It seems like even before the first weekend is over, all the box office analysts have already declared the success or failure of the movie. I know personally, I don’t see a movie until the end of the run, so I don’t have to deal with huge crowds and lines and bad seats, it’s safe to say that nearly everyone I know follows suit. Doesn’t the entire run – including theater receipts, pay per view, home media sales, etc. – have to be considered for that hit or flop call is made? If not, why?
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Investors care more about how much money they recover now vs the total money they recover long-term. As well, opening weekend performance often (but not always) correlates to the revenue a movie earns throughout its run, giving shareholders a sense of the total return they are likely to realize.
It’s mostly a comparison of expectations to what is actually happening. Especially for these tentpole releases, they have a very clear idea of what demographics they think will see the movie and when. They also have a sense of when those types of people tend to see movies in their run. Those things together can provide a model of how many people will watch each week, even taking into account people like you who prefer to see it later in the run.
When far fewer people come the first week than the model predicts, it’s likely that far fewer people will come, period. Of course, it’s possible that the model only misspecified *when* people would come and not how many (after all, it had to have done *something* wrong if its predictions don’t match reality), but this is rarely the case. If a movie is bad, that reduces its performance with all demographics. If anything, this applies even more to people who like to wait, as it suffers especially from bad word of mouth or leaving theaters early.
Before the movie is even released, the marketing teams at the studios have pretty good idea of how much the movie is going to make. They do research, marketing, and more. They’ve been doing this a long time and are quite good at it.
Upon the release, even the first weekend, they get much more accurate info, and they know how much they need to make in the box office (roughly 2x – 2.5x the production budget) to start move the movie into more profitable territory. So they can see where the trend is going. If its not trending towards those values, they know they are behind the curve, if its trending at or above it, they know they are good to go.
For example, lets say I need to make $300M in the box office, and the first weekend is $200M. Well hell yeah, we’re on the path to success. But if that same movie made $30M, ouch. Because your first weekend is overwhelmingly usually your best, it only goes down from there.
The overall entire run includes everything (PPV, streaming, sales, etc.), but box office performance is the most profitable and largest source, and generally works as a proxy estimate of what the movie will make the rest of its life
The post-theatrical performance of a movie is actually more important and more valuable now than in the past, but all this does is just adjust our estimates a bit here and there, still box office tells us what direction the movie is going in
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So are there “sleeper” hits?
And what about cult movies. How long offer opening weekend/run does it take to qualify?
Box office sales/participation is a pretty well understood system at this point. Outside the occasional outlier (The Greatest Showman was a good example), you can generally plot a movie’s performance for its entire run based on its opening weekend.
That projection is plotted against the movie’s production and marketing cost. The assumption for the industry average is that marketing = production cost. For example, if the movie cost $200 million to produce, the studio will spend ~$200 on marketing. Following this example, that movie would need have $400 million dollars in ticket sales to /break even/. Any movie that fails to break even in the box office or barely breaks even is considered a flop.
I don’t know where this conversation about woke movies is coming from. Movie box office performance is math. If a movie doesn’t sell tickets, audiences aren’t interested in it. That doesn’t mean a movie has no value. Movies can be big commercial failures and still win critical praise.
Producers already have a very “educated guess” on what % of the total revenue is earned in the first week(s).
Iirc for viedo games the 1st month is like 70%, of the sales they will have, so using data they can extrapolate and make a good estimate on how much money they will make or lose.
Another factor I have not seen mentioned yet is how thin theater margins have become over time. There was a time in the past where theaters could keep a movie on their screen(s) longer if they were getting a modicum of viewers.
These days they really need to maximize butts in their seats to have a hope of making a profit. Theaters are much quicker to cut films that are not drawing viewers. Making it much harder for a film that is not an immediate success to grow an audience over time.
Another factor here is pre-sales, people rarely turn up at the box office to buy tickets so studios can pretty confidently say a day or two pre-opening weekend what numbers they’ll do, based on pretty established algorithms determine volume of pre-sale vs on the day ticket sales.
From then on, it’s a case of adjusting the marketing if the movie gets good reviews following the premiere,, 5* across the board warrant increasing the marketing budget.
Ah, so that’s why I always feel guilty for not contributing to a movie’s success until weeks later. Sorry Hollywood!
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