Future of Paramount includes Star Trek tentpole

[JamesRye]

In fact, you used none of my figures and so I consider it far less accurate.

RAMA

OK, let's do this - my comments in bold - everything else is direct from you.

So we have a total cost of $400 million (the media experts reported it at $350 million, but it's closer to $400 million..The avg cost for a Hollywood blockbuster with all costs is $417 million) Cost includes what it owes to partners and other associated production costs.

So let me do a closer estimation:
*$343 million box office (revenue)
Only 50% of which goes to the studio (at best - foreign is much less) So, that is $171.5 million.
400 million minus 171.5 million = A LOSS of $225 million, which we must now try to recoup.

*$40-100 million in merchandising deal with China (I'm using the lower figure)) Speculation
$225 million minus $40 million = A LOSS of $185 million

*$15-30 million times the streaming sites: $15 million lower figure: That's at least $60 million. Netflix also signed a deal to run EPIX films but I don't know what the cost was. The total here could be as high as $80-100 million. I'm only counting $60 million.
I think this bit is fantasy land (sorry!) but anyway, lets subtract $60 million as you suggest.
$185 million minus $60 million = A LOSS of $125 million

*$15 million-Pay TV
Fantasy again, but OK. A LOSS of $110 million

*$13 million. I have no data on Network/FX Channel airing (The avg my graph tells me is $13 million for free TV alone and $14.6 million avg for Pay TV))
*Cable On Demand: No data on licensing but this generates individual, per view revenue as well. Likely amounts to $5-10 million or more.
I cannot validate these figures - guess work here again! But OK.
$110 minus $23 million = A LOSS $87 million

*$38 million USA disc sales, Not counting 4k format which I have no data on but counting the 3-film collection sales. These also have a higher "margin" than film tickets.
A genuine figure, that can be validated. NOTE: THIS ASSUMES THE STUDIO GETS 100% of DVD AND BLU RAY SALES. IN FACT, they only get 67% of that. Source: http://brobible.com/guyism/article/box-office-math-learn-how-movies-make-and-lose-money/
$87 million minus 38 million = a LOSS of $49 million

*$19 million. All reports I recently researched suggest international disc sales are 50-100% of USA sales. I'm using the lower figure. (My graph tells me the avg blockbuster makes $57 million internationally..about 2/3rds of the USA figure, but since I have no other data I'm going with the lower figure.)
Speculation (but at least an educated guess) Again, 67% of this goes to the studio
$49 million minus $19 million = a LOSS of $30 million

$40 million tax rebates-Which I did NOT count last time in order to be conservative.
$5 million USA merchandising(my graph tells me the avg blockbuster makes $11 million in merchandising) This includes, music (score+Rihanna) etc There is a thread on this very site bemoaning the lack of merchandise.
$5 million international merchandising.(estimating mostly China) Optimistic
Movie hotel and airline licensing generates an avg $2.7 million.
The avg blockbuster makes $21 million in "other" income. ??? I think much of what you quote could be construed as "other income"
All of the above is speculation with no sources. The total comes in at an incredible $74 million.
$30 million minus 74 million and we are at a GAIN of 44 million.

The 44 mill figure is BEST CASE SCENARIO and includes at least $100 million of PURE GUESSWORK.

 

[RAMA]

Where have you been? Of course it's estimation and yes most of it is educated guessing based on graphs and articles about secondary income and how movies make profit. Averages suffice for exact figures and exact figures are used when the data is found. All of them are valid revenue streams that I point out and and I'm conservative in almost all of them. The actual number if i so chose to use it was well over $604 million in revenue, any way you slice it--even you admit it's in profit, and is more likely than the offical media reports, so where is the argument?

RAMA

OK, let's do this - my comments in bold - everything else is direct from you.

So we have a total cost of $400 million (the media experts reported it at $350 million, but it's closer to $400 million..The avg cost for a Hollywood blockbuster with all costs is $417 million) Cost includes what it owes to partners and other associated production costs.

So let me do a closer estimation:
*$343 million box office (revenue)
Only 50% of which goes to the studio (at best - foreign is much less) So, that is $171.5 million.
400 million minus 171.5 million = A LOSS of $225 million, which we must now try to recoup.

