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Analyzing Moana's Box Office Performance: Part 1 - Was it a Flop?

posted 8 years ago by troyplafond
41 replies | jump to latest

This is the first in a 3-part series analyzing the box office performance of Moana.

The first part deals with whether or not Moana is a flop. The second part deals with whether or not Moana was a disappointment. The third part deals with the bigger picture (Sing, Disney vs Illumination, etc).

Throughout these 3 posts, I will be analyzing Moana, hit on many (hopefully all) of the related subjects mentioned throughout this board, and hopefully quell the sounds of doom that many posters are making.

The decision to split this into 3 parts is to mark clear differences in ideas, and to make the overall point less of a word wall.

So without further ado, here we go!

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Was Moana a flop?

Short answer: no.

1. Flop vs Disapointment:
A flop is, by definition, a movie that does not make the studio any money, and usually loses the studio money. This is an important definition to establish, as many people use flop interchangeably with disappointmemt, which is a movie that underperforms in comparison to logical comps or prerelease expectations. This idea of flop vs disappointment will be explored further in the next post, but the basic ideas are essential for both.

2. Hollywood "Rule of Thumb":
Many situations make it difficult to properly gauge whether or not a movie is a flop or a success, especially when it is right on the line. These factors can include, but are not limited to, unspecified marketing budgets, performance in post-theatrical markets, and percentage of money reciebed from theaters. The general rule of thumb is that, if a movie makes 2x its budget, it is generally considered to have broken even.

3. Does this work?:
This 2x rule of thumb has been met with uncertainty by many, mostly due to the unspecified marketing budget. Little is known about these. Some think that these often match or exceed the production budget, others disagree. However, the reason that the rule of thumb works is that, while it doesn't account for these marketing expenditures, it also doesn't count all the money a movie can make outside of theaters. Merchandising, music sales, On Demand, licensing deals, there is tons of post-theatrical money to be made. Specifically, Moana will be going onto Netflix thanks to the Disney-Netflix deal. Due to these money-making opportunities, the rule of thumb for production budget vs box office gross tends to work.

4. Example Time!:
Let's take a look at one particular, interesting movie from this year. The Legend of Tarzan. The Legend of Tarzan made just about 360 million worldwide on a 180 million budget. This movie, while met poorly by critics, scored 3x legs in the heart of the summer, especially rare among 4th of July openers, thanks to word of mouth among audiences, and is now noticeably absent from the end-of-year flops list. No article has been posted on how poorly it performed/how much money it lost.

Disclaimer: I'm not comparing Moana to The Legend of Tarzan in any way. I'm showing an example of how a movie can double it's budget and still be considered either profitable or in the black. As you've noticed, all talk has been devoid of Moana so far.

5. Applying These Lessons to Moana:
Moana has thus far made 405 million worldwide. With South Korea and Japan, two fairly major markets, left to go, and leggy performances around the world (it made 21.3 million international last weekend), I think a final total somewhere between 500 and 525 million is very plausible. I think it can get closer to the 550-600 range, but that's not what this is about.

Moana's projected production budget is 150 million. This budget makes perfect logical sense, since Frozen and Zootopia each also was 150 million to make. 150 x 2 = 300 million. So even where Moana is right now is enough to safely say that it is likely profitable. Great word of mouth/general acclaim indicates a strong post-theatrical performance, and fairly clear profitability.

6. Comps:

In a prior thread, I listed off movies that made under 500 million on productions budgets of 150 million or higher to get sequels. I'm not going to repost the entire thing, it's fairly recent if you haven't seen it. Some highlights were Star Trek (and Star Trek: Into Darkness), Wreck It Ralph, and a good number of X-Men movies. This shows that Moana is ending in a range that is favorable for similar grossing and similar (or significantly higher) budgets.

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If there are any points in here you find contentious, sound off in the comments, I'll try to respond to everything.

Please try to keep comments away from the performance of Illumination movies such as SLOP and Sing, those will be covered in the final post.

I'll be posting my second post at a similar time tomorrow night, and my third post at either a later time Friday night or sometime before noon EST Saturday morning.

[–] L0GAN5 8 years ago

Let's consider the financials:

Moana has earned over $400 million, including $216 domestically. If it plays out like Tangled from here on in it will finish above $240 million. It is currently making more from its foreign markets than it is from its domestic market, so it is guaranteed to add another $50 million from its current markets. That would take it to $455 million at least. It has a number of markets coming up across January and February and a performance analogous to Tangled would net it a further $65 million, giving a likely lower-bound of $520 million before Japan enters the equation. In recent years Disney films have earned $30–80 million (barring Frozen) in Japan which would suggest a lower-bound worldwide gross of $550 million, and if it performs like the last couple of Disney releases then it will top $600 million.

