Why Hollywood's Film Industry Is Taking A Hit

Benzinga

Ben Affleck says there’s “some truth” to the idea that Hollywood is struggling — and he says the reason is simple math.  During an appearance on the “All the Smoke” podcast, Affleck explained that it’s very difficult to make a movie for less than $25 million in production costs. Marketing can cost roughly the same, putting studios at about $50 million invested.  Because theaters generally return about 50% of box office grosses, a film would need to gross around $100 million just for the studio to break even.  Key figures: • ~$25M production cost • ~$25M marketing cost • ~$50M total investment • ~50% studio share of box office • ~$100M needed to break even  Affleck argues that when margins are that tight — and streaming, gaming, and social media compete for attention — studios default to recognizable IP and lower-risk bets.

Transcript

00:00Ben Affleck says there's some truth to Hollywood dying, and his reason comes down to simple math.

00:05Affleck explained that it's very difficult to make a movie for less than $25 million in production costs.

00:12Marketing can cost another $25 million.

00:14That means a studio can have about $50 million invested before tickets are even sold.

00:19The problem is theaters typically return about 50% of box office grosses to studios.

00:25So if a film grosses $100 million, the studio sees around $50 million back.

00:31That's before factoring in streaming, competition, social media, and gaming pulling audience attention away from theaters.

00:37When margins get that tight, studios lean into sequels, recognizable IP, and superheroes.

00:44It's not personal, it's just risk management.

Category

Transcript

Comments

Recommended