*$40-100 million in merchandising deal with China (I'm using the lower figure)) Speculation
$225 million minus $40 million = A LOSS of $185 million

*$15-30 million times the streaming sites: $15 million lower figure: That's at least $60 million. Netflix also signed a deal to run EPIX films but I don't know what the cost was. The total here could be as high as $80-100 million. I'm only counting $60 million.
I think this bit is fantasy land (sorry!) but anyway, lets subtract $60 million as you suggest.
$185 million minus $60 million = A LOSS of $125 million

*$15 million-Pay TV
Fantasy again, but OK. A LOSS of $110 million

*$13 million. I have no data on Network/FX Channel airing (The avg my graph tells me is $13 million for free TV alone and $14.6 million avg for Pay TV))
*Cable On Demand: No data on licensing but this generates individual, per view revenue as well. Likely amounts to $5-10 million or more.
I cannot validate these figures - guess work here again! But OK.
$110 minus $23 million = A LOSS $87 million

*$38 million USA disc sales, Not counting 4k format which I have no data on but counting the 3-film collection sales. These also have a higher "margin" than film tickets.
A genuine figure, that can be validated. NOTE: THIS ASSUMES THE STUDIO GETS 100% of DVD AND BLU RAY SALES. IN FACT, they only get 67% of that. Source: http://brobible.com/guyism/article/box-office-math-learn-how-movies-make-and-lose-money/
$87 million minus 38 million = a LOSS of $49 million

*$19 million. All reports I recently researched suggest international disc sales are 50-100% of USA sales. I'm using the lower figure. (My graph tells me the avg blockbuster makes $57 million internationally..about 2/3rds of the USA figure, but since I have no other data I'm going with the lower figure.)
Speculation (but at least an educated guess) Again, 67% of this goes to the studio
$49 million minus $19 million = a LOSS of $30 million

$40 million tax rebates-Which I did NOT count last time in order to be conservative.
$5 million USA merchandising(my graph tells me the avg blockbuster makes $11 million in merchandising) This includes, music (score+Rihanna) etc There is a thread on this very site bemoaning the lack of merchandise.
$5 million international merchandising.(estimating mostly China) Optimistic
Movie hotel and airline licensing generates an avg $2.7 million.
The avg blockbuster makes $21 million in "other" income. ??? I think much of what you quote could be construed as "other income"
All of the above is speculation with no sources. The total comes in at an incredible $74 million.
$30 million minus 74 million and we are at a GAIN of 44 million.

The 44 mill figure is BEST CASE SCENARIO and includes at least $100 million of PURE GUESSWORK.

 

[RAMA]

Interestingly, Beyond is over $350 million in box office if you count inflation.

 

[Captain of the USS Averof]

Interestingly, Beyond is over $350 million in box office if you count inflation.

Inflation isn't a great gauge with box office figures. I tend to ignore the adjusted grosses because they are full of inaccuracies and suppositions.

 

[RAMA]

Yes, I normally do. But I just made a note of it because I know other people follow it.

 

[BillJ]

...most of it is educated guessing...

It is all guessing, nothing educated about it. Mine and yours. The only people that know the true sources of revenue and expenditures are the accounting folks at Paramount and their various financing partners.

 

[Captain of the USS Averof]

The only people that know the true sources of revenue and expenditures are the accounting folks at Paramount and their various financing partners.

You mean those people that apparently have already greenlit Terminator 6: Another Bad Judgment (Day), Top Gun 2: Admiral Maverick's Retirement and World War Zzzz but not Star Trek 4?

Why haven't they pressed on with the sequel if Beyond was such a financial success? We know Paramount is desperate for a hit movie right now so if Beyond was the success some claim Trek 4 would have been on the top of the list! But it's well over a year now without a word official or otherwise.

 

[BillJ]

You mean those people that apparently have already greenlit Terminator 6: Another Bad Judgment (Day), Top Gun 2: Admiral Maverick's Retirement and World War Zzzz but not Star Trek 4?

Why haven't they pressed on with the sequel if Beyond was such a financial success? We know Paramount is desperate for a hit movie right now so if Beyond was the success some claim Trek 4 would have been on the top of the list! But it's well over a year now without a word official or otherwise.

All I know, is that if Return of the Jedi hasn't turned a profit yet, there's no way Star Trek Beyond has.

