Adding It Up: How To Budget A Hollywood Film To Make A Profit

Hunger Games: Mocking Jay Part One was one of the highest grossing films of 2014, earning $713 million worldwide with a production budget of approx. $125 million.
You need to make a lot of money in comparison to your total budget, and that’s where things get tricky.
We know that big blockbuster films can make millions — sometimes billions — of dollars at the box office. But what you might not know is how much they cost to make, and how much they depend on huge global sales to make back all of the money they require not only to make the films (the actors, the creative professionals and crew behind-the-scenes, and the special effects, to name only a few) but to market them as well. In fact, just the marketing campaigns for major blockbusters can add tens of millions of dollars to the total budget to get the films talked-about and, hopefully, seen.

That means that you need to make careful calculations about how to spend money, even though at hundreds of millions of dollars, budgets can seem just about endless for major blockbusters. “A-list” acting and creative teams responsible for the production and post-production (including things like special effects and editing) are expensive, and after budgets and marketing costs are added up, even hundreds of millions in box office revenue may not be considered a true “hit.”

To be really successful, you need to have a high margin of profit — that means that just making a lot of money isn’t enough. You need to make a lot of money in comparison to your total budget, and that’s where things get tricky. The more big name actors, heart-pounding action, special effects, and other explosive, eye-catching aspects you have, the higher the budget, and the more you’ll need to make back later.

Paranormal Activity (2007), the most profitable movie of all time grossed nearly $200 million with from a shoestring budget of just $15,000. What percentage did they return on their investment?

That’s one reason why big-budget blockbusters tend to revolve around globally famous characters (like superheroes), big action sequences, and animation. All of these techniques are easy to alter and export from one country to the next by changing the language or inserting country-specific scenes (like these different references used in Captain America 2: Winter Soldier that appeal to different countries’ cultural events).

Do you have what it takes to plan a blockbuster that won’t make you go bust?

Media

Some media may contain mature content. Discretion is advised when viewing with students.

Lesson Plan

In this lesson, learners will apply mathematical problem-solving to put together the budget for a major Hollywood film and then determine how much money they will need to make to turn a profit.

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Lesson tags: Eleventh, Featured, Film, Hollywood, Math, Movies, Ninth, Tenth

DCooperMoore

David Cooper Moore is a Philadelphia-based filmmaker and media educator. He has contributed curriculum, video resources, and scholarship to various schools, non-profits, academic centers, and media companies. He is a co-author of the book Discovering Media Literacy, a teacher's guide to elementary and middle-level digital and media literacy education. You can learn more about his work online and find him on Twitter at @dcoopermoore.