Ask HN: Went to the movies today, how the heck can they pay so many people? | Hacker News Reader

Ask HN: Went to the movies today, how the heck can they pay so many people?

20 pointsandrewstuart11 comments

Went and saw "The Penguins of Madagascar" (funny movie). There must have been hundreds of people in the credits. How is it possible to pay so many people - surely many of them receive at least tens of thousands of not hundreds of thousands of dollars for their work?

How does the economics of movie making make sense?

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I found this article that describes the economics of the movie industry:

http://entertainment.howstuffworks.com/movie-cost.htm

In a way, making movies is a bit like VCs funding tech companies: a lot of movies lose money, but the ones that turn out to be big blockbusters make up for it. The highest grossing movie of 2014 made over $300 million.[1]

And successful movies can continue to earn money for years when they're re-distributed on Netflix, TV, DVD, etc.

[1] http://www.the-numbers.com/market/2014/top-grossing-movies

Related note: I like to watch movies and often go to wikipedia to check out the budget and earnings of a movie after catching it.

As of now, http://en.wikipedia.org/wiki/Penguins_of_Madagascar says:

Budget: $132 million Box office: $312.5 million

Note, however, that the difference between box office gross revenue and production cost is not all profit. That revenue also needs to pay for the expenses of the movie theaters to show that movie.

Operating cost I can see, presumably as part of licensing or rev split (not in the industry), but shouldn't production costs be part of budget?

Yes, I'm assuming that the budget is for production costs. So revenue - production_costs - theater_costs = profits.

Movie theaters get remarkably little income from box office sales. It's why they push concessions so hard, and why you typically only see minimum wagers staffing them. The studio is effectively renting the theater the movie, and the theater has to pay for that privilege by dedicating most of the ticket sales to go back to the studio.

http://themovieblog.com/2007/economics-of-the-movie-theater-...

Do you know how they got to that number of $300 million? Is it just US figures, because the wiki page for 2014 in film shows that the top worldwide grossing film clocked over $1 billion...

It's US only. If you click on any of the titles in the table from the provided link, it shows the full breakdown. For Transformers: Age of Extinction, you get a summary that shows it was primarily international sales[1].

[1]: http://www.the-numbers.com/movie/Transformers-Age-of-Extinct...

The budgets for films like that are extensive. The wiki says it was $132 million. It also says it has grossed over $230 million.

If you put that in company terms - if you took a startup company and funded it with $132 million, and put out an extensive product, then made a list of everyone involved - including subcontractors and admin staff - it would be a surprisingly long list as well.

Remember, for an animated film it's more like an software project than a traditional movie - there are no sets and filming, but a lot of design and testing.

While we are on the topic...the movie theatre you went to make every little or no money on the ticket. All their margin is from selling you overpriced junk food - including the highest margin product of them all - popcorn. In some cases, the cardboard container the popcorn comes in costs more than the corn itself.

The Hollywood Economist 2.0: The Hidden Financial Reality Behind the Movies by Edward Jay Epstein [1] just about that

[1] http://www.amazon.com/gp/product/B004ZZP5QA/ref=as_li_tl?ie=...

Not all of those people are employed full time for that movie. They are likely to be subcontractors (either via companies or themselves) that may work on a fraction of the movie. So those salary costs are spread across multiple movies.

You don't need a costume designer or editor for the entire length of the movie, right ?

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