Future of Paramount includes Star Trek tentpole

[RAMA]

RAMA, I want your figures to be true, I really really do, but I fear you may be operating from optimism bias. Bill explains the situation well and sounds a little more likely. I guess none of us will know for sure except Paramount.

I've done a lot more research, twice since the movie came out. I also posted graphs and figures about secondary income for Hollywood. I'm actually correct, though as I've mentioned, it's very difficult to prove in exact terms. I did some extra research recently to find more revenue info but it's elusive. I'm sticking with my estimate, and per the CEOs mouth Trek is still a tent pole (despite not making $500 million in BO) and ST4 is still highly likely.

RAMA

 

[Jax]

ST4 will happen, I have no doubt about that.

 

[RAMA]

Take 343 divide it by two, and then subtract from the total cost.

Since it's already counted you have to take it from $343. Then add $160 million in secondary revenue. You guessed it...$100 million profit.

 

[BillJ]

I've done a lot more research, twice since the movie came out. I also posted graphs and figures about secondary income for Hollywood. I'm actually correct, though as I've mentioned, it's very difficult to prove in exact terms. I did some extra research recently to find more revenue info but it's elusive. I'm sticking with my estimate, and per the CEOs mouth Trek is still a tent pole (despite not making $500 million in BO) and ST4 is still highly likely.

RAMA

You aren't correct, because you're using an inaccurate formula to count the revenue. No matter how many times you add it up, it is incorrect to use the $343 million dollar box office total. Paramount only receives half of that amount.

Then there's the fact that they receive no actual cash from the EPIX deal, and we don't know how much of this supposed $200 million dollar China deal they actually collected. Those contracts usually aren't cut and dry, but depend on sales milestones.

 

[PixelMagic]

I've done a lot more research, twice since the movie came out. I also posted graphs and figures about secondary income for Hollywood. I'm actually correct, though as I've mentioned, it's very difficult to prove in exact terms. I did some extra research recently to find more revenue info but it's elusive. I'm sticking with my estimate, and per the CEOs mouth Trek is still a tent pole (despite not making $500 million in BO) and ST4 is still highly likely.

RAMA

Well, I hope you are right. As I'm sure you're aware, Paramount has undergone a big shakeup of management as well as markeing depts. I hope they can bring about the Star Trek 4 we all want, and I hope it can make a decent profit. They might not be thrilled that Star Trek can't hit 1 Bil, but I suppose if future sequels kept pulling in $500 mil ww box office, they could be happy enough with that.

 

[BillJ]

...but I suppose if future sequels kept pulling in $500 mil ww box office, they could be happy enough with that.

They would have to drive down the production and marketing costs. Which might affect people's interest.

 

[Jax]

Star Trek Beyond suffered from an inflated budget due to a botch production at the start, all Paramount needs to do is control the budget and they can make good profits off Star Trek movies.

 

[RAMA]

You aren't correct, because you're using an inaccurate formula to count the revenue. No matter how many times you add it up, it is incorrect to use the $343 million dollar box office total. Paramount only receives half of that amount.

Then there's the fact that they receive no actual cash from the EPIX deal, and we don't know how much of this supposed $200 million dollar China deal they actually collected. Those contracts usually aren't cut and dry, but depend on sales milestones.

I estimated the deal at $40-100 million. I only use an avg figure. If I use the higher figure then the revenue I gave is even higher already. I'm being very conservative.

Each rights deal is somewhere in the $15-30 million range as well(Hulu--I believe Hulu was reported at $30 million specifically/Amazon/Cable/Apple, etc). Count up how many rights they have. Also then Paramount gets a piece of the pie when people buy them.

 

[RAMA]

Star Trek Beyond suffered from an inflated budget due to a botch production at the start, all Paramount needs to do is control the budget and they can make good profits off Star Trek movies.

While most of us agree on this point, my guess is Paramount will only reduce it slightly at best. I think they will go the other way and bring in more or bigger partners on it.

 

[BillJ]

Each rights deal is somewhere in the $15-30 million range as well(Hulu--I believe Hulu was reported at $30 million specifically/Amazon/Cable/Apple, etc).

I call bullshit. There's no way Hulu or any streaming outfit could pay $30 million per blockbuster and stay in business.

You might want to figure $30 million total (most likely less) across the three that currently have it: Hulu, Amazon Prime and EPIX.

 

[Relayer1]

ST4 will happen, I have no doubt about that.

I'm not so sure. I'm not exactly sure I want it to either - they started off O.K. and got steadily worse in my opinion. I'd be happier if Trek just goes forward on the small screen.

Not wanting to rain on anyone's parade that did enjoy them, let's just say that if there is a fourth one I hope it is stylistically very different from the first three. Much lower budget, less effects driven, less frenetic. Plot and character driven with the effects spend held over for where it's absolutely necessary.

They might even make a profit that way...

 

[Jax]

I call bullshit. There's no way Hulu or any streaming outfit could pay $30 million per blockbuster and stay in business.

Netflix pays silly money and are in huge debt for it, but they also bring in revenue than dwarfs the like of Hulu.

 

[RAMA]

I call bullshit. There's no way Hulu or any streaming outfit could pay $30 million per blockbuster and stay in business.

Have you noticed how few blockbusters and how short most of them stay on the big streaming services? Netflix has shitty movies mostly. Amazon is the exception.

