As usual, the industry is finally catching up with the Outpost. The cost of movies has been one of our constant discussion points in our community, down in the Disqus. We have been talking about this since the start of COVID. Now Hollywood is waking up. A report in, arguably, the premier trade Variety has talked about the big losers of the year at the box office and finally talks cost.
Disney and Paramount are both staring down the barrel of potential big losses this season. Indiana Jones and the Dial of Destiny and Mission: Impossible – Dead Reckoning Part One will cost their studio over $100 million each in losses over their theatrical run. The killer was the global box office simply not being so excited about huge, legacy US franchises anymore, and the massive costs of blockbuster movies these days.
Grosses are between $200 million and $400 million down from the last installments in the franchises. As legacy franchises, they are aimed at older audiences, and then there was that budget. $300 million or more in both cases, without marketing. Shawn Robbins, chief analyst at Boxoffice Pro says:
“These movies would have been a lot more economical if it weren’t for COVID. But even if that meant their budgets were inflated, at the end of the day, these movies cost what they cost and performed how they performed.”
Mission: Impossible will, like Disney’s Elemental, squeeze out a small profit over a long time when you factor in home entertainment, rights, and licensing revenue. Analysts also say Fast X, with a $340 million budget, will just about turn a profit once all the moving parts stop and the dust settles, but these will be tiny profits before “Hollywood Accounting”. Under Hollywood rules, Return Of The Jedi still hasn’t made a profit on a $38.5 million budget (adjusted for inflation, $118 million today).
Jeff Bock, an analyst with Exhibitor Relations, says:
“There’s an opportunity to make money back with streaming and other sales, but that’s long into the future. It’s playing the long game instead of the short game. They don’t want to be profitable in 25 years.”
To give an idea of the scale of the problem facing the industry, in 2023 only four films have surpassed $700 million worldwide. There were twelve in 2019, immediately pre-COVID. Of those that have, movies like The Super Mario Bros. Movie, Barbie, and Oppenheimer had significantly lower budgets, around half of Mission: Impossible and Dial Of Destiny.
Look for $150 million budget ceilings to be applied to productions. Not good news for people who will have to thrash out new contracts post-strikes.
Check back every day for movie news and reviews at the Last Movie Outpost
