Summer is almost upon us yet again, which these days only means one thing: our senses are about to be bombarded with a deluge of movies featuring costumed characters, all battling it out with the fate of the very world at stake. Two of the summer’s biggest movies fall into this ever-popular genre: “Batman v Superman: Dawn of Justice” and “Captain America: Civil War.”
Comic book movies have made billions of dollars over the last few years and these two movies in particular should continue the trend, shattering box office records and turning a huge profit for studios, right?
Legendary director Steven Spielberg recently made headlines when he said that superhero movies will soon likely go “the way of the western” in that they will quickly become so expensive to make that they can’t possibly turn a profit, leading studios to abandon them entirely in favor of greener pastures. With many of the top grossing movies of all time being based on comic book characters from our youth, he can’t possibly be right, can he?
If you take a look at the math, it turns out he may not be far off.
How Box Offices Work
To understand the current superhero movie bubble, you need to learn a little bit more about how box office returns operate. When a movie makes $200 million dollars in its opening weekend, the studio doesn’t take home $200 million – that money is essentially evenly split between the studio and theaters, who need that money to do things like “keep the lights on” and “hire employees to serve you popcorn.”
Because of this, a general rule of thumb is that a movie needs to make TWICE its budget in theaters to break even from box office returns alone, not counting for things like merchandising and product placement tie-ins. So if a movie cost $100 million dollars to make, it needs to make at least $200 million in box office receipts to be profitable in any way.
Batman v Superman v Captain America v Our Wallets
According to Forbes, the total budget for “Batman v Superman: Dawn of Justice” was approximately $410 million – that’s $250 million on the movie itself and roughly another $150 million in marketing. Based on the mechanics of how the box office works, this means that the movie has to make at least $820 million in theaters to “break even” – anything after that is pure profit.
“Captain America: Civil War’s” budget has not been reported, but let’s take a closer look at the rumored budget to what Marvel Studios has been building towards for the better part of a decade: the next “Avengers” movie. The combined budgets on “Avengers: Infinity War Part I and Part II” is rumored to be one billion dollars – meaning that the movie would have to make at least two billion to break even.
According to Box Office Mojo, only three movies have ever actually done that in human history (before inflation), two of which were directed by James Cameron.
The issue with all this is that nobody wants to invest $500 million dollars in any one movie only to make $501 million dollars – they want to make as much as humanly possible. So as budgets continue to increase like this, each one is seen as a little bit less profitable than the one that came before it. As that margin of profit continues to dwindle, there does eventually come a tipping point. At some point, it’s clear that one of these movies is going to lose someone money – and it isn’t just going to be a few million dollars. It could wind up being closer to $500 million or more.
Because of this, Spielberg may not be far off – as soon as a movie that cost a billion dollars doesn’t make any type of profit, studios WILL likely start looking for other “sure-fire bets” for the next big thing. At that point, superhero fans may find themselves out in the cold.
This article was written by Leah, Content Director and writer for companies like OnlineFaxes and publications like Tech Crunch.