” failed to make money on paper because when it became apparent they weren’t going to be blockbusters the studio tacks on every possible cost for the studio to make the loss as bad as possible for tax breaks. Utilities, office staff, advertising that doesn’t just cover the movie, airfare, security in the lots, warehousing… The list goes on and on. They’ll do similar accounting to avoid paying contracts based on profits. You can make movies with billion dollar box office totals seen like they’re perpetually just about to break even.
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