The comparable example:

Big Hero 6 generated revenue of $279 million from $657 million box office, and a further revenue of $347 million from home entertainment and TV. That film had total costs of $439 million (of which $165 million represented the actual budget), and it made a profit of $187 million.

Applying this to Moana:

To take the worst case scenario, let's say Moana finishes with $550 million. Using the same ratio as BH6 (42%) that would return $230 million to the studio. Assuming that it makes more from its secondary markets as was the case with BH6 then it will end up with revenues of $460 million at least. Presuming it didn't cost more than $500 million it looks like Disney stands to lose $40 million at most.

On the other hand, say it finishes with $600 million (which it is odds on to do) that would return $250 million using the same ratio as BH6. If the secondary markets return revenue 25% larger than the box office (as was the case with BH6) that puts total revenue at $560 million. If Moana had similar costs to BH6 ($439 million) then Moana would clear $120 million in profit: not quite as good as BH6's $187 million, but still a fairly comfortable profit margin.

Does that sound like a flop?

[–] Syrngfsse2 8 years ago

Sounds like a huge disappointment at best and even a flop at worst. Even if this breaks even, its still a huge disappointment at the box office.

This should be doing over a billion given that musicals are the easiest sells. Dory and zootopia did that despite not being musicals.

Instead, sing killed its chances.

[–] UnvoicedApollo1 8 years ago

What are you talking about? Musicals are one of the hardest sells. It's why very few companies outside of Disney does them and why they are quite rare in movie form. By your logic, La La Land is considered a flop.

[–] troyplafond 8 years ago

I don't see how a 550 million total results in a 40 million writedown, but this is a very good write-up, thank you!

[–] troyplafond 8 years ago

Never mind, just read your post closer and I get it. It's early here.

[–] L0GAN5 8 years ago

Now Moana has passed half a billion worldwide I thought it would be interesting to re-evaluate Moana's profitability and how close it is to breaking even.

Box Office revenue
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The budget, overhead, interest and marketing for Big Hero 6 came to $336 million.

Big Hero 6 collected 42% of its revenue from its box office, so this would yield $223 million for Moana.

Going by these figures Moana's current loss stands at $113 million.

Moana will reach $550 million from its existing markets and Scandy and Japan will add at least another $50 million to the box office. This will reduce Moana's loss to at most $84 million by the end of its theatrical run.

Prediction: $84 million loss

Home Entertainment
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Home entertainment incurred costs of $63 million for Big Hero 6.

Home entertainment brought in revenue equivalent to 28% for Big hero 6, so the equivalent for Moana would bring in $168 million.

Deadline estimate that residuals and "off the tops (OTTs)" amounting to approximately 10% of home entertaiment revenue were paid out. That would come to $17 million for Moana

Prediction: $88 million profit

Pay-per-view/VoD
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For Big Hero 6, this came to 4% of the box office. For Moana this would equate to $24 million. Residuals and OTTs would come to about $2 million.

Prediction: $22 million profit

TV platforms
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For Big Hero 6 expected TV income came to around 20% of the box-office gross. This work out to about $120 million Moana, minus 10% for residuals and OTTs.

Prediction: $108 million profit

Conclusion
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Home video, PPV, VOD and TV would yield profts of $218 million, and offset from that would be a loss of $84 million from the theatrical run, for a net profit of $134 million. Offset against that was profit participation of 5% for Big Hero 6, which would lower the overall net profit to $127 million for Moana, provided it reaches $600 million at the box office.

Prediction: $127 million net profit (by contrast Big Hero 6 made $187 million net profit)

[–] QueenFanUSA 8 years ago

LOGAN5

So...even if it does eventually crawl to $600 million worldwide it'll still be $84 million in the red?

Yikes! That's even worse than I thought.

[–] L0GAN5 8 years ago

At the end of its theatrical run yes, but not longterm. Big Hero 6 was down $57 million at the end of its theatrical run too. Big Hero 6 would have needed to gross $800 million worldwide to break even theatrically and Moana probably needs to do the same. Very few films break even thetarically these days because the releasing costs are so high.

[–] Zaphenzo 8 years ago

The budget, overhead, interest and marketing for Big Hero 6 came to $336 million.