 

[KGator]

Wrong, revenue includes all money taken in. So it's not $325 million.

BTW, I also pointed out the tax rebates and discounts myself during the post-release part of the Beyond release.

So we have a total cost of $400 million (the media experts reported it at $350 million, but it's closer to $400 million..The avg cost for a Hollywood blockbuster with all costs is $417 million) Cost includes what it owes to partners and other associated production costs.

So let me do a closer estimation:
*$343 million box office (revenue)
*$40-100 million in merchandising deal with China (I'm using the lower figure))
*$15-30 million times the streaming sites: $15 million lower figure: That's at least $60 million. Netflix also signed a deal to run EPIX films but I don't know what the cost was. The total here could be as high as $80-100 million. I'm only counting $60 million.
*$15 million-Pay TV
*$13 million. I have no data on Network/FX Channel airing (The avg my graph tells me is $13 million for free TV alone and $14.6 million avg for Pay TV))
*Cable On Demand: No data on licensing but this generates individual, per view revenue as well. Likely amounts to $5-10 million or more.
*$38 million USA disc sales, Not counting 4k format which I have no data on but counting the 3-film collection sales. These also have a higher "margin" than film tickets.
*$19 million. All reports I recently researched suggest international disc sales are 50-100% of USA sales. I'm using the lower figure. (My graph tells me the avg blockbuster makes $57 million internationally..about 2/3rds of the USA figure, but since I have no other data I'm going with the lower figure.)
$40 million tax rebates-Which I did NOT count last time in order to be conservative.
$5 million USA merchandising(my graph tells me the avg blockbuster makes $11 million in merchandising) This includes, music (score+Rihanna) etc
$5 million international merchandising.(estimating mostly China)
Movie hotel and airline licensing generates an avg $2.7 million.
The avg blockbuster makes $21 million in "other" income.

So my new, more accurate calculation tells me $604 million in revenue. Subtract either the China deal and/or rebates and it's still $520-560 million. Profit is in the $120-200 million ranges currently.

*Edited for clarity

RAMA

I don't have much time so let me just make a couple comments.

