The film industry is a massive business, making well over 10 billion dollars annually on cinema sales in the United States alone. Despite its massive haul, the business is not as profitable as it would seem on paper. A lot of movies fail to garner anywhere near as much as a studio would have wanted, and some turn into huge loses for their studios. 2011’s Mars Needs Moms for instance is considered one of the biggest box office bombs in recent memory, as it only grossed 39 million worldwide on a 150 million dollar budget. While a loss of 110 million would be bad enough for any studio, the story of Mars Needs Moms’ box office performance is actually a lot worse than you might think.
In order to understand exactly how poorly the film performed, you need to know two things about box office analysis. The first is that a movie’s reported production budget only represents what it cost to make the film itself. It does not include costs for marketing and distribution. While those costs vary from film to film, it tends to follow that the bigger the budget, the more a studio will spend to market it. If you look at http://ispot.tv, a site dedicated to following TV ad spending, you can see that most films spend a minimum of 15-20 million dollars. This is only for TV ads in America, and does not include ad spending in other countries or online.
The second thing it’s important to keep in mind while watching box office results is that a studio only keeps about 50% of a film’s gross, while the other 50% goes to the cinemas. The exact division of gross does vary a bit from studio to studio, as well as country to country when looking at the international market, but on average it tends to be a 50/50 split between a film’s studio and cinema chains. As such, a simple rule to keep in mind is that a movie needs to make at least double its production budget before it’s considered to have broken even.
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If we return to Mars Needs Moms for a second look with those things in mind, we see how disastrous the box office haul of the film really is. It had a reported production budget of 150 million, and a likely marketing budget of at least 50 million worldwide. So the film had a likely cost north of 200 million, yet it only grossed about 40 million at the worldwide box office. Once the cinemas took their share, the film’s studio would only get about 20 million, for a loss of approximately 180 million. While they’re likely to have recouped some of that loss through DVD sales, potential merchandising, and TV screenings, the film did end up costing its studio a lot of money.
It is also important to note that not every movie that loses its studio money is considered a flop or a box office bomb. This depends on how poorly it does overall. While a film like Mars Needs Moms is a definite bomb, a film like Gods of Egypt (145m haul on 140m budget) is a softer loss, though still a big disappointment for its studio. Comparatively, a film like Alice Through the Looking Glass (290m gross on a 170m budget) is considered a small loss, as the studio is likely to close some of that initial box office loss through DVD sales and TV screenings. The closer the film gets to doubling its production cost during its initial box office run, the softer you can consider the loss for the studio.
