Most films lose money. Indeed, 80% do. The fundamental reason for this phenomenon is simple. If you were trying to impress someone at a cocktail party, what would you rather say: “I make movies” or “I make widgets”?
Taking the US as representative of the global independent film market (again, this should be taken with a pinch of salt), while more than 40% of studio releases are likely to turn a profit, less than one-third of independent producers stand to recoup their investment on a film.
They had perfectly average production budgets and expenses for movies of their scale. Their lack of profitability, in fact, is typical. Over 80% of Hollywood movies fail to turn a profit.
What percentage of Hollywood films are considered a financial loss?
According to a study by the Motion Picture Association of America (MPAA), around 20-25% of Hollywood movies lose money. Often. There are several reasons for this. Despite the media interest in the Box Office, the Studio expects to lose money on Theatrical Receipts.
Filmmaking is also a very risky investment, since most movies, even those small, intimate dramas, take several million dollars to make. Still, it's definitely a hugely profitable business—if you hit the jackpot (aka the target audience).
Why Box Office Results Don't Explain How Movies Make Money
What percentage of movie profits goes to the producer?
The Investor's Share is typically defined as 50% of the total Net Proceeds. The other 50% of the Net Proceeds goes to the producer (the “Producer's Share”). Any talent and other non-investor third parties who have been promised a back-end share in the movie are paid their percentage out of the “Producer's Share.”
In addition to their basic salary, many actors also negotiate for a percentage of the movie's box office earnings. This is known as a box office bonus or backend deal. It is a way for actors to share in the financial success of a film.
In the film and media industry, if a film released in theatres fails to break even by a large amount, it is considered a box-office bomb (or box-office flop), thus losing money for the distributor, studio, and/or production company that invested in it.
Arrangements differ. However, the movie studio usually gets 60% of the proceeds from American box offices or anywhere from 20% – 40% overseas. This depends on the film distribution arrangements, agreements, and other costs associated with foreign distribution. Theaters receive the remaining 40%.
As of July 2022, the four biggest movie flops of all time were Disney productions. "Turning Red" (2022), "Jungle Cruise" (2021), "Mars Needs Moms" (2011), and "Mulan" (2020) recorded losses of more than 140 million U.S. dollars at the global box office.
The more a film costs to make (and market), the more it has to make to avoid flopping at the box office. Film studios are making fewer and fewer movies as the years go by, but they tend to cost much more over time, so perhaps it's not surprising that there seem to be more and more flops.
The rise of streaming services has contributed to the decline of turnout in theaters. Going to the movies is a beloved experience for many, but has become less popular as of late. In 2021, a notably high 61% of Americans skipped out on the moviegoing experience.
Top movie genres in the U.S. & Canada 1995-2023, by total box office revenue. Between 1995 and early 2023, adventure was the highest-grossing movie genre at the so-called North American box office, which consists of Canada and the United States (including the unincorporated territories of Guam and Puerto Rico).
Everybody gets their money “up front.” If a movie takes a loss, how do the cast and crew get paid? A movies makes a loss BECAUSE the cast and crew are paid. If a movie makes a loss, that means the revenue from box office sales is less than the amount the cast and crew was paid.
When at least 60% of reviews for a movie or TV show are positive, a red tomato is displayed to indicate its Fresh status. When less than 60% of reviews for a movie or TV show are positive, a green splat is displayed to indicate its Rotten status.
A director is the person who directs the making of a film. The director most often has the highest authority on a film set. Generally, a director controls a film's artistic and dramatic aspects and visualizes the screenplay (or script) while guiding the technical crew and actors in the fulfillment of that vision.
Actors are paid differently based on their chosen medium. Generally speaking, for screen work, actors are paid a day rate. If they are needed for more than five days, they are paid a weekly rate. Rates vary if actors are needed for the entirety of the film shoot or the entirety of a television season.
Actors make a wide range of different amounts of money per movie, depending on whether they are considered an A-list star and several other factors. A-list movie stars average between $15 million to $20 million per movie, and some are paid even more.
“Forrest Gump” has never made a single penny for the studio that made it, despite selling over $300 million worth of tickets at the box office. “Return of the Jedi” was a similarly monumental financial flop. Same goes for at least one Harry Potter film. All of them wildly popular, yet wildly unprofitable.
Nevertheless, the aggregate of the massive flops you read about in the media and the small-time failures you never hear about doesn't come anywhere close to 80% of all the film and television made in Hollywood (or anywhere else). The truth is that the majority of movies break even and make a little bit of money.
You do not need to be a member of the union to receive SAG residuals. However, only principal performers working on SAG contracts receive SAG royalties; background actors don't receive residual checks. Principal performers include: Principal speaking roles.
Traditionally, actors and writers are paid for each time a show runs on broadcast or cable television, or when someone buys a DVD, a Blu-ray disc or (long ago) a VHS tape.