*$343 million box office (revenue)
THIS IS TICKET REVENUE, NOT EVEN CLOSE TO WHAT THE STUDIO RECEIVES. YOU NEED TO SUBTRACT THE THEATER'S CUT AND DISTRIBUTION COSTS. A GOOD ESTIMATE IS ABOUT 50% OF DOMESTIC, 40% OF FOREIGN AND 25% OF CHINA WILL ACTUALLY GO TO THE STUDIO.
*$40-100 million in merchandising deal with China (I'm using the lower figure))
GTFO! HAHA, SHOW ME THIS BECAUSE THIS WOULD BE AN EXTRAORDINARY NEW DEVELOPMENT THAT HOLLYWOOD WOULD BE GOING CRAZY ABOUT. MERCHANDISING DEAL WITH CHINA . . . FUNNY. MAYBE $4-10 MILLION. THERE ARE NO LICENSING FEES ENFORCED IN CHINA.
*$15-30 million times the streaming sites: $15 million lower figure: That's at least $60 million. Netflix also signed a deal to run EPIX films but I don't know what the cost was. The total here could be as high as $80-100 million. I'm only counting $60 million.
YOU ARE SHOOTING FOR THE MOON AREN'T YOU? DISNEY GETS $300 MILLION FOR THEIR "ENTIRE" MOVIE COLLECTION AND YOU THINK STB (A MOVIE THAT WAS A SOLID BUT UNSPECTACULAR BOX OFFICE HIT) IS GETTING MORE THAN $6-10 MILLION ALONE?
*$15 million-Pay TV
PROBABLY A LITTLE LOWER AND THIS REVENUE HAS NOT OCCURED IN THE FILM'S LIFE CYCLE. AND MOVIES ARE PAID BASED ON WHAT BENCHMARKS THEY REACH ($100 MILLION, $200 MILLION, $300 MILLION, ETC). SO STAR TREK WILL MAKE ABOUT THE SAME AS THE BOURNE MOVIE AND INDEPENDENCE DAY 2. IN OTHER WORDS, IT'S NOT GOING TO BREAK THE BANK.
*$13 million. I have no data on Network/FX Channel airing (The avg my graph tells me is $13 million for free TV alone and $14.6 million avg for Pay TV))
SAME AS ABOVE. THIS REVENUE IS EVEN FARTHER DOWN THE LINE THAN PAY TV AND DON'T USE THE AVERAGE. THAT'S LIKE SAYING ONE PLAYER SHOOTS 90% FREE THROWS AND ANOTHER SHOOTS 50% SO THE AVERAGE IS 70%. SO WE CAN EXPECT JUST ABOUT EVERY BASKETBALL PLAYER TO SHOOT 70% RIGHT? WRONG, IT IS BASED ON BOX OFFICE. THIS MOVIE WILL MAKE LESS THAN THE FIRST TWO IN TV REVENUE BECAUSE IT WAS NOT AS POPULAR.
*Cable On Demand: No data on licensing but this generates individual, per view revenue as well. Likely amounts to $5-10 million or more.
*$38 million USA disc sales, Not counting 4k format which I have no data on but counting the 3-film collection sales. These also have a higher "margin" than film tickets.
AGAIN, DO YOU THINK DVDs AND BLUERAYs ARE ALL MAGICALLY CREATED BY FAIRIES? THE TRUE PROFIT FROM THESE ITEMS IS CLOSER TO 60-70% OF THE OVERALL TOTAL. DO YOU NOT THINK THAT STORES KEEP A PERCENTAGE? THAT THERE IS NO MANUFACTURING AND DELIVERY COSTS? THIS IS BASIC ECONOMICS MY FRIEND.
*$19 million. All reports I recently researched suggest international disc sales are 50-100% of USA sales. I'm using the lower figure. (My graph tells me the avg blockbuster makes $57 million internationally..about 2/3rds of the USA figure, but since I have no other data I'm going with the lower figure.)
HOME VIDEO SALES HAVE COLLAPSED OVERSEAS DUE TO PIRACY. AND YOU HAVE ADDITIONAL DISTRIBUTION COSTS THAT YOU DON'T HAVE DOMESTICALLY. THIS FIGURE NEEDS TO BE REDUCED A LOT MORE.
$40 million tax rebates-Which I did NOT count last time in order to be conservative.
TAX REBATES ARE PROBABLY INCLUDED IN THE RELEASED BUDGET FIGURE. SO DON'T COUNT IT TWICE. IF THE MOVIE COST $185 MILLION THAT IS AFTER REBATES. STUDIOS DON'T LIKE TO SAY "YEAH WE SPENT $225 MILLION ON THIS THING AND WOW . . . DID WE OVERSPEND!". YOU ARE COUNTING THE SAME MONEY TWICE.
$5 million USA merchandising(my graph tells me the avg blockbuster makes $11 million in merchandising) This includes, music (score+Rihanna) etc
$5 million international merchandising.(estimating mostly China)
YOU ARE USING CHINA MERCHANDISING TWICE. WHICH MAKES ME THINK THE FIRST TIME YOU ARE TALKING ABOUT A FLAT FEE PAID BY CHINESE COMPANIES FOR BEING A PARTNER IN THE PRODUCTION. THIS WOULD MEAN THEY WOULD ALSO HAVE THE LOCAL BOX OFFICE RIGHTS (THEY JUST PAID FOR IT UP FRONT EXPECTING A GREATER AMOUNT ON THE BACKEND). SO YOU ARE AGAIN COUNTING MONEY TWICE.
Movie hotel and airline licensing generates an avg $2.7 million.
The avg blockbuster makes $21 million in "other" income.

So my new, more accurate calculation tells me $604 million in revenue. Subtract either the China deal and/or rebates and it's still $520-560 million. Profit is in the $120-200 million ranges currently.
YOUR FIGURES ARE EXTREMELY FLAWED. I KNOW YOU CONSIDER YOURSELF A BOX OFFICE EXPERT BUT . . . I WILL JUST SAY THAT YOU MAKE A LOT OF GUESSES AND FAR FETCHED SPECULATION IN YOUR FIGURES.

 

[BillJ]

YOUR FIGURES ARE EXTREMELY FLAWED. I KNOW YOU CONSIDER YOURSELF A BOX OFFICE EXPERT BUT . . . I WILL JUST SAY THAT YOU MAKE A LOT OF GUESSES AND FAR FETCHED SPECULATION IN YOUR FIGURES.

