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The Money of Movies - How Movies Make Money

What does it mean when the papers say a movie grossed $40 million on opening weekend? And what non-theatrical releases? Jeff B. Cohen breaks it down in simple terms looking at the different way movies make money.

…The box office number we see in the news is usually the gross revenue from tickets sold to the film in the United States. Only a percentage of that is paid to the studio releasing it. The total the studio receives is called the theatrical film rental, and it’s subject to negotiation and takes myriad factors into account, including the buzz surrounding the movie. A major studio is usually paid between 40 and 45 percent of the box office. For a hit, that rate may climb as high as 55 percent. An independent distributor may receive as little as 33 percent. And the percentage usually decreases the longer the film plays in theatres.

What about all the revenue from those $10 bags of popcorn and $8 gummy bears? One hundred percent of that goes to the theatres. Sorry, Warner Bros. 1994 was the first year that foreign theatrical revenue was actually greater than domestic theatrical revenue. These days it’s not uncommon for a film to generate more money overseas than in the U.S. Studios utilize foreign subsidiaries or subdistributors to distribute their films in other countries, and because of this middleman, the studio often receives a smaller percentage of the gross from foreign theatrical distribution than from domestic.

— Backstage.com| Read The Full Article

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Tags | Box Office, Distribution, General Distribution, non-theatrical release, revenue, theatrical release