Like if a movie cost $200 million to make, then the break even is 500 million.
I heard that the .5 accounts for marketing/ PR. But why does it need to make the remaining 2x to break even? If it cost 200 million. Then the .5 is 100 million. So it should only cost 300 million to break even.
Why would it need the additional 200 million and get to 500 million to breakeven?
In: 409
The ticket at the box office is with VAT included (sales tax). Remove that. Then there’s the P&A (publishing and advertising) costs, as you mention. But then there’s a payment structure based on how the film is financed. Rarely (i.e never) is the budget just a single studio ponying up $200 million. There are deferrals, various investing schemes, minimum guarantees and much more. Workout going into detail for all of these things, let’s take minimum guarantees as an example. If you make a movie for 10 million, and you manage to presell it to 10 territories for 1 million each, you’ve fully financed the film with minimum guarantees. Now the movie makes 10 million at the box office. Not only doesn’t that cover your costs, you don’t see a penny of it because the distributors have already paid you that money and you spent it to make the movie.
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