I guess I'll ask this question: if a movie was projected to do $120-200 million in profit, how long does it take for them to start working in earnest on a sequel?

 

[F. King Daniel]

ALL HANDS ABANDON SHIP!

REPEAT: ALL HANDS ABANDON--

*kaboom*

 

[JamesRye]

Where have you been? Of course it's estimation and yes most of it is educated guessing based on graphs and articles about secondary income and how movies make profit. Averages suffice for exact figures and exact figures are used when the data is found. All of them are valid revenue streams that I point out and and I'm conservative in almost all of them. The actual number if i so chose to use it was well over $604 million in revenue, any way you slice it--even you admit it's in profit, and is more likely than the offical media reports, so where is the argument?

RAMA

Yeah, I think we don't disagree too much. Like I and KGator said - the studios only get 65-70% of DVD and Blu-ray sales, which you haven't accounted for - and there's a lot of speculative figures bandied about - at least 100 million. So best case, the film is up $44 million, worst case, it's down $50 million or so (roughly).

At this point, I think any new movies are dependent upon Discovery being a success. It's a shame that Star Trek Beyond had no connection to the new series - this might've made it feel more 'important'. I guess they could return to making mid-budget movies with mid-budget returns, but not with such a talented cast.

 

[RAMA]

The only thing I'm 100% sure of is that it made a profit. After that it's up to the suits.

 

[BillJ]

If costs for production went as high as $225 million before rebates, Beyond will be in the red for a long time. Paramount is like the janitor after the movie Carrie, trying to clean up all the blood.

 

[JamesRye]

The only thing I'm 100% sure of is that it made a profit. After that it's up to the suits.

Not sure I'm 100% confident about anything!
Seriously, I get that you have a position on this, which is fine. But you're saying that you're 100% confident about something, when you've got incomplete facts and are relying heavily on supposition. For me, it's 50/50 whether Beyond has wiped its feet.

But then 63% of the time I'm 100% right, so maybe you are too

 

[KGator]

I guess I'll ask this question: if a movie was projected to do $120-200 million in profit, how long does it take for them to start working in earnest on a sequel?

If the movie was even PROJECTED to make that much profit by the end of the revenue stream (since studios collecting on box office from overseas distributors is notoriously slow and a major poritons of the film's revenue stream hasn't even occured yet) they would start pushing a sequel before the movie left theaters. That's an incredible profit and return on investment in Hollywood.

Of course, we all know those kinds of numbers are hogwash. Paramount wouldn't be in such a precarious financial position if they had ANY franchise bringing in that kind of revenue. It completely flies in the face of everything we know about what is going on at the Studio.

 

[KGator]

The only thing I'm 100% sure of is that it made a profit. After that it's up to the suits.

It hasn't made any profit yet. Not only are you adding "fictional" revenue streams but the modern film revenue cycle is around 3 years. We are a little more than a 3rd of the way through. It might make a profit in a few years or maybe 10 years. But even if it did the ROI would be incredibly low.

I'd also like to see some sources on this high Chinese investment (without giving up distribution rights) and amazing licensing revenue that you have commented on. It would be great if true but where are you getting this information from? The rest of your speculation seems to either be using bad or old data (film revenue streams have evolved a lot in the past 5 years) as some of your estimates seem to be from what studios could expect back in the heyday of commercial, premium Television and DVD revenue streams. Things ain't what they used to be. These days premium networks (and netflix) are buying the entire collection of a studio for a fixed amount. Its not like secondary channels like USA or Freeform are shelling out a lot of money for a Star Trek movie. That's why it will take years before it reaches those mediums.

 

[F. King Daniel]

Captain's log, stardate 45652.1. The Enterprise has entered an area of space known as the Typhon Expanse...

 

[PixelMagic]

Captain's log, stardate 45652.1. The Enterprise has entered an area of space known as the Typhon Expanse...

Are you implying this argument is going around and around much like a time loop, only to end back where we started?

 

[pst]

have we discussed the fact that orci's abandoned star trek 3 factored into the budget of star trek beyond and that contributed to its totally inflated budget? and do we think paramount takes that into consideration when determining whether star trek beyond was successful?