welcome back to another episode of out loud geek where we discussed news and news about pop culture science fiction fantasy food cooking the outdoors and more I wanted to take a few moments to go over something that has come up in some of the responses to my videos and it has to do with how much money does a movie need to make in order to break even or be profitable some people aren't inclined to believe that once the gross ticket sales is equal to or greater than the production budget that a studio has reported for a particular film that that automatically means that the film is profitable and has broken even that is actually not the case and this article which actually came out in 2020 helps to explain that and it'll be very clear I think once people see this but I wanted to take a moment to thank everyone who has recently subscribed to the channel thank you very much for your support so how much does a movie need to break even to answer it very quickly a ballpark figure for most Blockbusters is twice or more of their initial budget so this article pretty much follows the same process that I use to estimate a film's break-even point there are generally two parts of financing a film making the movie itself and marketing it the first expense making the film includes everything from paying the cast and crew creating the set special effects and other post-production then comes the marketing which is getting people aware that the film is coming out marketing budgets vary greatly smaller films don't usually Market themselves as aggressively while films with a budget of more than around 75 million dollars commonly fall around half the amount of the film's production budget which is quite a big chunk of change sometimes this includes circulating ads and trailers working with other companies for product tie-ins and create creating events for greater visibility and awareness while many movies stick to trailers on YouTube and TV other films go the extra mile to get people's attention take Star Wars for example on top of the tie-ins with cereal boxes and Uniqlo Disney has been trying desperately to break into the lucrative Chinese market putting 500 Stormtroopers on the Great Wall of China for several of their movie launches the Studios have even poured money into frozen displays and events in malls and far away countries like Malaysia to Garner hype around the movie rental props actors in multiple locations you can imagine just how much money is poured into getting the word around it's not just about tickets sold either Studios haven't made their money back just because the box office figures on Wikipedia doubles its budget so here's an interesting thing here in order for a film to break even the total gross ticket sales that it makes needs to be much greater than what the original production budget was theaters get a cut of a film's earnings too every Studio has a varying degree of bargaining power with Cinemas they sell the film to the larger a film the more people it will likely draw to the cinemas Studios can use this bargaining power to demand a bigger cut and set the number of screenings but on average Studios normally take in 50 percent of domestic ticket earnings and 30 percent of the international ticket sales so this is something that is extremely important here to realize theaters that play a film take at least half of the gross ticket sales for themselves because they have their own employees and expenses to pay too thus Studios only get up to half of the reported gross box office ticket sales this is why the lowest possible break-even point for film is at least double the production budget and normally because of marketing and advertising it goes much higher and because internationally they don't make as much money this is why a studio needs to make more than twice the amount of the production budget in most cases oftentimes people will say that a film's break-even point will be somewhere between two to three times the production budget I generally use two and a half because it falls directly between two and three it's just the Midway point and it's an easy number to remember and it's just a rough estimate it's very hard to tell what a film's actual break-even point is because Studios don't always provide accurate information about production budgets sometimes those are just estimated numbers and Studio those never provide information on how much the marketing and advertising for a film cost so this is all a lot of guesswork but ultimately the two and a half that I use or the two to three times the production budget yeah that's pretty much the best you can hope for as far as estimating how much money a film needs to make in Gross ticket sales in order to break even say a film has a production budget of a hundred million dollars if it has only made a hundred million dollars at the box office it still needs to make at least another 100 million dollars just to get past that initial point of paying off the theaters for a film that has a 100 million dollar budget it's break even point maybe around 250 million dollars for a film with a 200 million dollar budget it's probably going to be closer to a 500 million dollar break-even point this is just how things work work because the theaters keep at least half or more of the ticket sales for themselves so I hope that clarifies things and I hope that makes it a little more understandable as to why I use a value of 2.5 times the production budget as a way to estimate where a particular film's break-even point is all it is is a rough estimate because Studios never provide very accurate financial information for films it's a guess but it's based on knowledge of how much money the theaters often keep for themselves as well as the fact that there are other costs beyond the original production budget thanks for watching today and a huge thanks to everyone who has subscribed to our Channel we appreciate your support if you enjoyed this video 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