The Young Executive

Ticket prices are higher than ever. It’s no surprise that the bar continues to be raised for highest grossing film. Back when Titanic hit the record tickets were roughly between $5-$9. Nowadays its upwards of $15 a ticket. Therefore is it fair to call Avatar the most successful film ever? There’s a great article in the LA Times today that discusses how box office records should be based on ticket admissions rather than dollar gross. I would have to agree.

Check it out: LA Times Article on Avatar Number One Record

It’s important to understand box office grosses. What does a movie that cost $30 million in production need to make overall to turn a profit? Well something important to remember is that a studio doesn’t just calculate the production budget, but as well as what the film costs in marketing and distribution.This can easily make that $30 million budget into $60 million.

Let us take for example the Universal film Public Enemies. It had a physical production budget of at least $110 million. The marketing of the film cost roughly another $75 million. Finally to distribute it worldwide cost another $70 million. At the end of the day this film costs $255 million. So in order to turn a profit the film would of course have to surpass this number to be considered a box office success. According to Box Office Mojo, Public Enemies made $214 million worldwide. It’s safe to conclude this was a loss for Universal.

Now a common misconception of film budgets are that people only look at physical production costs. It’s a little known fact just how much costs goes into marketing and distribution. Therefore if you would like to roughly assess what a film is going to cost just double the number of what you believe it would cost in physical production alone.