Big Hero 6 collected 42% of its revenue from its box office, so this would yield $223 million for Moana.

Going by these figures Moana's current loss stands at $113 million.

I would point out the Moana's estimated production budget (no official budget has been released by Disney) is less than Big Hero 6's budget, and I would assume the marketing was less, as well, because in my opinion, Moana was pathetically marketed. I didn't see a single TV spot for Moana outside of on Disney channels (a few on the Disney channel, and I think I saw one on Freeform) and I only saw 2 trailers for it, both before Disney movies (Civil War and Dr Strange). Unless it was more heavily marketed outside of my area, marketing would have to have cost less, as I definitely saw much more advertising when Big Hero 6 came out.

[–] QueenFanUSA 8 years ago

Many people use flop interchangeably with disappointment, which is a movie that underperforms in comparison to logical comps or prerelease expectations.

Indeed...many people do but I never have. I firmly believe that this film was a box-office disappointment, though. I am not convinced at all that this current worldwide gross is one that Disney is happy with. This was supposed to be a biggie. The sheer volume of merchandise that they put on the market shows that they were confident that this movie was going to be hot. I don't have any data but most of all the anecdotal reports about how Moana merchandise has been selling has been dire.

[–] Syrngfsse2 8 years ago

This should have done at least 1 billion. Its losing out to an awful musical named sing instead.

[–] QueenFanUSA 8 years ago

Its losing out to an awful musical named sing instead.

I know. I try not to think about it any more. Very disheartening...but also exactly what I've predicted for months to much ridicule on this board.

[–] Syrngfsse2 8 years ago

I still get angry pms for just suggesting the possibility.

[–] Zaphenzo 8 years ago

This should have done at least 1 billion.

This statement alone shows what Disney has been able to do in recent years. No one should really ever expect a movie to make a billion, bar maybe Star Wars movies. We're talking about a point that only 27 movies, ever, have reached. To further stress this point, we're talking about a point that only 5 animated movies, ever, have reached. To stress it even MORE, we are talking about a point that only 2 original animated movies, ever, have reached (the other 3 are Finding Dory, Minions, and Toy Story 3, all of which were sequels) To expect every new Disney movie to do the same is really just asking too much. Disney has spoiled us with what they've been able to do recently.

Even looking outside of just animation, of the 27 billion dollar movies, only FIVE were movies that weren't working off an established brand. Those 5 movies:
Avatar
Titanic
Frozen
Jurassic Park
Zootopia

To expect a movie to be up there with the likes of Avatar, Titanic, and Jurassic Park is ludicrous. As far as Frozen, I've been saying for months that no animated movie is going to match that for many years. And Zootopia barely crawled over 1 billion, thanks mainly to an outstanding performance in China. So, again, to expect something like that is really just ludicrous.

I could agree that if it lands under $600 million in the end that it's a disappointment. Flop, absolutely not. Disappointment, yes. But to say that it's a disappointment if it doesn't hit a billion is the most ridiculous thing ever.

[–] QueenFanUSA 8 years ago

I definitely never said it had to hit a billion but I thought if a cheap, piece of junk like SLoP could hit 867 million WW that maybe Moana should not be struggling to hit 500 million.

[–] Zaphenzo 8 years ago

jdarsch aka kyrchs aka whatever other accounts he uses is the one that said it should have hit 1 billion. I was replying to him. As far as struggling to hit 500 million, it isn't. It's at $216M domestic (PS: beyond what most of you were projecting for its final domestic) and $405M WW already and still showing very strong legs, and hasn't even opened in Japan, Brazil, or South Korea yet.

[–] L0GAN5 8 years ago

Yeah, 500 mil is a lock. The only reason it isn't there yet is because it has had a staggered roll-out.

[–] lucasdinosaur575 8 years ago

have you seen sing??? I wouldn't call it an "awful movie".

[–] troyplafond 8 years ago

I'll be a dressing the disappointment in my next post, which I will agree it is.

[–] QueenFanUSA 8 years ago

Wow...okay...we may be very much on the same page!

[–] troyplafond 8 years ago

Up now, let me know if our ideas are on a more similar wavelength than we expected.

[–] Syrngfsse2 8 years ago

The fact you have to make not one but 3 long posts trying to spin moana as a success means that moana wasnt so successful after all. Real successes explain themselves.

