Blockbuster movies are not always the most profitable. Sure, Toy Story 3 earned the most money in 2010 with a staggering $1.06 Billion dollars, but it wasn't the most profitable movie. Not by a long shot. In fact, you'll see that some of the smallest budget movies have the best return.
After looking at the top 50 movies of 2010 compiled by Box Office Mojo, the results are surprising.
Studios receive, on average, 55% of the total revenue produced, which means that they need to bring in double their budget just to break even.
Here is the list of the top 10 movies of 2010, except for Harry Potter and the Deathly Hallows because their production budget is unknown. The numbers are in Millions of Dollars US, and the stars next to the movie titles indicate that they are still in theaters so their numbers will go up; however, since it's already February, their numbers aren't going to go up enough to make a huge difference in these results.
Movie | Budget | Worldwide | Studio Cut | ROI |
Toy Story 3 | 200 | 1063 | 585 | 293% |
Alice in Wonderland | 200 | 1024 | 563 | 282% |
Inception | 160 | 823 | 453 | 283% |
Shrek Forever After | 165 | 749 | 412 | 250% |
Twilight Saga: Eclipse | 68 | 693 | 381 | 560% |
Iron Man 2 | 200 | 622 | 342 | 171% |
* Despicable Me | 69 | 527 | 290 | 420% |
* Tangled | 260 | 503 | 277 | 107% |
How to train your dragon | 165 | 494 | 272 | 165% |
Average | 240% |
You can see that Eclipse was the biggest winner in this group with a 560% ROI, with Despicable Me coming in second. Both of these movies had the smallest budgets of the group, while the average for the group was 2.4x return on their investment.
The next group of movies are the highlights among the next 40 biggest producers of 2010.
Movie | Budget | Worldwide | Studio Cut | ROI |
Karate Kid | 40 | 359 | 197 | 493% |
Resident Evil: Afterlife | 60 | 296 | 163 | 272% |
* Social Network | 40 | 220 | 121 | 303% |
* King's Speech | 15 | 202 | 111 | 740% |
* True Grit | 38 | 176 | 97 | 255% |
Paranormal Activity | 3 | 173 | 95 | 3167% |
Black Swan | 13 | 172 | 95 | 731% |
Jackass 3-D | 20 | 169 | 93 | 465% |
Step Up 3-D | 30 | 159 | 87 | 290% |
The Town | 37 | 144 | 79 | 214% |
Paranormal Activity, with just a 3 million dollar budget brought in an impressive 173 million. Their cut on that was 95 million or over 31x on their investment. King's Speech and Black Swan are in position 2 and 3 with only 15 million and 13 million dollar budgets respectively.
By looking at these numbers, it appears that there's a sweet spot in production budgets to maximize ROI. This is around 70 million because the return on investment drops significantly on movies spending more than this.
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