Tuesday, August 20, 2013

Fun with Numbers: Moneyball with movies

If you saw Moneyball, you probably remember how Brad Pitt's Billy Beane revolutionized the baseball scouting mechanics by focusing not on the typical stats that seemed to assure success - but by scrutinizing a player's on-base percentage.  Thus, Beane was able to identify undervalued players who were capable of getting on-base and thus, in a position to score.  When you can stock the bench with guys less likely to strike out or get tagged out, your odds of bring those guys back to home plate also goes up.  And that means runs.  Several base hits can add up to being as good as a home run.

Unfortunately, in the film industry, we seem to have not learned that lesson.  Spielberg and Lucas got a lot of attention last month when they decried the negative impact of the studios focusing only on tentpoles.  Spielberg complained that Lincoln nearly ended up on HBO and they predicted that the whole industry would eventually implode when too many of these films tank.  Basically, Hollywood seems to be only going after the home run hitters.

But what about the movies that can get "on-base?"  Let's take a look at five of this past summer's sleeper hits.

The Conjuring - $20M Budget / $127M domestic gross / $193M worldwide
The Purge -        $3M / $64M / $83.6M
The Heat -         $43M / $155M / $204.8M
Now You See Me - $75M / $116M / $274M
This is the End - $32M / $96.5M / $112M

Total production budgets for those five films - $173M
Total worldwide gross of those five films - $816M

So even if you were to assume $40M each in marketing costs for those films, that means that less than $400M was laid out for a return of $816M.  Not bad, wouldn't you say?

Interestingly enough, Now You See Me is the only one where the domestic take of the worldwide gross was less than 72%. (57% of Now You See Me's gross came from overseas.)  And hey, look at that - all five of those films are original ideas.  Four of the five also happen to be R-rated, which is an interesting trend.

The Lone Ranger cost $215M (yeah, right), which means that for the cost of that film - all five of the summer sleeper hits could have been produced with plenty of money left over.  Thus far it's only made $87M domestically (outgrossed by all of the above films but The Purge) and a mere $217M worldwide.

Pacific Rim cost $190M, which is still more than those five films combined.  It's made $384 worldwide.  That's better, but it's still not great.

I'm cherry-picking, of course, so let's take a look at a film that's considered a hit: Man of Steel. It cost $225M to produce and took in $289M domestically.  Worldwide, that's $648M, which again, still doesn't really rival the five films there.  (Unless the marketing costs for those five films was significantly higher than assumed.)

Somebody at the studios has to notice this eventually.  I know that if I was running a studio, I certainly would be interested in getting five at-bats for the cost of one Lone Ranger.  This summer's been a grim reminder that while some big bets CAN get big returns, they're also capable of yielding large deficits.

There's money to be made from the base-hitters. Hopefully that won't be forgotten any time soon.


  1. I recently read the source of 50% of the money the major studios get to finance movies comes from hedge funds. Hopefully, they will apply pressure to get studio heads to form a line-up of less expensive, solid players and rely less on a couple of mega-priced superstars. Please answer me this one BSR. I've heard that theaters make next to little on box office receipts on new releases. It's the popcorn, etc. where they make their dough. So why not as Spielberg eluded to, charge less for smaller films and more for tentpoles? I for one would see more movies in a week or month if I could save a couple of bucks and have more left over for Milk Duds. My local multiplex has seven screens but uses 2-3 for the same movies in 3D. Really? And keep on ignoring the over 25 year-old demographic that has become less seduced by CGI flicks with no story and see what happens. I'm reminded of a trade publication, it's called "Variety."

  2. Good points. Box office success still comes down to a good script and, to a lesser extent, strong direction and acting. I'm still amazed at the amounts of money spent on these franchise-aspiring mega-priced flicks, particularly when the underlying story is weak. Hopefully, H-wood will take your point to heart and look for solid screenplays that can be produced at modest costs.

  3. Theaters take 50% of the revenue for the first X number of weeks of a film's run, correct? Obviously that affects all movies with a theatrical run by an equal percent - just wondering if you're factoring that into your analysis.

  4. I'm going to impersonate Billy Beane next time I have to do a meeting that involves money talk.

  5. Too bad Hollywood is "risk-adverse" rather than championing a great original story, when in actuality the lower budget original stories are less risky.

    (And Steve, theaters get much less than 50% during the first weeks of a film's run. It's much closer to 5-10%.)

  6. @LFGabel -- It's not just the Hollywood machine that's risk-averse.

    I try to read every new script I can find, and one thing's for sure: No risks are to be found in the vast majority of those. They rigidly adhere to the current formula.

    Themes, concepts, premises, stories, plots, schemes; same old characters doing the same old things the same old ways; dialogue you've read and heard hundreds of times, already.

    It doesn't matter whether it be a hundred-million-dollar popcorn superhero tentpole script or a hundred-dollar indie horror-slasher... It's all movies-by-the-numbers by people who have trained themselves via the likes of Syd Field, Lew Hunter, Blake Snyder, and the thousands of sites such as this one.

  7. I realize that this isn't the forum to point this out, but while these films did well, and will all have sequels, how's their toy lines, DVD sequels and theme park rides doing?
    I'll take a Barry Bonds over a Dustin Pedroia EVERY DAY OF THE WEEK. This is an industry that can afford a Pujols or two, because to use your LR example, Disney has already made billions off Depp, and will make a few billion more yet, and that's NOT counting ancillary income.
    The striking one on that list is 'Now'. The level of risk to greenlight it, then open it wide was HUGE. Hat tip there.

  8. Oh, and Spielberg can eff off. Lincoln should have been an HBO mini. More people would have seen it!

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