why does a big budget movie require a 2.5x budget just to break even?

Question

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

Answer 1

I’d also like to add that “breaking even,” i.e. getting the same amount of money out that you put in, from an investment point of view would be considered a failure, because you could have just put your money in the bank or the stock market and made an (almost) guaranteed return.