Making films is expensive. The average production costs across all genres have risen exponentially over the last decade or so. A blockbuster nowadays normally costs no less that $200 million, with plenty reaching over $250 million.
Big production costs, naturally, beget big revenue demands. Even when films make massive sums of money, they can still be considered failures, due in part to the gargantuan costs of production.
But there is a hidden cost. While the cost of the general production is usually stated by the studio outright, they keep some of their expenses to themselves.
The most expensive hidden cost tends to be marketing (often called 'prints and advertising'), including all trailers, posters and big TV spots. Getting a trailer at the Super Bowl, for instance, can cost millions.
Because of these hidden costs, the general rule of thumb in figuring out if a film is profitable is to double the general production costs, to account for marketing. So a $250 million production like Christopher Nolan's latest Tenet, is actually closer to $500 million.
Even with this rule, many films, even after exceeding this break even point, are still considered failures. Hollywood is a funny place.
10. The Good Dinosaur
Pixar films are usually a guaranteed hit at the box office. They have produced the most commercially successful animated films in history, and have won numerous Oscars to back up their already impressive ability.
It came as a shock then when The Good Dinosaur didn't preform as well as expected.
The Good Dinosaur did gross over $332 million worldwide against its large production budget of $175 million. On the surface this seems like a decent profit. It made its budget back and more, right?
Well, the dubious nature of Hollywood accounting meant that the film actually incurred a loss. A rather large one of $85 million. Not a number any studio wants to lose.
This was due to the film's massive marketing costs, which doubled the budget and then some.
Although it seems insane to spend so much on marketing, it makes sense considering the studio spent $175 million on the production alone. With costs that high, the studio wants to make sure people see the film, and this requires big marketing expenditure.
It's a double edged sword though, sometimes it works, other times it fails.