New York 2006

Let’s talk about how the income of a Hollywood movie is calculated
  I saw a comment saying that a Hollywood movie needs three times the global box office to be profitable in order to make a profit. This is not true.

So let me talk about how the income of a movie in Hollywood is calculated.

The following information comes from the profit distribution of major Hollywood movies produced by the American Motion Picture Association.

The income of a Hollywood movie is strongly correlated with the movie's global box office.

The Hollywood movie market is roughly divided into two markets: North America and overseas markets. These two combined are the global market.

The North American market is Canada and the United States. In these two places, the share of movies is higher and the income from home entertainment is also higher. So for Hollywood movies, the most important thing is the North American market.

But we won’t go into it separately here. The calculation method in the book is basically calculated according to the global box office, so we can just follow the overall global calculation given by the American Motion Picture Association.

Earnings from a Hollywood movie.

The after-tax share of the global box office is about 40%.

Home entertainment income, such as DVD, on-demand, streaming media, etc. It probably accounts for 52% of the global box office. (That’s why it’s said that home entertainment revenue is higher than movie box office.)
  Distribution fees account for approximately 19% of the global box office.

There are also some income from toys and licensing, which I won’t go into here.

for example.

For example, Marvel's "Iron Man" in the book has a global box office of 5.85 million.

The approximate global box office revenue is 5.85*40%=2.34
  Family income is about 5.85*52%=3.042
  The total is about 5.38, and then Paramount, as the publisher, wants to take 30%, which leaves only 3.76 million dollars.

This 3.76 million yuan is Marvel’s revenue. Then subtract the production cost of 1.4 million yuan. The net profit is about 2.4 million yuan.

These data are approximate values. If you really want to calculate them, you have to refer to the distribution contract, actor sharing, and many other details.

The contract signed between Marvel and Paramount covers all distribution fees. Marvel does not have to pay distribution fees, so Paramount has to share 30%.

In the book, Logic Pictures and Warner Bros. share distribution costs equally. So Warner can only take 15%.

…………     The above are just rough calculations. For some popular items, dark horse income may be higher than this ratio. Some movies last forever and generate a steady stream of revenue.

Like "The Man from Earth," it didn't do much at the box office, but it made a lot of money for the family.

In short, after more than a hundred years of development, Hollywood's various systems have become very mature and very transparent.

When it comes to Hollywood making money, it usually starts with production fees. Fake accounts and deliberately raise production costs.

If there are a lot of third-party supervision after the box office comes out later, the operating space will be much less.

Some publishers cheated them out of money because there was something wrong with the contracts they signed.

For example, there is no stipulated ratio for issuance fees, no supervision of the use of issuance fees, and issuance fees must be deducted from profits.

These distributors may quote high distribution fees. People in Hollywood generally know this, but many foreign companies are not clear about it.

I've seen some people say that distributors are at the top of the Hollywood food chain and control everything.

This is a bit nonsense. It’s not just the big six publishers in Hollywood, but there are also many other second-tier and third-tier distributors. It’s just that the big six have relatively strong distribution capabilities.

Moreover, the Big Six are not monolithic; they have to compete with each other. They all want to make money by releasing movies. However, they have a tacit understanding and will not deliberately lower the share ratio to compete maliciously.

Good movies, especially excellent movies and blockbuster movie series. There’s really no shortage of publishers.

Under normal circumstances, the six major cities win over capable independent film production companies, sign long-term distribution contracts with them, and provide them with relatively good distribution conditions.

I have read some novels before that deliberately created contradictions, saying that the six major publishers did not pay for the distribution contract signed by them, and that they were cheating money.

This kind of thing rarely happens. The Big Six also need business credibility. If you have no bottom line and make money, no independent film company will be willing to find you for distribution.

If there are conflicts between them, they will only give you poor schedules, poor issuance, or delayed payments. The Big Six don’t dare to cheat money blatantly.

(End of this chapter)