Here are questions I asked an insider, David Lieberman, who tracks the financial side of the film industry. Below that is his response.

My questions:
I am a boxoffice enthusiast and I am always eager to learn more about how boxoffice receipts, etc can be used to determine profitability or loss.

My assumptions:
Studios generally take half of a WW gross. Correct?
When calculating costs, one must consider P&A. Obviously. However, from the Deadline reader comments, there are things such as "studio overhead" and "15% going back to distributors"?
Boxoffice receipts account for 20% of a gross, according to a Deadline reader comment. Correct? What are the other major sources of revenue common for films? I'm assuming merchandising (Cars comes to mind) and DVD/TV rights but do they really account for 80%?

Final question, where can I find the ancillary revenue info? A Deadline reader stated that Cars made $9bn in merchandising. Seems too high but I have no basis.

Thank you for taking time out of your busy schedule to help me better understanding the money side of the industry and how these studios stay afloat.



His response:



Thanks for writing. As a rule of thumb you can say that studios take about half of the gross. It can vary with different movies, and different territories. You can also use 15% as a rule of thumb figure for distribution. As for other movie costs, they really vary widely – which is what makes it so difficult to estimate film profits from the outside. As far as revenues sources go, worldwide it breaks down: broadcast networks 35%, home video 27%, theatrical 16%, basic cable 8%, pay TV 7%, PPV/VOD 4%, merchandise licensing 2%, and digital 1%. The breakdown for domestic is a lot different: Home video 40%, theatrical 25%, basic cable 12%, pay TV 8%, PPV/VOD 5%, merchandise 5%, digital 3%, and broadcast TV 2%.

For licensing revenues by film, the best sources are License! Global, and The Licensing Letter – but they don’t always report by film title. Sometimes studios will disclose, but not always. Disney was proud of its Cars 2 effort, so it’s possible. As far as the $9B merchandise figure for Cars goes, if it’s correct –and I don’t know whether it is – then it refers to retail price. In other words, most of the cash would go to the retailer and manufacturer. It can still be meaningful for a studio, but not $9B meaningful.





David Lieberman bio:
http://www.deadline.com/about-dhd/