In one corner we’ve got a major blockbuster: Star Trek. In the other corner, we’ve got an independently produced horror movie: Paranormal Activity. Star Trek is Paramount’s highest grossing film of 2009, with a huge $257 million in the bank. Paranormal Activity, on the other hand, has earned $36 million in its first month in theaters. So which movie do you think has been the more successful performer for Paramount? Sensible logic would say that Star Trek is the obvious winner, but I’m not so sure that’s the case. Let’s crunch some numbers and figure this out…
–Domestic Gross – $257.7 million
–International Gross – $127.2 million
–Worldwide Total – $384.9 million
–Theater’s Share ≈ $50 million (Theater’s usually take about 20% of the theatrical gross)
–Production Budget – $150 million
–Advertising Budget – $75-140 million (There are conflicting reports on this. I’ve seen everything from $75 million, which seems low, to $140 million, which seems a bit high. Let’s split the difference and use $107 million as our figure.)
–International Advertising And Distribution – $75 million? (I really have no idea because I can’t find figures for this anywhere! Still, to promote and release a film all over the world seems like it must take more than $50 million, so I’ll make a guess, that is very much just a guess, of $75 million.)
–TV Distribution – $30.9 million (FX agreed to pay 12% of the domestic gross for the TV rights)
Total Negative Costs ≈ $382 millionTotal Combined Earnings – $415.8Profit ≈ $33.8 million
–Domestic Gross – $36.9 million (so far)
–International Gross – N/A
-Theater’s Share – $7 million
–Production Budget – $11,000 (But this was not paid for by Paramount. This was independently made and then bought by Dreamworks/Paramount before the big split between them.(
–Rights to Distribution – $350,000 (Source; This is what Paramount, then called Dreamworks, had to pay to be able to release this movie.)
–Advertising Budget – less than $1 million (The campaign was done online, which is very cheap compared to traditional TV/print advertising)
–TV Rights – N/A
Total Negative Costs ≈ $8 millionTotal Earnings – $37 millionProfit – $29 million (so far)
So who is our winner? Let’s hash that out. After the hundreds of millions spent on production and distribution, the sci-fi reboot of Star Trek has netted just over $33 million for Paramount. Great DVD sales are all but assured, and the movie no-doubt will benefit from merchandising, but DVDs aren’t available yet, and I have no way of knowing what sort of merchandising revenues Paramount has collected. Still, after all the money spent on Star Trek, one would think that the movie would’ve managed to make a bit more money theatrically. Frankly, I’m not surprised that it hasn’t. Studios are notorious for spending egregious amounts of money on their movies, and they receive frequent criticism for their frivolous spending. The bottom line is that Star Trek cost a ton of money, and there’s just no getting around that. Still, while the theatrical release did not find Pirates-style box office grosses, the film served much more as a platform for the future of the Star Trek franchise. The DVD will be huge. The merchandising grosses are surely valuable. And the sequel will be gigantic! Therefore, while Paramount invested a horrendously large amount in Star Trek, it looks like their gamble worked well enough and it will continue to pay off in the future.
Paramount hasn’t had to work nearly as hard, though, to earn money with Paranormal Activity. The movie was independently made for $11,000 and then Dreamworks/Paramount purchased it for $350,000. The movie was advertised solely through Eventful, and so pretty much no money was spent on advertising- the buzz just built itself! Because Paramount invested almost no money in Paranormal Activity‘s release, pretty much all of its gross is pure profit! Now the movie has earned $8 million and $20 million in the last two weekends, and it’s only going to keep expanding through Halloween, so higher grosses are surely on the way. I have no idea where Paranormal Activity will finish, and who knows if it will get an international release, but the deafening buzz and its amazing Cinderella story thus far, seem to be pointing it in the direction of at least $80-90 million. Again, Paramount has had to spend almost nothing on this movie, and so the theater’s share of the gross is really the only other factor we need to look at. If we say Paranormal finishes with about $90 million, then Paramount is looking at a $70 million profit! And that’s without DVD sales!
Now, don’t get me wrong, Star Trek is by no means a failure. The movie did well, and the franchise will continue to thrive because of it, but when you are looking at production and distribution costs of about $332 million vs. costs of pretty much nothing, it’s going to be very hard to recoup that amount of money quickly. Paranormal Activity is pure gravy, and you can mark my words, in terms of theatrical profits, this is Paramount’s biggest success in a long, long time.