 

[PixelMagic]

They would have to drive down the production and marketing costs. Which might affect people's interest.

Yes, but if you have a smart screen writer, and resourceful production teams, you could shave large amounts of budget off of a Star Trek film. Reusing props, sets, etc. Actors and CGI are where the huge amounts of money go. I think you could still make a blockbuster Trek film for $130 mil instead of $185 mil.

That reminds me of something we haven't discussed. Yes, the budget for Beyond was $185 mil. BUT, Beyond filmed in Vancouver, and Dubai which offer tax refunds of up to 35% for filming there. So roughly, you could probably shave $40-50 million off the budget of what Paramount actually had to part with. If they really were strict about tax rebates, you may could even shave $64 mil off putting the actual cost of making the film close to $120-145 mil. Not a massive difference, but not a trivial one either.

So let's say Star Trek 4 has a "budget" of $135 mil. If they filmed in subsided locations, they would only have to pony up about $100 million, maybe a little more. That's still plenty of money to make a big movie without feeling cheap. Also leaves them room for profit since it looks like Star Trek can't be turned into a heavy hitter.

 

[Jax]

While most of us agree on this point, my guess is Paramount will only reduce it slightly at best. I think they will go the other way and bring in more or bigger partners on it.

I assume Paramount will be adding more/bigger partners for most of it's films going forward as there debt levels are huge from what I hear so they probably c? It really makes you wonder how some companies stay in business.

They also botched the release date, you really want to release your expensive summer box office movies in May/June. STB had it legs ripped away from it, when Paramount gave Turtles 2 the late May slot.

 

[BillJ]

Have you noticed how few blockbusters and how short most of them stay on the big streaming services? Netflix has shitty movies mostly. Amazon is the exception.

I would like to see a link to the information about this $30 million dollar deal from Hulu.

 

[BillJ]

So this is what I have:

$170,000,000 - Box Office
$ 30,000,000 - Streaming (Amazon, Hulu, EPIX)
$ 35,000,000 - Discs
$ 50,000,000 - Downloads
$ 40,000,000 - Tax Rebates

That totals out to $325,000,000 in total revenue, excluding the China merchandising deal. A deal I can find surprisingly little detail on.

 

[Galileo7]

ST4 will happen, I have no doubt about that.

Agree, but probably with a much smaller budget. As WOK had a much smaller budget than TMP.

 

[KGator]

Wow, some of the numbers and assumptions I have seen in this thread seem more based in fantasy than the Star Trek Universe itself! Not wanting to take the time to run the numbers (I think I did that a year ago in some post) I can buy $325 million as a fair number. Even with the inflated assumption for Discs (Studios make around 70% of sales figures rather than $100%) they high assumption on streaming and about $40 million high on your actual box office profit . . . it doesn't include other TV revenues or licenses from merchandising so when everything is factored in I could see $325 as a ballpark number. Unfortunately, that is still close to Budget costs + P&A ($330-340ish million).

The reason we know STB is still in the red or barely in the black is the Studio itself. Had this been a true moneymaker then we would have already heard numerous reports of the next in the series. The fact that we have heard nary a word means that either the Studio is having trouble finding financial backing for another film or hasn't even actively sought any such backing because they don't see it as a moneymaker in its current form. They might just wait to see the response of Star Trek Discovery and hope that a TV component will actually grow the fan base back to a point where making movies can again become profitable (CGI costs could come down, a new cheaper cast, etc).

This year has continued the trend of sequels performing worse than their predecessors. Another in the cinema series could easily come in below STB and the TV show might actually create less demand for the theatrical experience for the franchise.

There might be another movie coming but it is definitely on the backburner for now. And Paramount seems to be in a lot of turmoil so there may be a shake up in leadership before the Studio sets out its future priorities (to include their current franchises).

 

[Khan 2.0]

Wow, some of the numbers and assumptions I have seen in this thread seem more based in fantasy than the Star Trek Universe itself! Not wanting to take the time to run the numbers (I think I did that a year ago in some post) I can buy $325 million as a fair number. Even with the inflated assumption for Discs (Studios make around 70% of sales figures rather than $100%) they high assumption on streaming and about $40 million high on your actual box office profit . . . it doesn't include other TV revenues or licenses from merchandising so when everything is factored in I could see $325 as a ballpark number. Unfortunately, that is still close to Budget costs + P&A ($330-340ish million).

The reason we know STB is still in the red or barely in the black is the Studio itself. Had this been a true moneymaker then we would have already heard numerous reports of the next in the series. The fact that we have heard nary a word means that either the Studio is having trouble finding financial backing for another film or hasn't even actively sought any such backing because they don't see it as a moneymaker in its current form. They might just wait to see the response of Star Trek Discovery and hope that a TV component will actually grow the fan base back to a point where making movies can again become profitable (CGI costs could come down, a new cheaper cast, etc).

This year has continued the trend of sequels performing worse than their predecessors. Another in the cinema series could easily come in below STB and the TV show might actually create less demand for the theatrical experience for the franchise.

There might be another movie coming but it is definitely on the backburner for now. And Paramount seems to be in a lot of turmoil so there may be a shake up in leadership before the Studio sets out its future priorities (to include their current franchises).

Your logic is sound