And the 2x rule applies to the combined marketing and production budget. Even if you assume that the total budget is 250 million, its turning a small profit at best. The total budget i estimate is 300 million. Therfore, its likely LOSING money. It may still turn a profit with home market sales but the merchandise is not selling out very well.

A real success would be sing, no matter how terrible it is. It only costs 75 million to make AND market (unlike disney, universal bundles in the production and marketing budgets). Sing is making hundreds of millions in profit.

[–] QueenFanUSA 8 years ago

The fact you have to make not one but 3 long posts trying to spin moana as a success means that moana wasnt so successful after all. Real successes explain themselves.

You hit that one out of the park, Whooaaa3.

[–] Syrngfsse2 8 years ago

Exactly. Were there any posts debating whether zootopia was a disappointment?

Op is just being desperate since he probably made a stupid bet if sing were to outgrss moana, he would be punished in some way instead of rewarded.

[–] troyplafond 8 years ago

Not every movie is an unequivocal success or flop. Movies that end right near the boundary do indeed require debate to determine whether or not it was successful or not.

Also, I didn't bet on the performance in either way, and even if I did, posting on here wouldn't help my case. All I'm doing is trying to set the record straight on here about Moana's performance.

[–] troyplafond 8 years ago

No, it means that no matter how much I try to say it in the replies, nobody listens.

Also, 2x is just production. I don't know what else to say, it just is.

[–] Zaphenzo 8 years ago

And the 2x rule applies to the combined marketing and production budget.

No it doesn't.

The total budget i estimate is 300 million.

No one cares what you estimate. You pull numbers out of your butt and treat them as fact. So your estimates count for nothing. Estimates from people who do this for a living are what count, and they call a $150M production budget, and no one has sounded off on marketing budget.

the merchandise is not selling out very well.

Any proof of that? Oh sorry. I forgot. You don't do that whole proof and fact thing.

(unlike disney, universal bundles in the production and marketing budgets)

No, they don't.

[–] Syrngfsse2 8 years ago

Also, keep in mind that moana could still break even after home media sales, but so did treasure planet and that caused a writedown because it was an undeniable flop at the box office.

The only reason why disney didnt take a writedown for moana is because rogue one easily covered those losses.

[–] troyplafond 8 years ago

This is no way comparable to Treasure Planet. Treasure Planet didn't even match it's budget in box office. I can't find anything to claim that it eventually broke even.

[–] Syrngfsse2 8 years ago

And that under 500 million list is pretty laughable.

Star trek beyond by your definition could be considered a hit despite being a disaster at the box office.

[–] troyplafond 8 years ago

Nope, it needed at least 370 million and it made 343 million.

[–] lucasdinosaur575 8 years ago

a movie hopes to get to 500 million. it NOT laughable.

[–] Hold_the_door 8 years ago

Its run is far from over, so this discussion is being made way too early.

[–] troyplafond 8 years ago

It's a little early, I agree. My argument in this post is that no matter where it ends up, it's not a flop.

Plus, I need to stop using this board because I'm getting way too annoyed at the discussion here, so these posts are just kinda like my exit.

[–] Zaphenzo 8 years ago

While it'll be sad to see you go, I understand why you would want to leave. The trolls are fierce (or troll; I'm not convinced that they're not all one person with sock accounts; most of the accounts are brand new) and the discussion has mostly descended into "nuh uh, because I say so". But you were one of the few injecting really meaningful box office discussion, and I'll miss it.

[–] !!!deleted!!! (69989714) 8 years ago

http://www.imdb.com/board/bd0000092/thread/264087054

The troll that you had to put up with is the same one known as wallfish. Here's a guide to know more about him.

[–] troyplafond 8 years ago

This does not sound like a description of the people here, most of the conversation, while often going from debate to actually argumentative, it never really reaches personal insults like it sounds like wallfish does. It could very well be this person acting differently to get responses, but I don't see the description you provided in who I'm speaking of.

[–] Hold_the_door 8 years ago

You can ignore them. I have ignored a number of "box office analysts" on this board... Isn't it weird that most of the accounts are new and they are all talking about Sing and Illumination's success?

[–] troyplafond 8 years ago

I may ignore them and just stick around for discussion of the movie itself. These are definitely my last comments on the box office though.

[–] QueenFanUSA 8 years ago

These are definitely my last comments on the box office though.

That is unfortunate as we are awaiting the crucial box-office numbers from South Korea and Japan. Why would you want to engage only 4/5ths of the way in?

[–] troyplafond 8 years ago

I'm sick of feeling like I'm yelling at a brick wall