How $100m tentpoles make money!

$100m+ budget movies are known as tentpoles for a simple reason: no company can afford too many consecutive flops at this level.

So why, as Elberse argues they all should, do the big 5 all focus on tentpole or (as Elberse calls them) blockbuster productions?

Remember too that the prints & marketing spend is typically about the same as the production budget which is why, with cinema's cut factored in, box office needs to hit triple the production budget to start making money!!

This excellent stephenfellows feature breaks it down.

So - the true costs of a $100m tentpole actually go MUCH higher.

How on earth do they make money then?!

Well, these days they have a wide range of revenue sources and distribution/exchange outlets.

Even though (pre-covid) we generally focus on cinema (theatrical) box office revenue, this is but one slice of the revenue pie...

There is a clear link to the scale of marketing spend - advertising, bluntly, trumps word of mouth, awards or any other factor, as important as they can be. For Indies without access to such marketing spend word-of-mouth and critical acclaim/awards/festivals are often crucial. 

But never forget that marketing is not an exact science: the epic failure of Disney's mega-tentpole John Carter is a testament to what happens when the marketing message is hopelessly muddled. (This is a screenshot from my post on this)

The global grip of the big 5 is an example of economic, technological and cultural globalisation. As with US TV production, the producers seek to cover their costs with the US market and sell abroad to then make profit. Some movies go into profit from US revenue alone, but typically (and increasingly, especially as China's market grows) the tentpoles rely for profit on international sales.

Fellows neatly breaks down the strong appeal of international markets to the big 5:

The full original article is from 2016, but is still well worth the time to read in full to greatly enhance your understanding of how the big 5-dominated global film market works.

https://stephenfollows.com/how-movies-make-money-hollywood-blockbusters/